One more thing:

A Developer assembles a team of contractors, architects, engineers, and promotors (or whatever the correct term would be).

The developer and architect design the building for the land parcel that he already owns or plans on attaing.

The engineer and architect(s) create the blueprints for the building that has a .02% margin for errors.

Contractor teams up with contractors for plumbers, carpenters, electricians, brick layers, and steel workers. They review the architect and engineer's design layout and survey the land parcel and estimate a total cost for the project and add an 15-20% to the estimate for a surplus and for labor costs. Then they bid on a city contract for construction permits and whatever they need.

The Developer meets with the HUD department or wherever he would need to go to, to show them the entire design blueprints, and rendering. The committee will give approval if projects meets all the zoning codes or will send it through the approval process if a change in the zoning code is needed.

The Developer and contractor meets with a bank and gives estimated cost for project, total plans including blueprints, and rendering. The bank reviews the project and allows the developer to apply for an FHA and a 203k loan.

contractor assembles construction team and they go to work as soon as the first check is granted.







Is this basically how the process goes? What am I missing?

Just patiently waiting.....................................

Majoring in architecture would only be good if you are interested in being an architect, if you are not extremely interested in that, then you will get burnt out very quickly on it.

Honestly the best thing you could do is look into different business schools and see what they each have to offer, then from there it is all about getting experience and capital to work with.

Often times architects and small developers will purchase something off on a risk and max out credit cards and take out personal loans to try and make something happen. It is always a small project, a 4-8 unit apartment or condo building, a small retail building with flex office space. Things like that, usually in areas that are outside of the more popular areas. Do It Yourself is also another important factor in keeping initial startup costs low, and giving yourself reachable expectations.

Understanding business and business law is going to be what helps when it comes to running a company. But the major key ingredient is always going to be "balls," cause it takes big balls to make that first step that could easily bankrupt you if it fails.

Also it wouldn't hurt to do research on a random number of developers to see how they each got their start, you can learn a lot from things like that.

ChiTown, your outline above is pretty much correct, though a 203 (k) loan is only available to first time home buyers who want to purchase a property and renovate it for themselves. Most developers leverage other properties they already own, use hard money loans, or use a personal guarantee to get a start on their careers.

I was able to use an FHA loan to get a start on what I'm doing because I haven't bought a home before and could get slightly lower interest rates with an FHA loan since the government assumes the risk.

A project manager generally takes on single projects and is often employed by a contractor or a developer to manage individual projects. The role is, however, very similar to what a developer does and many developers get their starts managing projects for other developers. I occasionally act as a project manager at my day job which has helped me build skills and contacts necessary to accomplish larger projects than those I am working on now.

There are developers that do commercial, residential, and even industrial projects all at the same time, however they tend to be extremely large developers. Most developers pick one niche and stick to it so as they get extremely good at that specific market.

PS: I really need to get around to posting picks of my current project. It's a three flat (frame, not brick unfortunately) that I've been rehabbing and I've already got two of the floors finished and rented out, more than covering my costs, the third floor (which needs a lot more work) will be gravy at this point. I think I'll be holding on to this property because I've got a long term loan at 4.8% and have $1,100 a month in expenses and will be getting about $1,800 in revenue.

That's the way to do it, definitely something I am eventually planning on doing further down the line after I go back for grad school and get some good work experience in architecture (which is what I have finished in undergrad so far.) I don't really have a huge interest in doing any large projects, mostly little infill things like what you have done, especially if it works itself as being something comfortable to live off of.

^^^ Yeah, I aspire to larger projects in the future, but really I'd just like to get to the point where I can make a living constructing modernist infill projects around Chicago's neighborhoods since no one else seems to have the balls to invest in quality architecture these day.

^Okay thanks for the responses.

So I'll hopefully be able to get some good connections over the summer then go to school at one of the CUNY locations for my business degree in Finance and Management. Hopefully I'll have a part time job that I can save up every penny from. And when I graduate I'll come home, renovate a property (or two) and use that money to help get rid of loans (I don't like debt) in a few years. Then I'll eventually be able to start a couple of infill projects.

Basically I want to do infill projects in the commercial and residential sectors. I really want to bring the artistic value back into architecture so badly because all of this cheap garbage current developers/architects have been spitting lately is just killing me. Maybe if everything runs smoothly, I'll be able to build apartments over 60 ft. by the end of this decade. Most of my projects would be on the South and West sides where they need development the most.

I'm hoping that my marketing strategy will actually work when I get the ball rolling....

^^^ There ya go, that's really what you have to do. Go learn the basics, get a job and save up money, then take a risk and work your ass off to make it big. I'm still in the "work your ass off" phase myself lol.

^You should really get around to posting those pics. I'm interested in seeing your work.

Any of you guys watch Flip this House? Or any other similar shows that document what it's like to be a small time renovator/developer?

I really agree with your opinion. The architecture education isn´t key for this kind of business. You have to offer rich business skills, perspective contacts and huge input capital to the business.

^^^ As my father always says, no matter what field you work in, your field is business...

I will soon. I want to post the pictures of my attic level that I just gut rehabbed. I spent the entire summer on it and did the entire thing by myself with the sole exception of charging the new AC units which I was about to buy the equipment to do.

The shocking part about this is that it actually looks really damn good...

^I can't wait for my first 'official' project like that. I'm just hoping this house will still be in good condition by that time (which I doubt)......

I do have one more question. After I graduate what kind of jobs should I be applying for? and While I'm in school right now what kind of jobs should I be trying to work at (that are entry level minimum to no experience required)? I know during my senior year it is really important to try and get an internship at firm but what about before then...

Kind of off topic, but I thought I'd throw the question in here anyways.

I'm currently studying Chemical Engineering in Canada. I'm kind of in conflict because I love chemistry, but I love buildings, structures, urbanity, skyscrapers etc.

Is there any way a Chemical Engineer could get a job in any kind of urban/skyscraper related field?

Well it's never too early to start working. Experience is key in any field, but especially in RE. You want to get out there and start learning and making contacts.

Apply for jobs anywhere in real estate because they are still hard to find. I'm partial to jobs in RE law (become an atty's assistant or something) because they give you a solid grounding in the mechanics of real estate law and how transactions work. They are also in relatively high supply. Call developers, real estate investors, anyone who is working in real estate and offer to be their assistant, work for free if you have to.

It's not off topic at all. Sure, you could definitely get into the field. In fact, most people working in real estate don't have a degree specializing in it. Engineering is actually pretty transferable to the world of finance and therefore real estate because it means you have a good grasp on numbers and analytical skills.

From everyone who I have talked to it seems like the business route is the way to go. This is why I chose to go down the finance w/ a minor in accounting road. The overall skills learned in these classes hopefully will provide enough value to help me get that first job. However, I dont believe it is enough to get directly into real estate dev. which is why I reaaaally wanna to attend grad school specializing in real estate.

So does anybody have any ideas/opinions on real estate development grad programs, I know that the MRED is more project related and I could also continue down the finance path and work on the financing of projects (kinda boring to us). Been recommended UW-Madison highly too.

Finally, I hope with this recent trend in Chicago projects is good timing and maybe I can swing a summer internship on a development to help me get field experience needed for grad school. I've talked to a couple bigger developers and they also told me, surprisingly, that being a broker for a couple years is a great to start, make contacts, learn your trait and selling abilities, etc.

Feedback would be greatly appreciated, especially in regards to grad programs as I am senior looking to graduate in May I beginning to search much more intensely.

Yes, the best route seems to be business major (Finance and something) and then doing brokerage or something related until you've built up enough capital and contacts to make it on your own.

Grad school is helpful, but mainly if you want to be hired onto an existing development team. If you want to go it on your own then grad school is only worth the money if you think it will teach you something and give you additional contacts.

Personally I double majored in Finance and Economics and at a Real Estate lawyer's office for almost three of the years I was in school. At the same time I was also doing the coursework (online because it is hilariously easy) for my Broker's License and took all the licensing exams about three months after I graduated (early, after 3.5 years) from college. This basically set me up as very well qualified to nab any entry level job in RE that I wanted. I now do brokerage and consulting for industrial and commercial projects as my "day job" and run a side business of buying up and renovating multi-family properties on the side. Eventually I am going to quit my "day job" and start doing development full time, but for now I just have to settle for doing it part time. So if I can consider myself even somewhat successful in getting into development, then it sounds like you are off to a good start.

If you do decide to go to grad school the best programs in the Midwest are at Madison (as you mentioned) and Northwestern University. DePaul and several other smaller schools also have good programs, but UW and NW stand out above the rest.

If I could give you any advice at this point it would be to do everything you can to get a position in real estate BEFORE you are done with school. If you want to have it easy after your graduate, then you should be working your ass off while you are in school. Get a part time job in RE even if you have to take minimum wage or even work for free. In Real Estate experience trumps everything else on your resume.

What school are you at now?

Yeah my goal right now is to gain some experience in the field I've heard from so many people in the field it's paramount to all and that includes helping being accepted into a grad real estate program. Personally I'd prefer to step into a reputable development team/company (build my capital through salary). I'm not very interested on going out on my own for awhile because obviously you're gonna be a part of bigger projects working for larger companies and don't share as much personal liability on projects, and can create a larger network.

I've been looking more at Curbed lately and noticed that the first page on many of the Chicago projects on SSP lists the developer which has helped me compile a nice list of companies beginning build again. Dream companies would definitely be a place like Related or John Buck Co. as their reps are pretty solid which would be great out of the gates. I'm just hoping it isn't impossible for somebody like me who has no experience in field per say. I guess I can only hope with the increase in construction coming up somebody will see the value in a student with passion for real estate/architecture with a skill set that includes financing, accounting, management, and marketing and I can get some vital experience before grad school.

Currently I'm a senior at SIUC studying finance w/ a specialization in real estate and a minor in accounting. Problem is there is 0 real estate down here. 2 options I'm considering to get things started on the side are like you said getting just a brokerage license online and possibly founding a student real estate organization to help me bolster my resume and talk to local people and what they do to create smaller scale developments such as new student housing, restaurants, etc.

Well you could always just try to get a job as an assistant or admin in a residential brokerage or real estate law office. All towns have at least one of each, even Carbondale. Those are good places to start because future employers will know you've at least had experience in how a transaction works, even if it is many times smaller than the one's you'd like to work on.

Alright I just fine-tuned my resume I will probably apply to some local places for the spring semester and hopefully can get some experience there.

On a side note, do you think with the upturn in the market and construction recently in Chicago that any of these larger companies would need to start hiring for any of these projects? It would be a huge help if I could somehow get a summer internship on a project that is in the works currently, do these projects ever attract interns or anything of that sort that I could just get some idea of the processes involved with development or any experience in the field I can get.

^^^ It's possible, but a lot of these companies are running lean and mean right now. They also are bringing back a lot of workers who have been laid off. I think things need to heat up a bit more before the money will be flowing enough to get them hiring again...

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Ok so I have a different perspective to add to this thread. I'm currently a sophomore at Cleveland State University (Obviously in Cleveland, Ohio). My major is engineering but while I like my major, I don't want to do it for the rest of my life. I want to help make my city a better place to live and in the process, make money by rehabbing the many beautiful homes and warehouses scattered throughout the city. Now I kinda have an idea on where to start but I need another opinion. I would be going into business with my roommate (He's an accounting major which is good because I don't like to deal with that type of stuff.) I'm aware that to be able to take on the big warehouse-loft rehabs, I need to start small, homes and neighbor storefronts. Now let me present the pros and cons I've identified in this situation. I'll start with the bad.

CONS:
Cleveland continues to lose population
The real estate market in general is not very strong here
Investors still do not have a lot of confidence in this city
Still a somewhat negativity towards the city (beginning to change)
We are young (both 20 years old)

PROS:
The job market is beginning to boom here again, and the job selection has finally diversified
The real estate is CHEAP!! very cheap!
UNIQUE apartments, lofts, and homes are really popular right now.
Cleveland finally has a few urban neighborhoods to work with now. (Never been like this before)
I feel I have a very good concept of what works in Cleveland and what doesn't. I know this place like the back of my hand.
The real money makers are going to be the warehouse loft conversions. Those are the most popular form of urban living in the area hands down, and if anyone knows Cleveland somewhat, there is a glut of absolutley stunning buildings just begging for a new life.

Let me hear your guy's opinions. Am I crazy, or am I on to something here? I feel that this city is really starting to pick up and anyone who has a little bit of pride and intelligence can make a difference and some money

@ Simms3_Redux:

Thank You so much for that information. That Definitely helps bring some clarity to what a Developer is. I would have never known that it was that small, although just from my own little research I was beginning to figure it would be something like that.

Just judging from your observations it looks like I won't be able to make it in that field :(. I did absolutely terrible in high school, went to a community college, and now to a public university. And on top of that, I'm African American.

I'm still considering Finance & Project Management as my majors and Urban Design as a minor. I was hoping that by working on a team, that I would have a slightly better advantage of getting into this field rather than trying to stick it out on my own........................... It looks like I'm back to square one trying to figure out what I want to do for the rest of my life.

Question: It seems like your input has more to do with large skyscraper type developments. Do you have any info you might be able to add about just regular apartment/mixed-use developments? I know participating in the creation of skyscraper would be nothing more than a fantasy for me, but is it just as intense to get on a development team that deals with small developments?

glad to see this thread living on, so since I'm still striving/learning how to better myself I'll share my 2 cents here since I'm closing in on my last semester of college.

@simms3
That was a pretty interesting comment definitely presented alot of new ideas. Also seems like you have a good amount of experience which is obviously the most important thing we lack. I'm taking quite a few finance and accounting courses right now. Recently we've done a lot of work on cash flows, bond valuations, etc. and this is the stuff I've really tried to focus on. Also just got done with an excel project on Markowitz theory so hopefully that helps learning how to build excel models, I have yet to hear of Argus but I will keep an eye out for ways to gain some/more experience with both softwares

@nowhereman
I've taken some of your past posts in this thread and tried to apply as much as I really can at my stage. I just founded a real estate club on campus for students so I'm hoping that will help for grad school/jobs with a good leadership item for my resume. This is should be a good chance for me to maybe land an internship because I'll be dealing with many local brokers, RE law firms, etc. on a personal level. Also planning a trip to STL to hopefully have our group talk to a handful of development companies around there and try and gain as much knowledge from that as possible.

Also have you heard anything about ULI (Urban Land Institute). I think I'm going to join for year and see how that is along with getting my license after I graduate.

@chitowncity
What college are you going to now? I've talked to a few people and if you get a finance degree along with your other plans I believe you'll be standing pretty solidly, not to mention even if you don't get into the field a finance degree is great to have. And if you are around Chicago, and follow the Chicago forums you can tell things are picking up steam. I'm not saying that anything is a given but there is clearly alot of work picking up in local RE. As nowhereman stated most will probably still keep a short staff, but it wouldn't hurt applying for as many possible finance/admin/REIT/development companies as possible for little jobs like being an admin or getting an internship. If you are looking into grad school I've looked at the MRED program alot. They value any job experience in the finance industry equally as much as RE, and this industry is EXPANSIVE so you should be able to find something...but I suggest doing as much RE related things as possible around yourself, luckily I had the opportunity to build my own group and we'll see how big i can grow that.

Also from my grad school research I tended to notice mostly the value of a degree. I really really wanted to get an MRED degree cuz its so real estate related and I'm still looking into applying for a couple even though I need to focus on graduating this year. But also I've heard from credible people that a MBA focusing on RE AND finance would be excellent, and obviously the better the university the greater the value. Plus like I said earlier you walk away with more flexibility as well. I really would prefer DePaul or UW Madison (GPA aint getting me into NW).

One last note if all else fails going into selling homes and brokerage is another legitimate way to get a start in the industry as well. Learn to sell and value what you have, gain personality and knowledge about RE/transactions, and NETWORK. Not where I wanna be but still an option.

This is a good discussion, hopefully it leads to all things best which is good and Responsible development for our great city.

Agreed that it is uncommon, but there is nothing stopping anyone who is an architect from becoming a developer, other than themselves. It just seems that many architects feel uncomfortable by the notion of development, by taking on risk. Its really quite sad.

Other notable Architect/Developers are Johnathan Segal, Sebastian Mariscal, Onion Flats and Alloy in NYC. They have all gone beyond the point of dabbling in development like so many architects frequently do and have found great balance between the demands of finances and design.

Sounds like you've gotten a good start. Are you going to school in Chicago?

I've read a lot of the reports/research that comes out of ULI. The do good work. Could be a good place to check for internships as well.


I think you might find that grad programs aren't as focused on GPA as you fear. The MUCH more important factor to grad programs is your resume. You could have graduated with a 2.0 from a community college and get into University of Chicago if you are the CEO of a $50 million company you built from scratch. That's why building your resume by doing things like starting a real estate club is so important.

Also, I think you'll find that UW Madison is just as picky as NW, especially for their business programs as they have a similarly selective program to NW. Madison and NW have two of the finest Real Estate MBA programs around.

Hope it's a good start, lol I've done research on the web the last few years trying to get as much knowledge as possible so I hope it pays off as I feel like I finally found the right path. No I am a senior at SIU down south. I switched from architecture to management to finance (real estate) an seems like it was the right way to get into development. Also noticed thru MRED n grad school research they put emphasis on leadership and having a genuine interest in RE, which is why I hope things like my club/ULI present not only resume boosters but hopefully opportunities.

Yeah ULI looked like a good chance to get some real knowledge on how the industry works and since it's my last semester to get it as a student I am planning on it getting it anytime.

I never looked at GPA and admittance into grad school like that but I guess you are probably right. I think me trying to be admitted into grad right after I graduate is prly unrealistic even though it'd be nice...but I guess if it can help earn a better degree getting good experience right away can only help. I def feel like if I can somehow pull off getting UW, NW, or now I'm looking at Depaul more extensively I'll be set for a good career. Depaul has gone up my list since all I've heard lately is the importance of gaining connections where you intend on working and also they offer opportunities for students to work and attend grad programs concurrently. We'll see what happens the real world is coming pretty quick...

For the sake of keeping this thread going I'll post a simple question since I'm closing in on graduating with a finance degree. Say I get out of here degree in hand, gonna probably be hard finding a development company that's decent around Chicagoland hiring even though that'd be ideal. But what other routes are there to take? I hear from many people in the industry starting as a broker isn't bad since u learn the trade, transaction process, n how to sell. But would that be better than a smaller time finance job with just any company? I need something for a bit of work experience to help my grad school chances in between undergrad and grad. Thoughts?

If you are closing in on graduation, I'd start working on a brokers license. That's what I did right at the end of school and it's opened the door to a ton of opportunities for me. I will say that residential brokerage is NOT the way to go and that you should try to shoot for commercial brokerage and learn industrial or office brokerage. It's a great way to learn the fundamentals of putting deals together and to start building a network.

I'm finally closing in on my deal of being able to actually start my own independent development company and will probably open a brokerage arm as well as I've recruited a few friends who also have licenses to join me. What is really driving my business plan now is a Private Equity fund that I'm putting together to buy up small multi-family properties. I own two buildings now and have another under contract and am waiting for a response today on a 4th one that my partner and I put in a cash offer on (I'm pumped about this one as they've indicated we are the top offer right now). I wouldn't have been able to afford or figure out how to do any of this without the base that two years of brokerage has given me.

Anyone serious about getting into real estate should seriously contact Donald Trump about an apprenticeship. His company develops allot of very interesting properties.

Donald Trump? Never heard of him.

I'm sorry, this is a crock of complete sh*t. Skip this scam and do real research instead, either on your own or hiring a Planner. I can pretty much guarantee all developers I deal with would laugh at that statement.

This topic is really interesting to me because I'm currently in a one year graduate school program at Tulane (Master of Sustainable Real Estate Development) that essentially, is geared towards making the student become a developer. Its actually in the School of Architecture. The curriculum basically blends building-design, finance, economics, real estate, case studies, and legal issues all together, with an emphasis on sustainability. Its interesting, because in the past you didn't just go to school to "become a developer" and our program is one of very few kind that now exist for that. In the past, people became developers from very diverse backgrounds. Many ex-architects, real estate agents, businessmen, people from the public sector with influence, lawyers, brokerage agents, private lenders, etc. Really any background, but of course the main key is being someone with a lot of money, or having a partner with money.

The paradigm now sees development as something that is done best by generalists that can know a little bit about every aspect of the developing process. A lot of the development process is becoming consolidated, and you have many design-build companies now. The idea is that just being an architect, a real estate finance guru good with spreadsheets, or construction manager isn't cutting it anymore. You need to educate yourself in every part of development to become a developer, and its becoming a well-defined discipline.

With that said, I'm only a few months into the program so I'm still learning. I was actually a Biology major in undergraduate, with some studio art experience, and very little real world experience so this was a huge jump for me with a lot to learn. My class though is made up of architects, business and finance majors, some people with design-build experience, real estate agents, an artist, and a few others with a similar background as me. I think they may have been flexible in who they accepted in the school, as this still a very young, growing program.

As the year goes by though, I'll be glad to give a more polished answer on going about being a developer other than just "go to school". The program definitely is giving us a head start advantage in the field, but again, there are really so many paths to getting into the business, with academia perhaps being a newer option.

Its ultimately knowing a little bit about everything, networking, the willingness to live the majority of your life teetering on the verge of financial collapse, self-motivation, always having vision, and being very creative about finding financing.

Any developers out there?

I've been in the biz a couple years now... I work on larger projects (20mm+) for a firm and also am starting to do some smaller projects on my own (<1mm)... Breaking ground on my first project by myself in march

What is the project?

Just a couple for-sale rowhouses... Urban infill in philly

Excellent, I'd love to see them. I've done lots of spec houses and one small 10 lot subdivision.

I'm working a big project in Chicago right now. I'm not the boss by any means, but I am a minority partner and working on every step of the project. We haven't announced yet, but I'll share the details as soon as I can.

Cool sounds like the role im playing in a large (for me... 150 units) project in philly...

Ya its been a learning experience so far... dealt with too much zoning bs for what should be a simple project

I hope to build for 90-95 psf, seems realistic... just hope that contractor estimates hold up and theyre not blowing smoke

$90-95/SF??? That seems really low, am I missing something? Seems new construction in Chicago runs no less than $140/SF, but then again I've never been involved with single family construction, so maybe it is lower than I think.

I know an israeli in philly that builds for 70 psf... but he has his own crew, equipment etc

Union cconstruction in philly is like 190 psf

Non union single family homes in phila will range from 80 to 120 or so... work done by immigrants

Edit: this is just hard construction costs

That seems reasonable. Im sure its higher than here in DFW, which will have a wild range in construction cost depending on exactly where. City vs non city etc. Our bottom range will be 75-95 psf for ground up construction cost. Thats for your average spec home. Of course they sell low as well....

I work for a developer and have been in the business for a few years now. Eventually I want to start owning my own small scale projects on the side to build the residual income stream but it isn't a buyers market with where cap rates are now on assets in stable areas.

You can research it yourself and go the way according to your dreams.

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