Purchasing a piece of land for a potential development is known as speculative development. Generally, real estate development is quite a risky endeavor because it is dependent on the public sector for approvals and infrastructure. In addition, real estate development is a long-term investment with little or no positive cash flow.
Organizing for development involves setting up a development team to oversee different aspects of your real estate development. There are several ways of putting together a development team. Some real estate development companies have large teams that provide different services ranging from architecture to engineering. Other companies have one or two principals with a few staff, and hire or contract other companies or professionals for each real estate development service.
One of the most important aspects when organizing for development is assembling a team of professionals to address the economic, ecological, and political issues experienced in real estate development. Successful real estate development is determined by a developer’s ability to coordinate interrelated activities efficiently and at the right time.
Because of the high number of required disclosures, documents and inspections required in real estate development, organizing for development is increasingly becoming an essential aspect of real estate development. Organizing for development is essential because it helps create a team that will provide better quality service to clients and leads to an increase in production.
Once you have decided to set up a team to oversee different aspects of your real estate development, it is important to consider the structure of the team, the tasks that will be delegated, the responsibilities of each team member, and determine who reports to whom.
Job Functions to Consider:
The main role of a listing coordinator is to manage all real estate development documentation. The listing coordinator is also responsible for managing correspondence to potential and current listings, preparing pre-listing packages, following up with sellers and agents who show the property, and preparing ads and flyers.
Once the offer has been made, the escrow coordinator takes the file from the listing coordinator to ensure all inspections, money agreements, disclosures, lender issues and escrow issues are handled. The escrow coordinator takes care of various aspects of the real estate project from the time the contract is awarded to the close of escrow.
Field coordinator or runner
The roles of the field coordinator interlink with those of the escrow coordinator and the listing coordinator. He is responsible for handling all signs, flyers, and delivery of pre-list packages.
This professional handles all buyers by showing the property and prospects for new buyers. Once the buyer’s agent gets the contract accepted, he hands the transaction over to the escrow coordinator and goes on to look for the next deal.
The job of the prospecting agent is to find new listings. His main role is to set appointments for the lead agent to follow up on. He generates leads and appointments.
Having the above structure is important when organizing for real estate development. However, some businesses may not be ready for this structure at first. When hiring your first team, consider combining the listing and escrow positions. In addition, hire a part time runner such as a college student or someone who is willing to work part time. These steps will help you save time and money, and still have an efficient team.
Organizing for development requires the skills of different professionals including landscape architects, market consultants, civil engineers, and site planners among others. Planning and organizing are crucial aspects in real estate development. The more time you invest in organizing for development, the easier your work will be and the less frustrated you and your team will be.
Roman Temkin is a real estate developer from NYC.