The following Q&A was completed as part of our conversational Commercial Real Estate FAQ Interview Series, we hope you find it helpful.
Making that first investment into a real estate development project should be a learning experience, and the knowledge you receive is just as important as any return you might make. Partnering up with an organization or a trusted experienced partner is recommended, and you should take every lesson throughout the process to heart. What you learn with that first investment can help you to make better deals going forward.
Richard Wilson: Okay, what if an investor is looking to make their first investment in a real estate development project, what would you suggest them to look at first to get that sort of first experience?
Chad Moss: Geography would be the first thing, I would say, and then you want to look at comps, you know, as far as similar type products that come online.
Richard: Okay, great.
David Greer: Yeah, along with that I think for a first time investor I think it’s really important that they surround themselves with the right team that has experience in their respective markets as well as making sure that they don’t take too big of a bite of the apple that they’re for their first one. Think about who can they connect with to make it an educational type process, which is just as important as what return may be generated from that particular investment so that..
Chad: Yeah, they can learn a lot from partnering with a much larger organization as a joint venture minority partner. And maybe see a couple of those through the process would be beneficial to them.
Richard: Right, right, yeah, great, good point. Versus doing it on their own.