Real Estate Development – The Secret You NEED to Know If You Want to Become a Property Developer

We’ve had a few people tell us that they really want to become a successful Real Estate Developer but aren’t sure if they have what it takes. So here’s some information that we thought might help…

Having our own architectural practice means we’re able to work with some of the most successful Real Estate Developers in the business and observe first hand exactly what type of mindset it takes that allows them to build property empires and accumulate massive fortunes.

Many studies have concluded that each one of us has a wealth blueprint. From our earliest moments our views towards money are conditioned by the sources around us like our parents, friends, relatives, teachers, classmates and the media. This programming ultimately influences our wealth accumulation.

We found that part of creating a ‘Developer’s Mindset’ meant that we needed to first remove any blockages that could hold us back from achieving our true potential. These blockages can be physical (a real injury), emotional (being judged or rejected), mental (not having language skills) or spiritual (taking certain teachings to their limit). Whatever its type – these blockages can be like a big rock in front of you that impede your forward progress.

The problem is – it isn’t always easy to identify these blockages. We sort help from internationally renowned Personal Development coach Paul Blackburn and during his Mental Toolbox he explained to us that it’s our money beliefs that can hold us back. Paul classifies people’s money beliefs as:

– It’s Easy: These people believe that there is never enough time to take advantage of all the opportunities they see lying around. If you can, hang around these people, their attitude may rub off!

– It’s Hard: These people grew-up hearing ‘we can’t afford it’, their catch cries include ‘money doesn’t grow on trees’. They believe money is hard to come by and even harder to keep.

– Easy Come, Easy Go: By being in ‘lucky’ situations, they find money both relatively easy to make and ridiculously easy to blow. They have a roller coaster existence, characterized by the expression ‘easy come, easy go’!

– Struggle: These people believe that it’s not OK for money to just turn up – It must be earned. They typically utter ‘another day, another dollar’!

– Always Broke: ‘Money doesn’t go as far as it used to’ these people will often say they believe wealth is immoral, wrong or shameful.

– I’m Powerless: These people feel they are powerless to earn more, complaining ‘I can’t, it’s too hard’. As their parents usually gave them too much, they never learned to make an effort themselves.

– Drama Queen: They are always broke because there is always some earth shattering money difficulty occurring.

In the first eLesson of our RED Club mentoring program we talk about how we had to change our money beliefs and reprogram ourselves so we could attract an abundance of wealth. We also talk about the mental habits as well as the amazing financial and business habits of the Rich that you should seriously consider adopting if you want to become a successful Real Estate Developer.

Many people have tried Real Estate Development in the past however not all of them have been successful. Some have failed miserably simply because they didn’t have the right mindset to begin with. This step shouldn’t be overlooked… getting our mindset right was the underlying fundamental key element to our success.

Jim Rohn, the renowned American business philosopher wrote, “The most important part of becoming a millionaire is the person that you have to become to accumulate a million dollars in the first place.” Likewise, many financial advisor’s will say, “The first million is extremely difficult to acquire, but the second million is almost inevitable.”

This is a great insight – you will need to develop a different mindset and different habits from the average person in order to become a successful Real Estate Developer. By becoming this kind of person you also become the kind of person who can then earn the second and third million. If you happen to lose all your money, you would be able to make it all back again because you have become the kind of person who can make a million. Essentially, by adopting the habits of the Rich and the mindset of successful Real Estate Developers, you can become one.

If you just sit and read this, then nothing is going to happen for you. You need to roll up your sleeves and get moving. If you want to change your situation you must take action because ahead of any other requirement is your personal motivation. Only then can the money follow!

Remember… your success lies in your mindset. It all starts with the quality of your thoughts! If you have positive thoughts, you’ll have positive results and if you have negative thoughts you’ll have negative results. You must first believe you have the ability to create successful and profitable developments before it can ever happen. Do you have a Property Developer’s Mindset?

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Real Estate Development – How Property Developers Set Solid Foundations For Success!

The perfect time to set yourself goals or rethink your goals and prepare a proper plan for your future is right NOW.

There is no better time than right NOW to remind yourself that if you want to build a successful and sustainable real estate development business then you will need to set solid foundations.

The four key areas successful real estate developers use to set solid foundations, are:

o developing the right mindset
o setting realistic goals
o preparing a proper plan
o making better use of time

Rich Mindset Secrets

We cannot stress enough the importance of creating the right mindset because having worked with many property developers, we noticed that the successful ones had a “Millionaire Mindset’ – their achievements were not sabotaged by their previous mental conditioning.

We’ve spent a lot of time researching the Rich plus the common characteristics and habits we identified that collectively formed their mindset and contributed towards their success.

As soon as we adopted some of these ourselves we were able to accelerate our learning curve and we saw a marked improvement in our own ability to make larger profits in a much shorter amount of time.

Internationally renowned Personal Development coach Paul Blackburn of Beyond Success also helped us with a lot of the emotional stuff and we made some of our biggest breakthroughs during Paul and Mary’s ‘Mental Toolbox’ 3-day workshop where we learnt how to identify and eliminate our emotional blockages to success.

Learning and implementing the mechanics of Real Estate Development may allow you some level of initial success; however newcomers who don’t alter their way of thinking and create the right mindset aren’t able to preserve when needed and a lot simply give up after their first attempt at Property Development.

Successful Goal Setting

When you set your goals you need to think of your goals as drawing a map. If you know where you are and know where you want to go, even if you do get lost, you will find your ultimate destination, namely your destiny.

In the beginning when we were setting our goals we looked at the big picture and began with the end in mind. We knew we wanted to build a sustainable property portfolio that was large enough for us to one day live off both the rental income and the increased equity.

We decided to work out step-by-step, how we were going to achieve our financial goals as well as set an appropriate timeframe and we knew that we could reach our goals much faster using Real Estate Development as our investment vehicle.

Once we had set our goals the next thing for us to do, was to prepare a proper plan. Remember, “A goal without a plan is just a wish”.

Essential Planning

Planning is recognised as one of the most essential and indispensable elements in wealth creation and critical in today’s world.

If a plan is not simple, specific and complete then it’s going to be hard for anyone to implement it. Even if your plan is all these things, a good plan is going to need someone to check it and follow up on it.

Here are a few real estate development planning tips to help you get started:

o make sure you are practical
o ensure you set solid goals, responsibilities and deadlines
o assign tasks, milestones and deadlines to people for tracking and implementation
o regularly review and keep track
o meet changing circumstances by always updating your plan
o to be sure you cover everything use planning templates and tools
o use your action plan as though it was a living guide. In our ‘Essential Planning’ guide we discuss how to plan and stay focused so goals can be achieved much faster

Time Management Mastery

One thing that made a huge impact on us achieving our goals faster was adopting the ‘Pareto Principle’ (more commonly known as the 80/20 rule).

This helped us to stay focused on the “20 percent of things that mattered” and saved us from wasting an enormous amount of time and energy on things that just weren’t necessary.

In fact, applying this principle can change your life, as it allows you to achieve 80 percent of targets in 20 percent of the time, by reminding you to focus your time, energy and resources on the 20% of the job that really matters.

If necessary, the remaining 80 percent can be outsourced, delegated, streamlined or pruned, taking up only 20 percent of your time and resources.

Therefore, if you focus your energy and time on the important 20% of activities, you will not only be ‘working smarter instead of working harder’, but, more importantly, ‘working smart on the hard things’.

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Uncommon View – Commercial Real Estate Development

This is a story I heard growing up:
When my grandfather was 10 years old he found a penny. With that penny he bought a pencil. He sharpened that pencil then sold it for two cents. He took that two cents and bought two more pencils, sharpened them and sold them for four cents. He reinvested his four cents in four more pencils, sharpened them and sold them for eight cents. Then, again, he bought eight more pencils, sharpened them and sold them for sixteen cents. This went on until my grandfather had amassed $10.24. That’s when my great Aunt Sophie died and left us her portfolio of shopping centers, office buildings and rental homes. Our family has been in the real estate business ever since.

The story isn’t true, but it taught four valuable lessons:

1) Sweat equity is a powerful tool;

2) If you reinvest your earnings, wealth can grow geometrically;

3) The BIG money is in real estate; and

4) It would be nice to have a rich Aunt Sophie.

Like most families, we didn’t have a rich Aunt Sophie, so my parents focused on lessons 1, 2 and 3. I mention this story as a backdrop. My life growing up was always about real estate.

In my article “Keys to Closing Commercial Real Estate Transactions”, I mentioned my father because he was, and is, a wiz when it comes to commercial real estate. It was through him that I came to represent commercial real estate developers.

What I didn’t mention was that my mother was active in the family real estate business as well. While my father focused on commercial land development, my mother focused on residential real estate. I should have known better than to mention one but not the other. This article could be sub-titled “Keys To Maintaining Harmony”.

What does maintaining harmony have to do with commercial real estate development? Stick with me on this, then decide.

My mother cared about “quality of life” issues. Comfortable homes. Neighborhood parks. Safe streets. Good schools. Museums and other cultural enhancements.

I remember watching my mother lay out walking paths around detention ponds in residential developments and looking through catalogs evaluating park benches and playground equipment for neighborhood parks. As a residential real estate investor, developer and broker, my mother focused on “living environments”. If families were going to live in her neighborhoods then the neighborhoods had to be “family friendly”.

As you might imagine, with my father focused on commercial development and my mother focused on residential quality of life issues, conversations around the dinner table were always interesting, and sometimes dicey.

On one side of the table, my father envisioned expansive commercial development for retail shopping centers, office buildings, restaurants, hotels, theaters, warehouse superstores, entertainment centers, nightclubs and more.

On the other side was my mother insisting upon neighborhoods with comfortable homes, safe streets, parks and other open areas, dry basements, clean air, clean water, and minimal noise and light pollution.

According to conventional wisdom – derived from public zoning board and plan commission hearings and community planning group meetings when commercial development is proposed near existing homes and neighborhoods – one might expect a clash of ideas turning into heated challenges and demands to forego development. Fortunately, our dinner table was nothing like most public hearings.

My mother and father each respected the vision of the other and understood the natural symbiotic relationship between residential and commercial development. Instead of complaining that one was trying to destroy the vision of the other, they anticipated each other’s legitimate development and environmental needs and sought reasonable accommodation when possible. Sometimes they couldn’t agree, but there was always a meaningful attempt to understand the viewpoint of the other, exchange ideas and come to a mutually respectful and workable plan.

My mother was a resourceful advocate. She made my father think about how commercial development would impact residential neighbors and plan ways to mitigate adverse consequences on families. Long before coming into their current vogue, I learned at our family dinner table the concept of “lifestyle commercial centers” and complementary residential/commercial mixed use developments.

The point for commercial developers and residential advocates is that they should each turn down the volume of their development debate and respectfully listen to what the other is saying. When the other has presented legitimate concerns or needs, those concerns and needs should be reasonably accommodated where possible. An idealistic dream? Perhaps. But I grew up watching it work.

To be sure, not all expressed concerns are legitimate and not all proposed accommodations are possible. In those cases, resolution must necessarily be left up to public plan commissions, zoning boards, and municipal trustees or aldermen to arbitrate and decide the debate. As guardians of the public welfare entrusted with promoting the best interests of the community at large, they must decide. In a fair and evenhanded political environment, your best bet for prevailing is to demonstrate that you have listened with respect and have made reasonable and conscientious efforts to promote public harmony rather than discord.

POINT: If you are a commercial real estate developer proposing a commercial development near existing residential neighborhoods, don’t pretend they don’t exist. Think about how they will be impacted and include in your development plan ways to mitigate any adverse consequences created by your development. Talk to your residential neighbors. Listen to what they have to say. They are not ALL crazy. Sometimes (often, actually) they have legitimate concerns about real problems. If you can include in your development plan a way to economically fix a problem they already have (such as flooding, blight, inadequate parking, lack of sufficient parks or playgrounds, poor traffic circulation, etc.), your chances of favorable governmental action to approve your development plan goes up.

Whether you are a commercial real estate developer or a neighborhood advocate, understand that, whether you like it or not, conditions change. Nothing stays the same. Obsolescence and blight are natural products of time. Redevelopment is coming. If not today, then someday.

Which brings me back to my point of promoting family harmony by making amends to my mother. You don’t necessarily have to read what follows. This is primarily for her.

My mother retired last year but says she still enjoys reading my newsletters and articles. Perhaps a mother’s love, but she always likes to read what I write about real estate and real estate development. She says her favorite is a poem I wrote about “real estate development” called The Great Pyramids Of Egypt Are In Disrepair. She thinks I should share it.

The poem was written in 1992. I have to admit, it never occurred to me that the poem was about “real estate development”. I can assure you, I was not consciously thinking about real estate development at the time I wrote it.

But my mother is a smart woman and I have learned my lesson. I am not going to lightly cross her again. So, in the interest of family harmony, here it is. I leave it to you to decide if it is about real estate development. If you don’t think so, please don’t tell my mother.

THE GREAT PYRAMIDS OF EGYPT ARE IN DISREPAIR

We looked deep into each other’s eyes and said:
“Our Love will last forever”.

When I was two my parents built a new house
next door to the one we rented from my grandfather.
It was “ultra modern” with all the latest conveniences
A garbage disposer – dishwasher – central air –
central vac – wall-to-wall carpet – a private den –
We had a bird bath – and two hundred newly planted Scottish pines.

It’s a parking lot now –
The church next door needed it.
Business was good.

The church doors were padlocked last year.
God moved down the street to nicer quarters.

I saw a news clip recently.
The Great Pyramids of Egypt are in disrepair.
They may not last unless work starts soon.
Sometimes the damage can be too great.
Even mummies get so wrapped up in what
they are doing they can begin to unravel.

Yesterday a friend asked: “Whatever happened to that girl?”

The POINT (according to my mother):

Change happens.
What seems new and permanent today
Will be gone tomorrow.

No time stands still.
Real Estate projects are no exception.
Redevelopment is coming.

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Real Estate Development Financing Creates Critical Situation For Developers

The real estate development industry has created a negative impact on today’s economy. Throughout the United States real estate developers are experiencing many concerns with their development projects. These concerns are mostly related to the lack of financing available and lenders unwillingness to extend or restructure current obligations. Whether you are a residential developer, homebuilder, commercial developer, or any other related real estate development professional without the proper financing terms and structure the projects will remain stagnant or be sold.

The news has hit Wall Street and Main Street that real estate developers and homebuilders require financing, restructuring, and more time to manage through this cycle. Lenders, investors, and other financial institutions have scaled back their lending programs to developers and builders due to the risk associated with real estate development. Many real estate developers rely on financial leverage to make their respective projects successful. In today’s economy the term “leverage” has been a word many people feel has created this current crisis.

The impact has created partially built stagnant projects filled with graffiti, damages, and hazards facing the immediate communities. The citizens of these communities are demanding that police patrol the projects, fire departments monitor access to water, and local municipalities ensure that the integrity of the community. The cities are also being negatively hurt because they relied upon projections of tax revenue created by these real estate development projects.

The real estate development industry has developed alternative contingency plans to adapt to the current real estate environment. Some of the most successful alternative strategies include; raising equity, developing joint venture partnerships, negotiating with their current lenders, and to secure additional debt. Real estate developers that can raise equity can reduce their leverage position and can satisfy lenders needs for paying interest or paying down principal. Real estate developers in turn give up equity into the project. Joint venture partnerships entail teaming up with other real estate development partners or investors to provide additional equity or relationships that create value for the project. Negotiating with lenders has also proven to be successful; however, many lenders are having a tough time with how they restructure the loans. Finally, securing additional debt to either refinance the entire project or pay down the existing debt and hold funds for interest carrying costs has been a strategy for real estate developers.

There are other issues and concerns facing real estate developers besides financing such as finding homeowners, builders to develop projects, and end tenants to occupy the projects. The residential mortgage industry has been experiencing an enormous increase in bankruptcy filings, foreclosures, and lack of funding available to create mortgages to buyers of new homes. The government has been creating programs and ideas to help keep homeowners in their homes and to also stimulate new buyers to the market.

The retail sector of commercial real estate has seen retailers scale back their operations in terms of growth and expansion. The retailers are also struggling to secure financing for tenant improvements for their locations. One of the most troubling concerns for retailers has been the lack of consumer spending. Office tenants have also had to scale back their operations, reduce staffing needs, and cut expenses as much as possible. Office tenants are also experiencing opportunities to move into more desirable locations at more affordable prices causing vacancies in many submarkets.

The recent economic indicators and stock market trends are showing some signs of strength in the economy while others believe that the economy is still due for a slow recovery. As the credit markets start to thaw out and lend to real estate developers the projects will start to get back on track and create momentum. There will be many learning experiences real estate developers will take away from this current real estate market and hopefully will not repeat in the future.

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