Why do people say it's easier to start as a developer?

Anyone who says that hasn’t done a development deal.

Developing is way harder, but nothing is more fulfilling than saying "I built that building." 

I guess this really comes down to what people mean by "developer".   That is one of the dozens of words in this industry that have like 30 different meanings and hundreds of variations of each depending on who you are talking to. I would say that narowing this down will do a lot to answer this question.  

Is it easier to build a single home than raise the capital and team to buy a 300 unit apartment complex and execute on a full value add play?  Yes.  Is that easier than building a 125,000 sqft retail shopping center and leasing that up?  Also yes. 

Your last paragraph is what it boils down to. When people say it’s easier, they mean less capital intensive to start/ make real money.

EG if you have 200K of your own cash and can raise an 80% partner, you would have $1M to invest. Even if you find the perfect core asset to invest in, your GP profits are going to be in the 10s of thousands. Good luck keeping the lights on with that.

However, if you use that money to buy a land site, entitle it, get a high leverage construction loan, and build a huge project on it, now you’ve got something hypothetically worth $10M+ and your profits are in the 100s of thousands, if not 1M+ when you sell. Its a lot more work and a lot can go wrong every step of the way, which is why the pay is greater. Also why your investors will expect + require higher returns. Nobody is saying its easy, but it’s a faster way to a large paycheck than sitting on assets.

Starting out in development is extremely difficult. Unless the land is dirt cheap, or you can negotiate seller financing or an extended purchase option of some type, there isn’t a reasonable way of acquiring it. Plus the predevelopment work to get approvals, that’s a lot of cash out of pocket.

If you can partner with a developer with an established track record, you have a shot but not easy to do that.

BIPOC developers are actually positioned way better to start out, as their are a bunch of debt products explicitly for no track record, land + predevelopment financing

The complete opposite is true. Nobody wants to be a developer due to its sheer difficulty, risk, capital, and connections and knowledge needed. There’s a way bigger moat to start as a developer than acquiring an existing asset

No one says that

Sweat equity.

Development takes a lot of vision, relationship building, execution, and luck. Often, at the opportunity cost of a W2 salary. 
 

One person brings more money, “gray hair.”  The other person brings energy, experience, execution ability, vision. 
 

How does a person with no money get their first ownership interest?  This is a common way. 
 

From there, you learn how the game is played - the good and bad. 
 

Take away the uncertainty, and make it easier to execute, and the person with money might forego having a partner, or just hire a 1099.  Mystery must be there. 

There needs to be enough economics (upside) to justify for the money person to share.  Development has characteristics of this risk reward, sweet spot.

In real estate, due to large capital needs, very hard not to have partners.

You've got two very different ideas percolating around in here.

For starters, development is WAY harder than acquisitions, and way riskier.  Buying and managing an existing, cash flowing building isn't easy, per se, but (depending on size) many of the challenges you'll face in doing so are little different than those faced by being a homeowner, or owning a second home that you rent out - something that millions of people do with relative success.  Development entails a ton of risk, a ton of time, and ton of hoops to jump through even to get started, without even considering whether it'll be successful.  In that sense, buying a building is easier than constructing one.

However, reading between the lines a little, I think the question you are answering, or wondering about, is whether it is easier to be a developer or raise an acquisitions fund, and in that case I think the pendulum swings back towards being a developer.  If all I'm doing is buying an asset, then it is an easy story - you are pitching a specific deal and a specific business plan, and while it might take some time and effort, there is a deep and broad market for that.  If you want to raise a fund, then you're selling yourself, and more to the point, selling yourself in competition with not only other funds, but every other deal out there.  Why is anyone giving you money for a future investment, when they could either give it to someone with a better and longer track record (and resources in house to manage them) or to someone with a specific deal or three in mind?  Once you start talking in that sense, development looks easy again, because it is deal-specific, and while it is extremely risky capital, it requires much much less. 

Which is why, if you're a W2 employee somewhere with experience and the chops to handle it, buying a building as a side hustle and managing it and expanding slowly is a way better route for "doing your own deals" than leaving and saying "I'm going to open my own development shop."  However, I think that someone with 15 years of experience at a reputable developer is much better positioned to open their own development firm than their counterpart in a REPE firm is to go and raise their own fund (and be successful, of course).  

Just my 2 cents.