How to Manage Your Project: Real Estate Development
Managing your commercial real estate project involves being organized and staying on top of all the moving parts that are common with a project of this magnitude.
First, you’ll have to decide what kind of real estate you’re going to develop. The common types of real estate involve office buildings, office parks, warehouse buildings or retail stores. Before you start your building process, you’ll need to understand the industry you’ll be catering to, so you can make good choices for that industry.
The second step is to craft a careful plan of what you’d like to accomplish. This is the plan that will help you get financing. You might decide to go to a bank, find an investor or find a partner. Whichever choice you make, they will need to see your business plan to know whether they’d like to invest their money with you.
After receiving your capital, you can find a location. The property has to be zoned for commercial development. You can check with the zoning division in the city you choose. Whether you buy a piece of land or a structure that already exists, that’s up to you.
Once you’ve purchased the property, decide what you’ll need for permits. The contractor you choose can help with these details. Talk to an architect about the structure you’d like to build. If you’re building on an empty lot, you have the freedom to develop how you’d like. If there’s a building there, you might have to demolish it, or it may have a good structure that won’t require a complete rebuild.
You’ll need a contractor to work on the building. You can hire a company with their own workers, or you can hire a lead, general contract who will hire subcontractors to work for you. The choice you make matters less than how they report to you. To keep current with progress, you’ll want weekly or monthly reports.
When you have others working for you, make sure you are overseeing their work. If there are problems, you want to be aware of them as soon as possible. You can’t rely on someone else to run your business. You should plan weekly trips to the construction site to see the progress for yourself.
Once the construction is complete, you can hire a realtor to bring in tenants for your property, or you can sell it outright to a buyer. If you decide to keep it, you’ll have tenants. You’ll need to decide whether you want to hire a property management firm to handle the maintenance requests and billing for tenants.
After you have tenants or a buyer, you’re free to start on your next project.
Roman Temkin is a real estate developer from NYC.