How To Become a Real Estate Developer

Real estate development can be a rewarding and lucrative career — if you’re willing to take the time to get the education and training needed to work in this field. Learn what it takes to become a real estate developer, and perhaps you will someday turn a vacant piece of land into a mixed use development or convert empty office buildings into affordable apartments.

What is a real estate developer?

A real estate developer is a person or company that oversees all the people involved in building or renovating homes, offices, retail centers or industrial sites. These projects may involve building on vacant land or converting empty, neglected buildings into new businesses and homes.

Specifically, real estate developers need to see the potential in a piece of land or property and then be able to organize the resources to turn their vision into reality. They need to develop a plan that includes finding investors to buy the property, deciding what to build or rebuild on that property and finding the contractors to complete the project. They also need to predict how much money the new homes or businesses will bring in, manage the construction and ultimately sell the project.

From start to finish, a single job could take years to complete, considering all the stages of the real estate development process. Real estate developers have expertise in the following areas:

• Land acquisition
• Market studies
• Approvals and permits
• Project financing and financial analysis
• Building development
• Building renovations

What are the requirements for becoming a real estate developer?

You can start a real estate career right away, but it typically takes a few years and extensive work experience to develop a broad knowledge of everything a real estate developer handles.

“Many real estate developers have gone to school for an undergraduate or master’s degree in real estate and finance, or even an MBA,” says David Wilson, former president of the Certified Commercial Investment Member (CCIM) Institute.

Certifications and continuing education from real estate organizations including the CCIM Institute, NAIOP or the Commercial Real Estate Development Association, and the Society of Industrial and Office Realtors also provide a deep dive into real estate development.

“I strongly believe the education provided by the CCIM Institute is one of the best places to learn about cap rate, internal rate of return, depreciation, etc.,” Wilson says.

To become a real estate developer, Wilson recommends the following:

A step-by step guide to get into real estate development

Step 1: Get the necessary education

Many universities offer undergraduate, master’s and MBA real estate programs within their business schools, building a strong educational foundation for a real estate development career. Future developers can learn about real estate law, finance, environmental remediation, public policy, urban planning, architecture and other areas of development.

Students may also get project-based experience to add to their portfolios, as well as internships that lead to building a network of contacts within the industry. “If there is an opportunity to jump into an internship program with a development firm, that is always a great route,” Wilson says.

Step 2: Gain experience in real estate

There are typically two paths you may take to get your feet wet in real estate development after graduation.

Work for a real estate development company.
Top real estate program graduates may get hired as junior development associates at a real estate development firm. Some tasks you might take on with entry-level real estate development jobs include:

• Client communication over the course of a project
• Developing budgets
• Lining up vendors and contractors
• Ensuring projects stay on schedule
• Talking to neighbors near a project to support community development efforts
• Working on financial models
• Conducting market research
• Assisting more senior members of the firm

Finding someone to show you the ropes during these types of jobs can be invaluable to growing your real estate development career. “I also highly encourage people to find a mentor in the industry that helps guide them and direct them when it comes to the do’s and don’ts,” Wilson says.

Work in related real estate fields.
Some people choose to become real estate brokers to learn how to put deals together. Others work in building construction, finance, architecture or commercial lending to make contacts and gain experience. Regardless of which real estate field you choose, according to Wilson, a large company can give you access to a bigger pool of experience: “I am a firm believer that if you’re just starting out, there is no better place than a bigger firm where you can learn from multiple people.”

Step 3: Consider additional certifications and courses

Many current and aspiring real estate developers pursue additional specialized education to advance their careers. Trade organizations offer numerous real estate development certificates and courses.

Certifications. The CCIM Institute offers the CCIM designation, as well as a comprehensive Development Specialty Track. NAIOP, the Commercial Real Estate Development Association, offers advanced certificates for commercial real estate development and real estate finance.

Courses. CCIM’s course offerings include an introduction to real estate development workshop, a comprehensive Development Specialty Track program and a formal designation in commercial real estate. Earning the CCIM pin requires courses in financial modeling, investments, market analysis and ethics, as well as a rigorous comprehensive exam.

The NAIOP offers online and in-person classes, including certificate programs in commercial real estate development and real estate finance.

Getting started as a real estate developer

You’ll need to set realistic expectations for yourself when you first start out in real estate development. “I think there is a mentality that you can graduate from college, become a real estate developer and make $100,000 plus your first year,” Wilson says, adding, “it’s not going to happen.”

You also need to have a strong work ethic if you want to succeed. “Real estate development is not an eight-to-five job,” Wilson says. “If someone is getting into the business and thinks they can just dabble in it, I would disagree wholeheartedly.”

Here are some tips worth knowing as a new real estate developer:

Build relationships. Relationship building may be the most important factor to success as a real estate developer. “You do business with people you know, like and trust, and once people know they can trust you and that you’ll deliver for them, they will want to do more business with you,” Wilson says.

Find capital. If you don’t have a substantial amount of cash at first, you’ll need to find partners who will front the money. “Learn the business and co-invest with someone you trust and respect, if you can,” Wilson says. You may also want to start learning which commercial real estate loans are available, and what the qualifying terms are.

Constantly grow your knowledge. Real estate developers study the market to see what it needs, and then design projects to meet those needs. “Learn each and every day about the business,” Wilson says. “Soak in as much knowledge as you can, and remember, no two deals are the same.”

Buy land. Now that you have access to cash, you’ll need to acquire property on which to build. You may purchase vacant land or older buildings to rehab or demolish.

Develop a plan and get it approved. Real estate developers study the market to see what it needs, then design a building project to meet that demand. You’ll likely need signoff from the local government before breaking ground.

Build. Once you get approval, you can construct the new building or rehabilitate the older one on your property.

Sell the project. Once the project is complete, selling it becomes the main priority. Getting your real estate license so you can make some extra commission can be tempting, but it may be better to focus your time and energy on new development deals.

How to become a real estate investor with no money

While developers typically invest some of their own money, the bulk of the financing comes from commercial loans, and the majority of the equity in the project comes from investors. These investors could be real estate investment trusts (REITs), pension funds, private equity firms, family offices and other private investors.

You may be limited to private lenders and “angel” investors at first, including successful friends and family members who are looking to diversify their retirement income. Private investors may also find the social value of a project, such as affordable housing development, appealing.

The average real estate developer salary

Real estate development can be a high-paying field, but salaries vary depending on your experience and job type. The table below shows the annual median salaries for common positions in real estate development as reported by Glassdoor, a job search platform that lists salary information.