archBoston Group, LLC

BostonUrbEx

BostonUrbEx

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Alright, so all of us here are going to put together a real estate development firm. And before you say, "no"... it's too late, you're already an employee.

But in all seriousness, though... who IS interested in something like that? And how does one enter the business? Is there any kind of formal education best suited to the field?

This is what I imagine the actual real estate development firm process is: we scout for un[der]developed properties, research restrictions and zoning for properties were interested in, try to visualize the properties' maximum potential, sign deals to execute a purchase should we decide to follow through, convince some investors we've got a solid project, execute purchase agreement, hire firms for design and secure permitting, and finally hire contractor for construction. You'd probably have to start off with some smaller multi-families in the inner burbs and work your way to larger projects, I imagine.

Am I oversimplifying this? Is there something I'm missing? Is it possible to just jump in to this particular industry, or do you have to start off by doing something else (ie: purchasing and managing prexisting construction)? I understand it probably takes alot of dedication and convincing people to take part in many different deals just for one project, but I think the end results are just something I couldn't be happier to bring to reality. To be honest, I wouldn't even mind reducing profit margins just to take pride in the final product and ensure others can maximize their use and appreciation of the development.

I guess I just really don't know where to even start, and I'm also wondering if anyone else is interested. I'm young, my fiancee and I don't have kids yet - now seems the best possible time to orient myself properly.
 
You don't need any formal education, but you do need a track record to attract capital. I think people generally get into the flipping business with their own personal money or money borrowed from family. I even think it is considerably more difficult to get a mortgage from a bank on an income property than a home you mean to occupy if you've never been a landlord before. Once you get your feet wet, you use cash flow from your successes to bankroll your next project. Once you are an established company with a portfolio of properties you own, you can attract credit much more easily. Even if you don't mean to own anything, just renovated and flip large(r) buildings, you'll almost certainly need to self-finance or get an angel for the first job or 2.
 
fattony said:
You don't need any formal education, but you do need a track record to attract capital. I think people generally get into the flipping business with their own personal money or money borrowed from family. I even think it is considerably more difficult to get a mortgage from a bank on an income property than a home you mean to occupy if you've never been a landlord before. Once you get your feet wet, you use cash flow from your successes to bankroll your next project. Once you are an established company with a portfolio of properties you own, you can attract credit much more easily. Even if you don't mean to own anything, just renovated and flip large(r) buildings, you'll almost certainly need to self-finance or get an angel for the first job or 2.
Click to expand...

+1---This guy gets it.
 
This is a really intriguing idea. I have also heard of people using crowd sourcing for smaller projects that are just renovations. They usually buy the building using the normal financing process and then help get money using an online donation site that they advertise to people in the community.
 
This is something I've been trying to break into. I'm interested in redevelopment of historic properties and contextual infill. Like fattony touched on, you need a sympathetic investor, a ton of startup capitol, or really awesome dumb luck.

I recently put together a feasibility report regarding doing this in Allston. Here is a draft I put together. I'm not going to share the actual numbers, but the text itself sort of shows the beginnings of the process. Unfortunately google drive converted the pdf to 8 bit color, so it looks like crap. I'm really lucky in that I have a contact/mentor who does this for a living, and has been invaluable in understanding how the process works, as well as editing/providing invaluable feedback on my ideas.

Now, if anyone reading this forum is in the field or has a treasure chest, get in touch with me.
 
Nice stuff dave. I assume you've been in contact with Irwin Young or someone in his company?
 
Matthew said:
Nice stuff dave. I assume you've been in contact with Irwin Young or someone in his company?
Click to expand...

Not yet, I'm still honing the study. I have been in Allston Hall however, thanks to chatting up a few guys that work in there.
 
I'll read your actual idea later but to start a business it's nothing more than paying $500 to incorporate (which is more than in many states). You can register with the city for a "dba" for $60 or so, so that no one else can steal your name, but that's about all you need.

Oh, and some pencils and a pencil sharpener. And, maybe a hundred business cards.
 
Wow, this is the easiest job I ever got! Didn't even know I was a candidate.
 
So, it seems the best way to approach something like this is to enter the market through property management. Primarily by taking rundown, distressed properties which aren't meeting their potential as-built, putting in some elbow grease, and renting the property out. Acquire capital, and then either redevelop already acquired properties which were renovated, or develop vacant plots.

How difficult is renovating distressed properties, though? I mean, seems like you could very, very easily pay more than will be worth what you make back. For example, if the kitchen and bathrooms are old and decrepit and you nearly gut the thing to make it half decent. And do things like first-time home buyer loans apply to things like triple deckers or a home you do not intend to live in?

underground said:
Wow, this is the easiest job I ever got! Didn't even know I was a candidate.
Click to expand...

We looked at your credentials and we knew we just had to have you on the team. Welcome aboard.
 
certainly an interesting idea, and something I'm hoping to get into. My theory was I'd start by buying a 2 or 3 family, live in 1 and rent out the other two. Hopefully make enough in rent to cover the mortgage, and save up for the next property, then buy, save, repeat. I'm in my mid twenties, and with rent & student loans I just have no idea how to save up enough money for that first down payment.
 
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$560 bucks eh? I'll kick in $20.

I'm all vision though. The above interests the hell out of me, but the first steps are the most difficult to grasp.

How to get the ears of the right people? How to convince someone you have the right idea, and to invest in said idea?

Of course most of my ideas are centered in my own city where property can be had for cheap, but getting investors and anyone else to believe in those ideas is tough. As opposed to Boston, where properties are ridiculously expensive to buy and develop, but they are going like gangbusters.
 
Anyone ever watch Flipping Boston? Might be good for getting some ideas.
 
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