Real estate development can be very exciting, creative, and profitable. An experienced developer may have the opportunity to borrow all of the development costs. However, there are real risks associated with real estate development because risks and returns are directly related, and expected high returns usually indicate high risks. Some common subdivision development risks are cost overruns, bad weather, too few sales per month, lower prices, higher marketing costs, and labor strikes. Larger developments that require large initial development costs and longer absorption periods are considerably more risky than smaller developments. The trick is to sell lots much faster than interest accrues on the development mortgage loan and before economic conditions change.

If you are a real estate developer, please share your experiences.

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As a developer I am pleased with most of the out come on my projects. However most people do not understand how challaging it is to accomplish such a task. The logistics are made difficult by economy, bankers, local county officials and employees. Thank goodness the reurns are healthy most of the time. We always are looking for investors in these projects either ground floor or pre-development lots sales. Great returns either way!
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