How to start a successful real estate venture

Real estate is one of the highest-returning, low-risk investments available. It does take more capital than playing the markets, but the real property, relative stability and frequently huigh returns over both short-term and long-term investment periods make real estate an attractive choice.

For entrepreneurs, real estate ventures may be more lucrative and less demanding than many start-ups. Rather than finding customers, positioning products or services, and managing a team as you chase that elusive point of profit where income finally outweighs expenditures, real estate ventures are relatively straightforward and involve minimal overhead beyond the actual investment sums.

Many entrepreneurs have grown their wealth, power, influence and capacity via real estate ventures. Adnan Imam has achieved success in real estate and this has allowed him to diversify into finance and private equity holdings with impressive scale and reach, as well as interests in technology and recruitment. Real estate investing or development can be an end in and of itself, but it also opens doors to self-financing other ventures such as a passion project or self-funded business.

There are a few ways to get started. Obviously, you want to have some capital to start with, but don’t let this limit you unnecessarily. It’s not necessary to be able to independently finance a multi-unit development to get started in real estate. You can get involved in a joint venture for a much smaller sum, or start with small investment properties in the residential, vacation or commercial sectors.

Larger developments do tend to offer higher returns, so joining with partners to develop a site can be a wise investment. Start by doing thorough research on your potential partners, as well as the site in question and the market forces that could impact its success. You’ll want to develop a good working knowledge of the real estate market for the type of development and the location in which you’re considering investing.

You should pay attention to past sales figures in the area and for similar types of developments, as well as political or socioeconomic factors that could influence a new development’s success. This could include political promises for financing, rezoning, densification or other community development initiatives, as well as grassroots and social campaigns around the direction that development moves in the area in question.

You need some skilled professionals on your team. When you’re just starting out, you might ask for referrals from more established real estate entrepreneurs and retain team members on a trial or temporary basis. You’ll probably work with consultants or agencies at first to vet legal documents, finances and even logistics.

Networking will be key – you want to connect to people who know what they’re doing, have an ear to the ground, and more experience in successfully predicting market shifts. It’s wise to spend some time connecting with others and learning before jumping in on real estate ventures.

You may also find that you gravitate toward a certain type of real estate, such as social housing, innovative building techniques, sustainable and “green” building practices, brown-field redevelopment, high-end residential or large-scale commercial real estate. Finding a niche that you care about and are motivated to learn about and understand helps you become an expert faster and a go-to authority or resource for related investment opportunities.

If you have a very strong business leadership and project management background, you might want to do more than simply invest in someone else’s project – you might want to lead your own development team. This is riskier and more work, but can result in significantly higher rewards. Start by learning the market. While some skills are transferrable, every sector has its own uniqueness, and you don’t want to rely too much on your experience in a different professional background. Build relationships, research and make strategic hires of consultants, agencies or dedicated staff as your budget and needs dictate.

Whatever you do, avoid making commitments that you can’t keep. It’s important not to overreach, either financially or in terms of capacity and capabilities. It’s better to start small and scale up, whether that means a joint venture, small retail or commercial unit, or more limited development effort rather than a very large real estate venture. You’ll build your reputation and developer or investor brand, attract better opportunities, and have the skills to profit off of them if you scale up gradually.

You can start a successful real estate venture by identifying your area of interest, accumulating capital, investing or launching a development at an achievable scale, and networking with more experienced colleagues in the real estate sector.