If someone wants to eventually go out on their own and start a development company, what’s the best/most feasible asset class to develop? Assuming they won’t be inheriting any substantial land or funds.
Initially my thought is multifamily. Finding a half acre and developing 5+ townhomes seems within reach if you saved up enough or found LP equity to get approved for a community bank construction loan.
Another thought I had was small, family medical offices for fees. A few of my friends are currently in medical and dental school. Since they’ll be doing well for themselves in about 10 years, they could be a source of LP equity and they’d probably be willing to fund equity for a project that they actually understand.
The only hurdle would be partnering with someone who has a substantial balance sheet to provide a repayment guarantee for the first couple deals, until you’ve built a balance of your own. If you build a track record developing for an existing company during your junior years, convincing someone to put up money shouldn’t be too hard.
What are your guys’ thoughts or plans for when you start doing your own thing?
