Colm Dillon here ...
The real estate development FAQ page is very popular and over the past four years I have been asked a lot of questions on the subject and I have set out some of them and my answers below to help you understand this unique business.
And while I know a fair amount I can't know what is puzzling you and that is what this page is all about.
So ask your questions and I'll add them to my page to help others. It does not matter how simple your question is, if it is puzzling you and it only takes a few lines for me to life the veil then it is my pleasure to do that for you.
If you are new to my web site I should let you know that I have over $1.2 Billion worth of real estate development projects completed and have written three e-coursescovering "Residential Building Development" - "Commercial Building Development" and "Land Subdivision Development."
Topic: FAQ: Real Estate Development Accounting
Real Estate Development FAQ: Do you do in-person mentoring? Would you host an individual and allow them to shadow you? Spend time with you in person to see how it is done, first hand?
Answer Thank you for your real estate development question, but the answer is ‘no’ I don’t do that ‘person to person’ on the ground doing the development style of mentoring.
Frankly you would not learn much. Why? Because all the shortcuts I take can only be done by someone who has done it a lot.
To get good at any business you have to put in the hard yards of learning from the ground up. Before you start a real estate development my courses tells you to do a host of things before you even considered buying the land.
Everybody starts by buying land and from that point onwards they are on a ‘Search & Explore” expedition to find out what to “Do Next.”
Much better to learn what to do first – do all the research (not difficult and I teach you) – set up your real estate development team – and then start the development process, without the pressure of learning as you go.
If this answer is not complete and you want to say more just write to me again.
Topic: FAQ: Active Adult Retirement Community
Real Estate Development FAQ: We are a non-profit organization planning to develop Active Adult Retirement Community in the USA.
Does your book cover the content related to this subject matter?
Please advice ASAP so that we can purchase your book.
Answer The simple answer to your question is yes.
You see, essentially you are building a residential real estate development and that is what I teach. The fact that it is an Adult Retirement Community concerns the type of occupants.
From your brief to your architect, he/she will understand how to incorporate the special facilities in each living unit, such as ‘panic buttons’ when someone gets into trouble; extra wide door openings for wheel chairs or walking frames; ramps rather than steps; special toilet and shower designs.
There are many items like that that the architect will include in the design.
But from "your" point of view the e-course will teach you what your role is as a real estate developer and how you carry out that role in detail.
You will learn how all the professional people work together and how you employ them; how to do feasibility studies; how to apply for finance. Lots of matters that you need to know before you start.
The cheapest part of the whole real estate development is getting the knowledge - but get it first as ignorance is very expensive.
Topic: FAQ: Offered A Deal
Real Estate Development FAQ I have been offered by a solid company to buy some lands with great appreciation history in London, UK, and also to get involved with some profitable pre-construction deals in the USA where I live.
I am a beginner investor who's trying to become well educated about different aspects of the real estate market first and before making any investment.
I wonder if I can get advice and mentoring from you regarding the selections of great land and pre-construction investments too?
I would like to invest in land development and condo conversion and to learn about it.
Answer Land development or subdivision as we call it is a good place to start if you have not done any development before.
Conversions are something to consider down the track, as it involves a good knowledge of the construction and employing the right people to help you.
However like so many things in life subdivision can be done the right way or the other way (costly way.)
What I teach you in my course “Land Subdivision Development Made Easy” is the right way. I start you off by getting you to know about your local market for land and putting it is way that is easily understood.
I teach you how to do a feasibility study that proved that your subdivision is financially viable and has to be included in your finance application, but above all I teach you how to do it again and again the right way to make a profit with your risks minimized.
I also teach you how to put together a Development Finance Application in the format that is acceptable to a lender; in fact a finance application is included in the course; all you have to do is change a few words to reflect your own development description and numbers.
Topic: FAQ: JV Partner
Real Estate Development FAQ: Let me know how to get a joint venture partner in real estate?
Answer You question is a difficult one to answer because you see it is necessary for you to have a financially viable real estate development deal on paper in order to have something to discuss with a potential partner.
Just imagine you are about to meet a person who has money and is willing to enter into a JV. What are you going to talk about? I think he/she may be a bit disappointed if you don't have a deal to put on the table.
So by definition the first thing you have to do is put a financially viable (profitable) real estate development together.
Usually a joint venture partner is required because you do not have the financial capacity to undertake the development on your own.
So the first thing you have to do is learn how to put a development deal together, so that you have something on paper to propose to a potential partner.
So if you are new to the development business, you need to learn these skills. Next you need to be able to legal control of the land you intend to develop.
If you don’t have control of the land in your name, then your potential partner may take your ideas and do the development him/herself and leave you out.
This is all part of what you learn from me. So you see there is a great deal of knowledge to be acquired, before you even start looking for a partner.
Topic: FAQ: Want To Build 8 Homes
Real Estate Development FAQ: I just recently bought a home to rent out and now I want to buy some land and develop it in the US, where I'm located. What capital would you suggest having at this point? I've been looking at a few acres that I could build 8 homes.
Answer You’ve asked me quite a big question here without much back up information on which to build my answer; so I can only respond partly.
First of all – what is your level of experience in land development? Like everything, it is a specialized business.
Second – same question as above only put the word ‘housing’ in where land development is – two separate and distinct real estate development businesses with there own rules, cost structures and profit centers.
Third – what market research have you done to support the land subdivision idea – lot sizes – development costs – Authority Approval costs and timing – sales prices and demand.
Fourth – there are two aspects to funding and equity required. The first is your personal income – your business income and your net asset base.
Next is the project itself. Most make the mistake of just buying the land first and then deciding how to proceed from there on a ‘search & explore’ basis.
Finally you have to know how to do the work the correct way the first time. That means gaining ‘control’ of the land first and then using time to put the whole development deal together and then presenting the whole deal to a financier.
This way you get the whole project funded (not just the land) based on established costs and projected sales income. Now on that basis you will find out how much you can borrow on the most favorable terms and conditions.
It is for this reason I wrote my e-courses, the only one on the world, so that people like you could approach the real estate development work as well informed, professional and with risks minimized.
Topic: FAQ: Have Land; What Are My Options?
Real Estate Development FAQ: I own 28 acres of raw land which I found out has recently been re-zoned for Business Park only. I'm not sure how to proceed. Will your book be able to point me in the right direction?
Answer I will try to answer your question as best I can, however you did not tell me what level of property development experience you have.
There are several levels of zoning and each are directly related to the value of the property. So if you imagine a sliding scale of value going from bottom to the top, you can start at say rural land at the bottom - residential home land for houses is next up the scale; then multi density residential for apartments/condos etc.
Then we leave Residential and move up to the business category. Generally speaking and as a guide only and depending on the economic climate of the region, the lowest level would be Industrial land; then commercial land, which, subject to your Town Plan, should include Business Park; after that you have commercial office & shops; and then we get into the Central Business District of your city for the most expensive.
So on that scale, you have had a very good event happen to you – congratulations - Especially as you appear not to have had to do anything to get the land zoned yourself.
So I suggest you go and buy yourself a very good bottle of your favorite brew and take your family out to the best slap up dinner they have ever had.
Now will my e-course help you? It will if you want to know how the development business works and how you operate in it. It is the only e-course in the world that teaches you how to do real estate development successfully.
So the first thing you should ask yourself is – do I want to be a developer? If you don’t, then forget my e-course. You can either hold the land as a long term asset – it will only increase in value. That of course depends on the demand for that type of zoned land in your area.
Or you can do some work on the land, by creating a plan of subdivision and getting it approved by the local authority. You need my Land Subdivision course to go that route.
What that means is that in simple terms you could break up the 28 acres into say 26 x one acre lots – allow for roads etc. and then when the time is right you can sell individual lots as you need cash.
This also allows you to sell individual lots when the market price is at it’s best in any particular year – NICE!
Or you could do that + wait for a tenant to come along, through an agent, and you negotiate a lease with the tenant and on the strength of that you build a building for him and hold the finished building as a long term investment for your family.
There are many variations to the theme, but in the end it all about what you want and having the knowledge to do it.
Topic: FAQ: Have Land; What Are My Options?
Real Estate Development FAQ: We have begun doing RE development on a small scale (building consecutive spec homes) and are currently evaluating what it takes to put together a much larger venture of 50-100 homes, and preparing a business plan for lenders/investors.
So the timing is just right for getting all the relevant info and enhancing/building the right relationships! We'll be in touch.
Answer Thank you for writing to me and I am only to happy to assist you, as you are thinking of moving into larger residential developments.
I want you to determine one of ‘three things’ for me, before you proceed further.
1. Are you in the land subdivision business? 2. Are you in the housing business? 3. OR are you in the house and land package business?
To answer 'YES' to any one of these questions determines your future course and therefore your planning.
I am helping another student on a 40 acre site and he and his partners found my questions and the following discussions we had as helpful in focusing their minds on a single course of action as well as adding ideas that are not being implemented in his State in the US and those ideas are putting him ahead of the market and adding great value.
See if you can determine the answer to these questions having regard to your development experience. I want to appreciate that behind those three questions is the fact that the first two are “businesses” and profit centers in their own right.
Each of questions 1 & 2 require specific knowledge. It is a big mistake to assume that just because a house is built on land that that the two activities can be carried out by the same person profitably.
There are people and companies who do nothing but build houses –that’s all they do and have worked out how to make a dollar doing that – that requires great expertise.
Similarly there are people who do nothing but develop land and that also requires great expertise.
So the questions you have to answer; are you a house builder or are you a sub divider? Now to become a subdivision developer is something I can help you with, but not the other.
Topic: FAQ: Have Land; What Are My Options?
Real Estate Development FAQ: I was wondering if I need to get a California Contractors license to become a developer? I hope I can have a contractor on my staff to be able to conduct business w/o having to get a license. Your help is most appreciated.
Answer As a developer you do not need to have a License.
As a builder, you do.
A developer is really a Development Manager; a person who manages the services of other professionals to achieve his development goals.
Your job is to be good at management and coordination and have an overall plan to achieve your goals. So it is the people who you engage to carry out the specialist work for you who need to be licensed.
Topic: FAQ: How Much Money Do I Need To Develop?
Real Estate Development FAQ: Let’s say units are selling in your area for, say $200,000 each and you said to yourself that you want to find land on which you could build 4.
So your sales income is $800,000.
Now in that sale price is about 25% profit for you or $200,000 and that leaves $600,000 to buy the land and construction materials.
This is the amount you have as savings or equity in a property plus borrowings.
Find out what the lending policy is of several banks for the development of property – this is not the same as borrowing for a house, (a mortgage) so make sure you ask about development funding.
Lets say, as a first time developer the banks will lend you 70% of $600,000 or $420,000; well you must have $180,000.
But this is what I say to every one of my readers – the single most important thing you must have is ‘knowledge.’
You can’t learn on the job, so get the knowledge first – and as my e-book is the only one on the world that teaches individuals “How To” be developers, I can’t refer you to any other books or e-books.
I have developed over $1.2 Billion worth of real estate and can tell you Rob, once you have committed yourself to a development, you must maintain momentum, and that does not allow you time to learn.
Topic: FAQ: Residential Real Estate Development in Mexico?
v FAQ: Do you have any thoughts/advice on residential real estate development in Mexico?
After you have studied and thought about the contents of my course you will appreciate that local research, as I teach you to do, it will not let you get into development for SEVERAL months from the time you arrive in Mexico.
The more 'facts' you have from your real estate development research the more “risk” you control. I know this next part may sound provocative, but as you’re a finance guy, you can handle hard talking.
So here it is.
If you and I were to go head to head developing the same product in P (Location is confidential to me) who would be the more successful? That means more profitable and finished earlier.
Now you should know that is not my ego talking here; it is just that I have done the ‘study – research work’ and right now you have not. This is the difference between a Pro and anybody else.
Right now in every city in the world there is someone doing what 'you want to do.' That means that right now you have at least one competitor in the city in which you plan to develop. That must put him/her ahead of the game as far a you are concerned. How are you going to catch up.
Well my Course is a great start and then:
RESEARCH – is your by-word; and that should bring you closer to his/her current operating level in real estate development.
You MUST – MUST – MUST – not get into any business until the home work is done; and real estate development is a business. I am sure you know this already … BUT just in case you don’t I feel that I should ram the point home. My course teaches you how to go about this work in ‘detail.’
Last point – always remember you are not developing an apartment complex for "YOU" to buy – you are always developing a product for what the market wants to buy. By definition, that means that you must ‘know’ what the market wants and expects in PV in exact detail.
None of what I have just written is revolutionary or new to you; in fact it is basic, but ask me how many people in the world do it?
Now ask me how many people write to me after they have not done it and are in trouble.
This business is easy when you know what to do, so please spend time learning and thinking. You’ll find that the “action part” flows much better.
If you have other questions please go to my home page and click on FAQ and ask – that way my answers to faq help more people than just one.
Above I attempted to list some of my frequently asked Real Estate Development questions and my answers.
Below you will find the easy to fill out form where you can post your question or give us a helpful answer or personal observation to any of the FAQs listed.
I hope you will be eager to contribute as this will be a most helpful page to developers around the world.
So come on... got a real estate development FAQs you want to get answered? This is the place to do it.
Click below to see contributions from other visitors to this page...
Nothing can hold me back.
Hi Colm, Thank you for giving us an opportunity to share with you our stories on this passion that we have,I'm currently pursuing my degree in marketing …
How much does a home builder need to make on lot purchases?
When working the numbers backwards, selling a serviced development to a home builder, what % value does a builder need to have compared to market value? …
Real Estate Development Finance
Hello Colm, I have finished reading your E-book on land subdivision as this was the aspect of Real Estate Development that I had the most interest …
Real Estate Development Joint Venture
I have the land and want to develop a residential and community development, but it was refused by the Local Council. I wonder if I can get the information …
I have absolutely no experience in Real Estate, but I do love buying and selling, and seeking out a "deal". Also have had experience in building four of …
Does your course cover how you go about assessing market conditions; in relation to where and what to develop? Obviously it is supply and demand, …
Keen to learn Real Estate Development; Find the Right Material (mentor) that works for me..
Hi Colm, I am excited and keen to get into property development so for the past 2 weeks I have spent 3-4 hours a day researching different companies, …
Developing 8 Units.
I am looking to develop 8 condo units in a certain part of town. This town doesnt really have much vacant land so I will need to purchase a home knock …
Green Real Estate Development
Hi Colm, Is it worth it to build with "green" or sustainability in mind? What about paybacks? Hi Todd, The essential motivation driving Green …
I Have No Development Expierience
I have no expierience but ive read books such as Real Estate development principles and process. My questiion is: how can i start with no money? also …
Developing in Melbourne
A lot of great advice but does this apply to laws and regulations in Victoria, AUS? or even australia as a whole? Hello Spiro, What I teach you …
Commercial Course First?
Hello Mr. Dillon, I am interested in commercial real estate development much more so than residential. Could I only buy the commercial or is your residential …
securing financing for a resort/mixed use project
I am a developer in the Huntsville Alabama area, the number 1 rated city in the USA for growth and quality of life. I purchased the most beautiful …
Real Estate Land Zoning & City Regulations
Who makes sure the project is approved by the local goverments and municipalities? Is that the developers task, or does somebody on the legal team do …
Can I be a Commercial Real Estate Developer in a Short Time?
I would like to get in to Commercial Development and have recently found several land opportunities as well as a few partners for the venture. The …
Baby Steps To Real Estate Development Success
Hi Colm, I've been spending alot of time reading the information on your real estate development website. My interests are high; however, my …
Real Estate Development Finance Application
I'm very interesting in being a real estate developer. On your page you stated the lender looks at you and your development proposal. I don't have …
Real Estate Development Mezzanine Loans
Thank you for the informative website and intelligent input. Please allow me to ask a question with a different spin... I have been granted a development …
Real Estate Development & Credit Scores
Hi Colm, I have always wanted to start a business as a developer and build a few exquisite hotels but, my financial burdens have been quite the road …
Boutique Hotel Real Estate Development?
A land owner wants me to develop a 12-room boutique hotel for him. Does your course and analysis software cover this? Hello Wade, My Residential …
I'm 21; Own a House; Can I Start A Real Estate Development Career Path?
Colm, I have been extremely interested in real estate, and more specifically Real Estate Development. I am currently 21 years old and own my …
How Do You Find a Real Estate Development JV Partner Not rated yet
Hi Colm I am trying to start a real estate development company and I need to have a JV Partner to help with the funding. How do I find one and …
NSW Land Subdivision Development Project Not rated yet
Hi Colm, I have a project at (place name removed) NSW which is a 20 lots of residential land. I bought it about 5 years before but still not be able …
Am I Too Young to Start Developing Units Not rated yet
I am 21 years of age and want to know if I am too young to develop real estate on a big scale? I am talking about 200 apartment building in the northern …
More Information on Your Real Estate Development Course Not rated yet
Colm, We have several projects that we are going to undertake in the Asian markets and wonder if your courses are also relevant for real estate development …
How Do Reakl Estate Investors Earn Money. Not rated yet
Hi Colm I will invest in a residential property and buy four units of the property. How will I get the income. Hi, This page is about real estate …
Your Real Estate Development Course Differences Not rated yet
What is the difference in your residential development course and your land development course? Hi Michael, The residential course teaches you how …
Next USA Seminar or Workshop Not rated yet
When and where will you next offer your workshop in the USA? Hi Richard, I received your second email and have passed your request to be put …
How to Get Started in Resort Real Estate Development? Not rated yet
Hi, I would like to start a resort development on an island that hasn't been discovered as yet. I only have enough money to get a downpayment for …
Real Estate Development Made Easy Course Subject Distinction and Best Order to Purchase & Study Not rated yet
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Know When to fold them? Not rated yet
In this market, what would you suggest, when your loan out performs your development? The project is in the red, all equity has been lost and the …
Real Estate Development Development Question on Retail Not rated yet
I am a commercial real estate broker wanting to become a developer eventually. I am working on a few deals in the after build value of 150 million …
Mortgage Meltdown Concerns Not rated yet
I am in the residential mortgage industry in the USA and it is collapsing. 2008 does not hold much promise of reversing this meltdown and indeed looks …
How To Cover Overhead While Putting a Real Estate Development Together ? Not rated yet
We are spot builder here in Central New Jersey, meaning we purchase single lots or dividable lots in established neighborhoods. My question is with …