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real estate developer

Payback Time Podcast
 
What step does Scott Choppin discuss for success as a real estate developer?
Setting a strategy.

"So in the beginning you set a strategy. Like what product type we're going to do? Where do we want to do it? Is it apartments? Is it commercial? Is it industrial? We have to do that also. The difference is for us as a real estate developer, we get to create that new. So if you're acquiring value-add apartment assets, let's use this one, this is a common comparison between development and acquisition. You're saying, "Hey, I want to be in Chattanooga and I want to buy properties that are a hundred plus units. They have to be distressed. They're going to be this discounted on the market. Well, there's going to be a limited universe of available properties at any given time. In fact, that's a big part of doing good value-add business planning is getting off-market deals at a discount. There's a whole set of tactics and strategies around that."

 

One important aspect as a real estate developer in the real estate world that Scott speaks of is underwriting. This evaluation helps determine the risk involved in the real estate project.
 

According to Investopedia, underwriting is multi-faceted, and contains different steps such as"

"...looking at the truthfulness of an individual's application, underwriters research how risky it will be to lend to or insure that person before doing business with that individual or company. So, in essence, underwriting is the fact-checking and due diligence on the insurer or lender's part before assuming any risk."

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