Tanya
Davis books

What Does a Developer Do?

If you are thinking about going into business as a real estate developer, you may wonder what they “do all day.” The definition of property developer means that he or she makes some sort of improvements to real property (like land, buildings, warehouses, etc) which increase its value. A real estate developer will usually work in one specific niche; he may choose:

Residential – single family
Residential – multi-family
Commercial offices
Industrial
Retail
Raw land

Although it is difficult to give the full scope of a real estate developer’s job in one article, here is what the phases are in general. First, the developer must perform market research to determine that it is a good idea (meaning there is money to be made) in the area with the specific idea. Next, the developer locates a particular site where he/she intends to build, and performs a feasibility analysis on it. The results of the analysis tell the developer whether to go forward with the project or drop the idea and move to another project.

Next, the developer creates the pro forma (sort of a business plan) that outlines the project. Many times this initial pro forma is called the “back of the envelope” pro forma because it is scribbled out on a scrap of paper or even a napkin. He/she also performs due diligence at this stage.

After the property is acquired, the project is formally designed and the more polished pro forma is begun. Note that the pro forma in real estate is a rather fluid document that changes throughout the process.

Various permits, permissions, and entitlements must be obtained before construction can begin. These require visits to "town hall" or other municipal offices, and may require that you take the issue before an open meeting, especially if you are asking for a change in zoning or some other requirement.

During construction, the developer will spend many hours on the site, overseeing the project or doing parts himself, hiring contractors and subcontractors, trouble shooting, etc. besides the construction itself, a developer has his own “business” to run – accounting, record keeping, sales, operations of previously built developments, marketing, leasing or selling properties, and all the usual tasks that a business owner must do. Of course, if he has hired employees to do these tasks, he will simply oversee their work rather than do the tasks himself.