The road to residential redevelopment is different for everyone, but one common aspect remains the same: anyone can do it. Becoming a residential developer doesn’t require a special degree, license or certification to get started, but rather a particular set of elements: A purpose, a mindset, and a dedication to see things through to the end. The following is a first time real estate investor guide to breaking down the composition of a residential redeveloper, as well as the process of residential redevelopment and how to get started, including key elements investors need to achieve success in real estate.
What Is A Residential Redeveloper?
A residential redeveloper is another term for real estate investor. It essentially pertains to a specific type of real estate investor that centers primarily on residential homes such as single-family properties, multifamily properties, and condominiums. The process of residential redevelopment is identical to that of traditional real estate investments, as initiatives include prehabbing and rehabbing homes, as well as utilizing them for passive income, such is the case with rental properties. While a real estate investor aims to take advantage of real estate opportunities, whether with residential, commercial properties or land use, a residential redeveloper aims to take advantage of up-and-coming housing markets where the ability to buy low, sell fast, and earn healthy returns are accessible.
Along the physical traits of running a business, such as financial backing and a lead generation campaign, residential redevelopers also need the intangibles of a reputable investor, like ethics and integrity. These two things not only hold immense value to an investor’s real estate business, but are generally determining factors in the longevity — and success — of an investor’s career.
“I maintain wholeheartedly that uncompromising ethics and integrity are the backbone upon which every business should be built, and residential redevelopers are no exception. No real estate investment business, for that matter, is stronger than the one buttressed by a steadfast desire to do what is right,” says Than Merrill, my colleague at FortuneBuilders and CT Homes.
“My own personal endeavors into residential redevelopment have been aided considerably by following a strict, genuine moral code: seek to serve and make every person feel significant.”
In addition to intangibles, it’s important for beginner investors to comprehend the process of residential redevelopment in its entirety, including the introductory stages you’ll experience. The following outlines the primary stages of residential redevelopment:
Residential Redevelopment: 3 Stages Of Getting Started
While the following doesn’t reveal the recipe to investing success, it does outline the three basic stages to getting started.
Establish Your Purpose: I firmly believe the beginning stage of any endeavor is to first cement your reasoning for getting started. Residential redevelopment is not for the timid or easily persuaded, as it takes a considerate amount of time, effort and labor to achieve success. That said, the first step for residential redevelopers should be to identify your “why” for investing. Understanding why you want to invest will also serve as motivation to persevere when things get tough. I recommend that beginners take the time to write down their purpose for wanting to get started in residential redevelopment, and what they hope to obtain by doing so.
Develop Your Mindset: As a residential redeveloper, you’re going to encounter tough roads and high tides along your investing journey, so it’s imperative you have the right mindset from the start. That said, the entrepreneur mindset is a dedication to continual learning, and it’s one of the most significant elements to residential redevelopment, as this desire to learn will benefit not only inside and outside of your business, but ensure your continued effort for success.
Create A Business/Marketing Plan: While the right attitude and vision are necessary for success, residential redevelopers will need a plan in place to ensure it comes to fruition. A real estate business plan will almost always be needed as a beginner investor, as this will provide the framework to your business success. Along with outlining the various steps required to achieve your objective, a real estate business plan will basically serve as a living document that highlights not only what you need to do to reach your goal, but what resources will be required, and what you expect to happen. A real estate marketing plan, on the other hand, will provide the blueprints of how you intend to present yourself to the world, as well as how you intend sales to be made. As a beginner, remember there’s a difference between a business plan and a marketing plan, so it’s important you distinguish the two now.
Establish Finance Options: Whether financing from a bank, private money lender, hard money lenders or cash, it’s recommended that residential redevelopers establish their financing options early on in the process. One factor that could play a significant role in determining your finance method will be your credit score. This valuable asset is an investor’s best friend, as it has the authority to not only retain attractive mortgage and refinancing rates, but boost negotiating power when securing a loan.
Establish Your Lead Generation Campaign: In its simplest form, real estate lead generation is stimulating interest in your company for the purpose of developing a sales pipeline. It’s not only a critical part of the selling/buying process in residential redevelopment, but long-term success as well.
As a residential redeveloper, your lead generation campaign will essentially be the implementation of stage one and two, working in unison to achieve your primary objective. Like any campaign, it will consist of various working components to attract and capture real estate leads. In most cases, this will involve an assortment of tactics, such as direct mail marketing, networking, content marketing, and even social media.
X-Factor: The final ingredient for success as a residential redeveloper is due diligence. This intangible component is a comprehensive appraisal of your business dealings, as well as a persistent yearning to study relevant information and improve — and it’s imperative to succeed in residential redevelopment.