New Development Projects - Four Common Mistakes

Considering a new real estate development project? Don't make these four common mistakes:

1) Do not assume you can build whatever you want.  Municipal zoning ordinances are in place to limit what can be built on a property. Many people don’t speak with the right lane use attorney.  Find someone with recent experience in the town or city.

2) Do not assume one product type is best before considering other options.  For example, don’t assume multifamily is the best use, when industrial or commercial may be a higher and better use.

3) Do not assume your friend that works in construction knows construction costs.  Consult with someone that is actively building in the market in the product type you are considering.

4) Do not proceed with an acquisition without doing basic soils and environmental testing.  You may have to pay up front, but this will allow you to determine the buildable site, the amount you may have to spend on soils export, and blasting/hammering ledge (rock).

A developer’s primary focus should be to manage risk.