WHAT ARE THE REAL ESTATE PLANNING MISTAKES THAT A DEVELOPER SHOULD AVOID?
Being a successful real estate developer requires far more than buying real estate, hiring a contractor, and supervising the construction process.
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WHAT ARE THE REAL ESTATE PLANNING MISTAKES THAT A DEVELOPER SHOULD AVOID?
There are a lot of mistakes in a real estate, which a Realtor made as a beginner in this venture. Being a successful real estate developer requires far more than buying real estate, hiring a contractor, and supervising the construction process. If you don’t spend some time learning how to become a real estate developer the right way.
You don’t need a degree to become a real estate developer. What you do need is: Applied working knowledge (you should get some experience through working with either a real estate development company or other real estate developers), Business savvy, Proper financial management skills, A network of real estate professionals and lenders. I will list few of that, so as to regard of developer not making same mistakes.
Not Putting the Proper Business Framework in Place for Success As A Real Estate Developer
Before you start your first real estate development project, talk with a lawyer and tax accountant to ensure you have the right business structure that works for you. The right business structure, such as a limited liability company, provides you with some protection against lawsuits or claims being filed directly against you. It also allows you to access tax benefits. You will also need bookkeeping or accounting services so that you keep proper financial records. This will become important when you need to file taxes, open bank accounts, and access commercial loans. Proper financial records will also help you build trust with potential investors. It’s also good to have a real estate developer business plan. You aren’t arbitrarily becoming a real estate developer just to work on some random real estate projects and call it a day.
Trying To Cut Down The Costs Of The Real Estate Development Project By Not Hiring Experts
Success in real estate development requires the right team. Consult and hire experts to help plan, design, finance, and execute the project in the right way and according to your business strategy.
You can’t do everything on your own. Some of the experts you should consider include:
Real estate analysts
Construction cost estimators
Project managers
Design engineers
Architects
Land surveyors
Soils Engineers
Real estate sales agents
Project managers
Mortgage
Brokers
Lawyers
They should help you make educated projections based on an assessment of the calculated risks about the feasibility and profitability of the project. These projections include preparing a project budget that includes the cost of the design, construction, and approvals fees, financing, legal and sales.
Not Exercising Due Diligence Before Buying the Property
Don’t jump into a deal without doing some critical checks on the property you plan to buy. Engage an experienced lawyer, real estate development advisor, or building contractor will be able to help you at this stage. The real estate lawyer would do a title search on the property to determine whether there are any legal or physical restrictions on the property. If you’re buying single family lots, you would also be competing with potential homeowners. So, you should ensure that necessary checks are made to avoid problem in the future.
NB: This article is not a legal advice, and under no circumstance should you take it as such. All information provided are for general purpose only. For information, please contact chamanlawfirm@gmail.com
WRITTEN BY: CHAMAN LAW FIRM TEAM
E-MAIL: chamanlawfirm@gmail.com
Tel: 08065553671, 08024230080