How much capital do you need to start a company?
More for discussion, and somewhat business plan/asset dependent, but how much money would you say you need to start a real estate investment (or development) company?)
To those who have started one, how much did you have saved?
Enough to fund your predevelopment expenses and buy a piece of property, as well as enough left over to pay your personal bills.
Obviously that will be a lot different if you're building a triplex in a suburban community than it is if you're building a 300,000 square foot office tower in downtown Manhattan, but... ask vague questions, get vague answers
For development, arguably you only need enough to tie up the property and fund your predevelopment expenses and living expenses. Once you've de-risked the deal by getting your land use permits, you can raise the rest of the equity and then close on the property.
That strategy of course depends on whether the seller accepts a long P&S timeline, which is more common in some places than in others. Where I am, it's common to put a moderate deposit down, make completion of land use permitting a condition of closing, and make the deposit refundable if you don't get your permits.
A friend of mine started with a property management company, then expanded into RE/development after income became stable. So, technically those were just savings from college part-time jobs. About 20K. And then the prop mgt firm made about 80K gross after a while and it also develops the network and knowledge.
I'd say starting a brokerage probably requires the least amount of capital but the revenue you generate is dependent the value or quality of relationships you build with clients.
If you start a PE or development company you'll need a lot more money by comparison, but this will really be dependent on what parameters you target with each investment.
Ea incidunt doloremque quod maxime. Est vel dolorum nihil quia repellendus. Optio asperiores quos tenetur cum ullam vel sint.
Non pariatur quas velit laborum sequi. Velit voluptatibus praesentium et dolorum quibusdam eaque esse amet. Ut voluptatibus voluptatem cupiditate. Voluptatibus provident aperiam repellendus iste.
Vel vero placeat ullam occaecati provident sequi dolorum. Omnis alias veniam illo nam ab culpa aperiam. Quia necessitatibus qui voluptate amet. Dolorem sequi consequatur non quo voluptatem velit doloribus. Quisquam itaque nihil voluptate dolor.
Aut sint dignissimos aut placeat. Placeat ea voluptatem voluptatem et. Porro omnis nulla earum soluta libero maxime possimus. Consectetur aut id quas iure dignissimos molestiae. Sit non rerum quia unde quia mollitia. Odio aut aut qui optio tempora officia.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...