Entering the world of real estate development can be both exciting and daunting. The promise of creating something tangible from the ground up—whether it’s homes, commercial spaces, or entire communities—can be incredibly rewarding. But like any significant venture, it comes with its challenges. Reflecting on my own journey into real estate development, there are key lessons I wish I had known before I started. Here are the five things that would have made my path smoother and more efficient.
1. The Importance of Networking: It’s All About Relationships
When I first got into real estate development, I was under the impression that success relied mostly on having the right capital and a solid business plan. While those factors are essential, I quickly realized that relationships are equally, if not more, important. In this industry, your network can make or break your progress.
Developers must build and maintain strong relationships with everyone involved in a project—architects, contractors, city officials, investors, and even other developers. It’s not just about what you know, but who you know and how you leverage those connections. Having a trusted network can fast-track the approval process, open doors to off-market opportunities, and help you secure financing for new projects. In hindsight, I would have focused on building these relationships earlier in my career, attending more industry events, and seeking out mentors who could offer guidance and introductions to key players.
2. Due Diligence Is Non-Negotiable
Another hard-earned lesson is the critical importance of thorough due diligence. When you’re eager to get a project off the ground, it’s easy to overlook minor details, but in real estate development, even the smallest oversight can have massive consequences. Whether it’s acquiring land, securing permits, or estimating construction costs, every step of the process demands careful evaluation.
I wish I had known how much time and effort goes into zoning research, environmental assessments, land surveys, and title searches before acquiring a property. These are not optional tasks; they are essential for avoiding costly mistakes down the line. I’ve learned that rushing through due diligence to save time often ends up costing far more in delays, legal fees, and rework. In real estate development, patience pays off, and being meticulous upfront can save you from significant headaches later.
3. The Learning Curve is Steeper Than You Think
I came into real estate development thinking that my background in real estate investing would give me a significant advantage. While some skills overlap, development is a completely different ballgame. The complexities of the construction process, project management, and navigating bureaucratic red tape caught me off guard.
One of the biggest learning curves was understanding the intricate web of local regulations and building codes. Every city or town has its own set of rules, and understanding how to navigate them can be overwhelming. Whether you’re dealing with environmental restrictions, fire safety standards, or community opposition, you need to be well-versed in the specifics of where you’re building. I wish I had taken the time to study local policies more in-depth before diving into my first project. The more knowledge you have on local regulations and the development approval process, the smoother your projects will run.
4. Expect (and Budget for) the Unexpected
One of the harshest realities in real estate development is that projects rarely go as planned. Whether it’s delays due to weather, supply chain disruptions, labor shortages, or unforeseen site conditions, there are countless factors that can throw off your schedule and budget. When I started, I underestimated how much flexibility—and extra capital—you need to handle these curveballs.
The best advice I can give to someone entering real estate development is to overestimate costs and timeframes. Having a contingency plan (and budget) is crucial. If your project runs into unexpected hurdles, you’ll need extra funds to keep things moving. An underestimated budget or timeline can derail an entire project, leaving you scrambling for solutions and damaging your reputation with investors or stakeholders. If I had known this earlier, I would have padded my budgets with at least a 10-15% contingency from the start, giving me more breathing room for the inevitable challenges.
5. It’s a Long-Term Game
When I started out in real estate development, I was eager for quick wins. I envisioned completing projects rapidly, flipping properties for a profit, and moving on to the next one. The truth is, real estate development is more of a marathon than a sprint.
Projects can take years from concept to completion, especially when factoring in land acquisition, planning, approvals, and construction. Patience and persistence are key. You may spend months or even years on preliminary work before construction even begins. Learning to embrace the process and understand that real estate development is a long-term investment would have saved me a lot of frustration.
Moreover, success in development isn’t just about completing a single project; it’s about building a reputation for quality and reliability over time. Repeat business and referrals are where you truly see the rewards, and that only comes from consistently delivering on promises. If you’re looking to get into development for quick money, this might not be the right path for you. Real estate development requires vision, long-term planning, and a commitment to seeing projects through to the end.
