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  #101  
Old Posted Jul 17, 2014, 12:12 PM
Larry King Larry King is online now
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Originally Posted by ChiTownWonder View Post
do you have to be rich to be a developer? isnt it more about loans and financing?
Generally yes

for a conventional bank loan you will need liquidity. Banks need to be comfortable knowing someone will step up and fund the project if it goes over budget

But there's other ways to skin a cat

you can find a rich partner and give him a piece of the backend for guaranteeing the loan

you can get a hard money loan
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  #102  
Old Posted Jul 17, 2014, 2:27 PM
LouisVanDerWright LouisVanDerWright is offline
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Originally Posted by ChiTownWonder View Post
do you have to be rich to be a developer? isnt it more about loans and financing?
Actually, not really. Generally they are rich, but the key to development is using other peoples money. Really what you need are rich friends who are willing to be equity investors so you can secure a construction or rehab loan.

I'm closing on two lots to build 4 flats on and sell as condos this month and not using a dime of my own money. Even better yet, I am trying to tie up three buildings with 13 units total where the current owner owns them free and clear and is contributing them to a JV so I can redevelop them. One of them is a huge 35'x125' corner lot where I hope to build six or more condos on top of retail. It's easy to get the loan when your JV owns the property cash.
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