Published On: Wed, Jul 8th, 2015

What is a Real Estate Developer?

Everyone has heard about “real estate developers,” but the only thing that most people really understand about real estate is that Donald Trump is involved. Real estate development is not very complicated in theory. A real estate developers role is simply someone who works to improve a piece of land or building that they own.

In actual practice, developing real estate is very complicated. There are many laws that these business people must consider before doing any work. From financial law to property law, people in the real estate businesses have to toe several lines when doing business.

What Do Real Estate Developers Do?

Many real estate developers buy up land that is not yet useful for businesses to build on and improve it. By improving it, they may make the land suitable for building or connect it to roads. After the work is done, they may reach out to building developers to get involved. A building developer may be interested in building houses, shops, or other large commercial buildings. The land will have been adapted to the needs of the building developer. While developers often facilitate building by preparing it and selling it, they should not be confused for being building developers themselves.

Developing real estate is not easy. Like all investment, there is a certain amount of risk involved. The risk grows bigger with real estate development because many of the larger companies or more experienced developers will spend millions, even billions, of dollars on one investment. Many businesses offset this massive debt with leverage. Using personal investments in business dealings is very risky but by using debt leverage many business can offset the risks involved of buying and developing land to be sold.

How Can You Become a Real Estate Developer?

There are no minimum education requirements for people who want to buy and develop real estate. Unlike real estate agents, who must be licensed and usually are required to have a degree, real estate developers are not required to be personally licensed. Many developers studied business or law at a university and graduated with a Bachelor’s degree. For example, Louis Ceruzzi’s LinkedIn profile suggests that he studied both at Georgetown and at New York University Law School.

It takes more than a good business mind to make a real estate development company work. The company needs a number of skills to make it run smoothly. The company will need someone in finance who knows who to get the funding required. They also need surveyors, researchers, accountants, clerical staff, lawyers and more skills. It is a multi-faceted environment that requires a lot of coordination with many aspects of business and law.

Unless you have access to large amounts of funding, the best way to get into real estate development is by working for a company that specializes in developing land. You should also educate yourself in both business and property law so that you can avoid any career-threatening mistakes in the field.