Guide: How to Become a Developer

[wrab]

^ Also, Lowenberg of Magellan (he's an MIT grad).

[aic4ever]

As to the background to prepare for becoming a developer, I would advise working for a contractor for maybe two or three years, so that you get an understanding of how jobs get contracted out, and how costs come together.

I can't tell you how silly some of the numbers are that some developers think they can build things for. The biggest reason I've seen for so many foreclosed/stalled projects (Staybridge), or projects that just didn't go (Mondrian), is that the developer had a ludicrously low construction budget and either ran out of money after starting, or just never got started because the original deal was predicated on a fictional construction number.

[Nowhereman1280]

Originally Posted by ChiTownCity

^ Thanks NowhereMan now that'll definitely help me out! I work much more aggressively when I get clear descriptions. I currently know a couple people personally that work in the real estate department (not sure exactly what do they do but I'll ask). I also currently own a property (not mines but my mom's and we were renovating it but started oppurtunitiesaccumulating too much debt. Currently renting out another one), so I'll have 1 property to work on when I get this ball rolling. Do you have any recommendations for schools that may be a good choice? Where did you graduate from? I would still like to head to NY for school, but now it doesn't seem like that'll be a good idea...

Good, be careful using too much debt to renovate properties. Do as much of the labor as you can by yourself on your first properties. Spend the money you save on better finishes, it will pay off.

I graduated from Loyola University Chicago. Don't go there unless you can get a lot of scholarship. I had about 2/3 scholarship and still ended up with $40k in debt. How old are you now? You should look at schools in an around Chicago simply because you will have the best networking opportunities there (business school is more about networking than learning). Look at UIC (virtually free for Illinois residents) and IIT (can be pricey). See if you can get scholarships at Loyola and DePaul, but don't got there unless you do. Another excellent alternative is to look at University of Wisconsin - Madison. The only problem is that their business program is extremely hard to get into. Same goes for University of Illinois...

Going to school in NYC will be expensive, but have slightly better networking opportunities than Chicago. Then again, Chicago is a much more affordable market to start in.

Again, the entire time you are in school you should be thinking "are you going to be a useful contact in the future" every time you meet someone. This includes professors, family friends, friends, and random people at parties. When you meet someone who impresses you, befriend them and it will pay dividends.

[aic4ever]

Originally Posted by Nowhereman1280

Good, be careful using too much debt to renovate properties. Do as much of the labor as you can by yourself on your first properties. Spend the money you save on better finishes, it will pay off.

I graduated from Loyola University Chicago. Don't go there unless you can get a lot of scholarship. I had about 2/3 scholarship and still ended up with $40k in debt. How old are you now? You should look at schools in an around Chicago simply because you will have the best networking opportunities there (business school is more about networking than learning). Look at UIC (virtually free for Illinois residents) and IIT (can be pricey). See if you can get scholarships at Loyola and DePaul, but don't got there unless you do. Another excellent alternative is to look at University of Wisconsin - Madison. The only problem is that their business program is extremely hard to get into. Same goes for University of Illinois...

Going to school in NYC will be expensive, but have slightly better networking opportunities than Chicago. Then again, Chicago is a much more affordable market to start in.

Again, the entire time you are in school you should be thinking "are you going to be a useful contact in the future" every time you meet someone. This includes professors, family friends, friends, and random people at parties. When you meet someone who impresses you, befriend them and it will pay dividends.

IIT was a great engineering background for me...got my undergrad in Architectural Engineering (basically Civil/Structural) and my masters there in Const. Mgmt...As far as CM, they are a bit lacking in practical applications of what they teach. Very strong on theory, but by the time I finished my masters, taken part time while working, I felt like I was teaching my profs more about the practical side of the business of construction than what they were teaching me. I felt this was a good thing, though. Meaning that I did the right thing by working before starting the masters program. Most of what I was taught would have been useless to me had I gone straight through and then started working as it would have been very difficult to recognize how to practically apply some of the advanced stuff being taught.

The engineering side of things was fantastic all around, but tough sledding though. I knew a LOT of pretty smart people that couldn't hack it there so if you're wavering on your work ethic, IIT is not the place for you. If you have what it takes, though, it's definitely worth the $20K+ a year it's running now. Preferably you'd get scholarships and grants to cover a bunch of that.

[ChiTownWonder]

do you have to be rich to be a developer? isnt it more about loans and financing?

[Larry King]

Originally Posted by ChiTownWonder

do you have to be rich to be a developer? isnt it more about loans and financing?

Generally yes

for a conventional bank loan you will need liquidity. Banks need to be comfortable knowing someone will step up and fund the project if it goes over budget

But there's other ways to skin a cat

you can find a rich partner and give him a piece of the backend for guaranteeing the loan

you can get a hard money loan

[Angalfaria]

Originally Posted by Larry King

Generally yes

for a conventional bank loan you will need liquidity. Banks need to be comfortable knowing someone will step up and fund the project if it goes over budget

But there's other ways to skin a cat

you can find a rich partner and give him a piece of the backend for guaranteeing the loan

you can get a hard money loan

Good suggestions for becoming a developer.
Thanks for this info.

[Angalfaria]

It helps to have money...lots and lots of money. If you don't have money, it is almost impossible to get a loan to build. Developers without money is the null set. Otherwise, join a firm like ONNI that actually develops projects. Work your way up. Or start at the bottom. Buy a unit or two, rent them out. Pyramid up. Unfortunately, now is not the time. Real estate prices look very inflated now. Wait for a pullback. It will come. Timing is everything, and so is luck.

You are on the right way. It is true that without there is nothing you can do. But I make a pyramid by joining a firm, like ONNI.
Thanks for sharing this.

[LouisVanDerWright]

Originally Posted by ChiTownWonder

do you have to be rich to be a developer? isnt it more about loans and financing?

Actually, not really. Generally they are rich, but the key to development is using other peoples money. Really what you need are rich friends who are willing to be equity investors so you can secure a construction or rehab loan.

I'm closing on two lots to build 4 flats on and sell as condos this month and not using a dime of my own money. Even better yet, I am trying to tie up three buildings with 13 units total where the current owner owns them free and clear and is contributing them to a JV so I can redevelop them. One of them is a huge 35'x125' corner lot where I hope to build six or more condos on top of retail. It's easy to get the loan when your JV owns the property cash.

[ChiTownCity]

^ Well I know I can get into UIC (I was accepted but decided not to go because of NY. and my sister works there so I might be able to get some kind of... or maybe not). I just made 19 back in October and I currently have a 2.8 gpa (should easily be a 3 point something after finals... still not trying as hard as I know I can). I know I can't get financial aid and as far as scholarships go, I doubt I would be able to land one now that I'm out of high school....

I do know a couple contractors aic4ever so I'll see if they'll let me tag along. I think I have the basis to really get started now, Thanks once again!! (too bad i won't be able to live in new york any time soon... oh well)

[siunate2324]

Chitowncity, you have finally prompted me to get an account on SSP...I've been lurking these forums daily since about 2004 when I was about 14, but never registered since I really have no pertinent info to share. For years I've learned alot about development and real estate on this website listening to the guys like SpyGuy, Bvic, Tup, etc. and I have to say thanks to every1 on Chicago's page for sharing their opinions and knowledge about developments, etc. as its helped me over the years to decide and begin reaching my goals. You guys have really helped me focus on TOD, projects' density, how to fight nimbys in a positive way, storefront retail. etc. and overall what makes a good development.

Since I was a kid I wanted to be an architect and I left high school with the intention of getting an architecture degree at Siu-c. I basically spent my first 1.5 years there as a premajor, then basically through this website I learned a developer arguably can have a much greater impact on architecture than the architect himself. (and im not artistic/tedious enough for it neway) So now Im a jr n my major is finance specializing in real estate with a double minor in management and accounting.

As I'm finishing my undergrad I'm really starting to search for networking and job opportunities like shadowing, internships, etc. I am going to probably start trying to network by volunteering with CAF (chicago arch. foundation). Then I would LOVE to get an MRED for grad school and Im just starting to learn about that program. If anybody has any info on that it'd be much appreciated. Also I'd like to begin to build my capital and rep by starting at a major development company in Chicago. I was wondering if I could get some SSP'ers opinion on what they think are some of the best and most promising development companies in/around Chicago.

I'd love to start a thread for this but being new not really sure how to do much. I'm just a college kid hoping to gain some more knowledge so I can hopefully some day have an impact on development in the greatest city in the world. Someday I hope I can listen to ur guys demands (And get rid of those DAMN surface lots, n keep as many old buildings standing as possible)

[ChiTownCity]

Originally Posted by siunate2324

Chitowncity, you have finally prompted me to get an account on SSP...I've been lurking these forums daily since about 2004 when I was about 14, but never registered since I really have no pertinent info to share. For years I've learned alot about development and real estate on this website listening to the guys like SpyGuy, Bvic, Tup, etc. and I have to say thanks to every1 on Chicago's page for sharing their opinions and knowledge about developments, etc. as its helped me over the years to decide and begin reaching my goals. You guys have really helped me focus on TOD, projects' density, how to fight nimbys in a positive way, storefront retail. etc. and overall what makes a good development.

Since I was a kid I wanted to be an architect and I left high school with the intention of getting an architecture degree at Siu-c. I basically spent my first 1.5 years there as a premajor, then basically through this website I learned a developer arguably can have a much greater impact on architecture than the architect himself. (and im not artistic/tedious enough for it neway) So now Im a jr n my major is finance specializing in real estate with a double minor in management and accounting.

As I'm finishing my undergrad I'm really starting to search for networking and job opportunities like shadowing, internships, etc. I am going to probably start trying to network by volunteering with CAF (chicago arch. foundation). Then I would LOVE to get an MRED for grad school and Im just starting to learn about that program. If anybody has any info on that it'd be much appreciated. Also I'd like to begin to build my capital and rep by starting at a major development company in Chicago. I was wondering if I could get some SSP'ers opinion on what they think are some of the best and most promising development companies in/around Chicago.

I'd love to start a thread for this but being new not really sure how to do much. I'm just a college kid hoping to gain some more knowledge so I can hopefully some day have an impact on development in the greatest city in the world. Someday I hope I can listen to ur guys demands (And get rid of those DAMN surface lots, n keep as many old buildings standing as possible)

Well I'm glad I motivated you lol

Nowhereman, would you mind if I send you a PM if i have any future questions? (and that goes to everyone else willing to help as well)...

[Nowhereman1280]

^^^ Sure, feel free to. If they are questions that aren't personal or private, you should ask them in this thread though so everyone can learn from the discussion.

Originally Posted by aic4ever

The engineering side of things was fantastic all around, but tough sledding though. I knew a LOT of pretty smart people that couldn't hack it there so if you're wavering on your work ethic, IIT is not the place for you.

If you are wavering on your work ethic than real estate development is not the place for you. Actually, the whole industry is like that. If you don't work hard, you won't make it in real estate.

[ChiTownCity]

Getting a Real Estate Broker License doesn't require a degree just being 21 years old and the 75 hours pre-license courses. A real estate broker basically sells real estate that's owned by other people correct? This is a job that doesn't need any prior experience that I can do temporarily while in school? This is similar or different to a Leasing Consultant?

I really don't want to get side-tracked.

Would: getting an Associates Degree in Business Administration 1st

Then, a Bachelors of Science degree in business financing and/or management or something secondary

And after that, Just take a few courses in Urban Design as a Minor (or would that be a whole other degree in its self?)...

Be a good route?

Since I have multiple places to live I was planning on using as much of my income as possible for the 1st 2-3 years after I graduate to get rid of my student loans. I'm estimating I would need to make atleast somewhere in the ball park of $40k a year to knock out the vast majority pending on where I decide to attend (hopefully I would be able to get a scholarship). I was thinking after I graduate I can by 1-2 lots and/or get one property to rent out to start.

[Jasoncw]

Good luck everyone! The world needs more Herb Greenwalds.

[Amanita]

I've contemplated development as a career- this is a long term thing, but I eventually would like to have my own skyscraper

Only thing is, I'm not the kind of person you think of when you think corporate or business type. I am so NOT the suit-wearing, buttoned down type. Unfortunately being (and looking the part of a non-conformist) doesn't always go down well in the business world

[hammersklavier]

I'm working on creating a startup that I can leverage into development...needless to say, I'm thinking big.

[tayser]

^ join the club. MINES BIGGER THAN YOURS

[Amanita]

So is there any place in the development world for an oddball like me? Can I play the game without having to wear suits and pretending to be something I'm not? Learning Urban studies and business is one thing, completely hiding and suppressing myself is a whole other- something I've never been able to do.

No, I'm not some wild and raging freak, but I would hate to have to never be seen at a public Pagan event or sci-fi convention again, or wear clothes I really like in public again (see my pic in the skybar thread on nightclub entrance rules) lest those be held against me.

[ChiTownCity]

^lol well I think I look pretty darn good in a suit. I don't think your attire will matter much outside of when you're presenting yourself to a potential buyer or investor...