Would I be stupid to quit development job and move back home and figure it out?
1 year of development experience here. Not very satisfied with the corporate experience. Find it to be somewhat meaningless. Got into development for the entrepreneurial opps and want to try my best to execute on it. What are peoples thoughts on quitting and moving home and trying to source a piece of land and go from there? I still have the luxury of my parents being Alive and can live with them for the time being and forego that salary. No, they aren't rich enough to fund a project. I will probably be saying goodbye to the institutional world if I do this. On the other hand, I need a greater sense of purpose in my work and this is the only option I see. I'm sure it will be one hell of a challenge, but think it would also be a hell of a learning experience and journey. Of course, the logical questions to ask are: 1) do you have capital sources you can rely upon, 2) do you have broker relations to help you identify land, 3) Gc / architect relationships. The answer is no. But I believe in myself to figure it out and leverage my knowledge and connections thus far to do my best.
If I’m being honest push through it for a couple of years. It’s not just investors you have prove yourself to but also banks. Banks may not be willing to lend to someone with as little experience as you. Maybe for the first 5 years if you have this little of experience on your own. Also development is a multiple year process. So you won’t realize much capital for a couple years. Especially how capital is now. Especially in development.
Push it a couple of years get paid to learn. See a full deal through, and network while you are working. Leave in a couple of years with money saved and more of a track record. Plus the market may be better for a new developer.
1 year xp and thinks they are ready to go out on their own..........
People love to complicate how hard real estate is on this site to make it seem like they are such sharp professionals working in such a high barrier to entry field. It’s really not that hard.
Not sure why you're projecting that on me, I never said any of that.
The barriers to entry are rather high, even if it's not necessarily knowledge (and I'll just say this - you don't know what you don't know). You need a network of consultants and brokers, you need zoning attorneys who are going to give you advice for free, you need to have the balance sheet to execute completion guarantees and loan guarantees, you need lenders who are actually going to pick up the phone and entertain your deal and bonding companies who are going to issue surety on your behalf, and you need serious liquidity to pursue deals even if you don't get them, carry them to the point of financing, and lock your capital up in them for 3-4 years minimum. The list goes on and on and on.
I'm going to wager a guess that you have none of these things, and while it's certainly not impossible and it's been done before, to think that you can go off and do your own deals because you can put together a DCF and a budget is willfully ignorant.
Do you know what a barrier to entry is? Because your use of the term suggests otherwise....yes perhaps getting a job in real estate has low barriers to entry...but actually pursuing real estate deals on your own? People are struggling to buy houses because of the high costs (also known as a barrier to entry)..let alone starting an entire business where the premise of your business is buying a lot of real estate. And this is just the capital aspect...don't forget about knowledge, balance sheet to borrow, deal flow, construction management, networks, etc... I know a girl who thinks real estate has low barriers to entry and started a real estate investing/development firm overnight. Her dad is also a billionaire, so she could buy anything her heart desired...I think that might have something to do with her "real estate is a low barriers to entry mindset."
There’s other factors to consider beyond experience my friend. Having a family that can support you if things fall through. Being young enough to still make it back into the job market if things don’t pan out. Not having a wife or kids. It’s not all about experience.
OP said he/she has no capital sources to rely on (family included), broker relationshiops, GC/architect relationships, etc. And they only have 1 year of experience, maybe has not even seen a full development cycle on a project. So, besides the convenience of being young without a family, what exactly would OP be bringing to the table?
Also - that's a very entitled perspective you have. Just lean on your family or others if things don't work lol...how about work a few years to increase the chances of making it work (yes, experience will do that) and building some capital so you don't need to rely on others if it doesn't?
My advice would be to stick it out for a few years (try to find purpose in your role), maybe try to purchase some single family homes and rent them out to build your individual experience. I dont know what bank would lend construction against someone who has never even owned RE. If you really want to go on your own, I would suggest finding an UHNW individual, and having them fund equity on your first deal (including guaranteeing the loan). I know a friend who did this with little experience - though the UHNW individual is a family connection and that took care of the hardest part of this equation.
Without trying to pile on, I wholeheartedly agree with what others have said. Real estate is not an industry that typically rewards opportunities to people who have relatively no experience. There is just too much money and risk at stake. If you have an entrepreneurial streak, start small. Buy a duplex, live in one half and rent out the other. Refinance. Repeat. Move into bigger projects. Build a balance sheet. Time will be your friend over the long-run, but it's really really hard to start developing at age 22-23 without some inherent advantage (daddy's $$$).
You might also just not like your job. That happens. Maybe look for a different company.
What the fuck? You literally have nothing...you said it yourself...0 experience (1 year doesn't mean shit), 0 capital, 0 network, 0 deals and you want to go off on your own and "figure it out?" What advice are you looking for? Do you want people to tell you that this is a great idea? If you want people to lie to you, at least give them something to work with...you're literally telling us you have nothing going for you and then asking us if you will be successful.
Here, I'll be the first to give you the answer you want: Yes, quit and move home. As a matter of fact, don't even bother trying to "figure it out," money will fall into your lap the second you quit.
Wow. I must say I'm surprised to see the intense backlash this post is receiving. OP, a few things to note here. First off, you are asking a question regarding entrepreneurship on a forum that is full of college students, young professionals, and others who are very geared towards "high finance." Although you may think just because this is real estate, everyone wants to strike it out on their own, that can be far from the truth. With that being said, I would encourage you to pursue your goals and do as you see fit. Don't let the opinion of extremely risk averse conventional minded people deter you. There are more ways to succeed on your own that what others are preaching here as the "5-10 years experience then break out on your own route". You mentioned sourcing a piece of land. Be aware that you won't be sourcing a 200 unit development deal. However, you could start out with a value add project or small scale 4 unit development (requires much less capital, lower barrier to entry, etc). Furthermore, a role at a large instructional developer is VERY different than developing yourself. As such, also consider moving into the lower middle market. With all this being said, I quit my acquisitions job 2.5 years in and similarly pursued my own path. I started with very small deals and have decided to stay in the under 20 unit range and it has played out well for me. It is certainly possible. It seems as if most here are thinking that you think you can pull off a grand slam 200 unit development out the gate. Start small.
Way to assume and generalize everyone in this post, which I'm confident is inaccurate. A lot of us want to own our own investments...when we have everything that the OP does not (capital, strong connections, experience, etc.). I could also say you are only encouraging them because you relate to them and took a similar path, or make assumptions that you may regret leaving the corporate world or think you are better than us that haven't. Anyways, you pretty much gave the OP no real advice. With no capital, solid experience, and connections, how would they even go about developing anything? Who would even give them their money to fund the project? Very curious how it would even work as you usually need at least one of those three things...usually all three.
edit - also with starting so small, you could work FT and do it on the side and not have to literally leave your job. It doesn't need to be all or nothing. Most people do it on the side and then quit their job to work on their business FT.
We are not deterring him from pursuing his dreams...but there's a difference between pursuing your dream when you are 23 vs 30. Yes OP has nothing - no capital, no knowledge/experience, no connections, no deals...but despite having none of these things, the worst thing to not have is not having a plan. He wants to quit his job and then "figure it out." That is not the mentality to have when trying to build a business or execute a successful deal. Sure, plans fail or change over time, but a bad plan is better than no plan at all and OP doesn't even have that
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