What to do? Role changed overnight to Real Estate Development from Back Office Accounting / Finance

As someone who is in a similar position and has been for about three months expect for that “imposter syndrome” to stay for a while (and potentially never go away). Lean on the fact mentally that your boss specifically chose you, that you deserve this and have proven that you have the skills, effort and judgement to start and finish what will be a large and potentially lifelong journey. You will find yourself at moments where you will question if you are over your skis (you likely are), if you have the knowledge (you don’t, but you will acquire it) and if you can handle the pressure (you can).

Keep in mind you are about to enter the messy world of development and this is a very different than other areas of real estate. Although a traditional real estate finance background is good experience to have going into this position (knowledge of modeling and numbers are a big advantage even over regional guys), you are going to have to learn, learn, learn and develop a whole new skill set.

Tips for you to succeed early in development:

• Learn a little about a lot - Development is about knowing a little about a lot. As someone running the entitlement, financing, construction, leasing and marketing process for a project you cannot and will not be an expert in every field. And frankly, that’s not your job - your job is to know what’s important in each process and to nail that while coordinating the next steps. If you do not and cannot wear multiple hats then this will not be the position or career for you.

• Be socially adaptable and keep everyone’s incentives in mind - As you go about pushing your project through each of the separate processes always keep in mind the incentives and personalities for each step or stage. You will be dealing with every level of the real estate industry in development so take note of the patterns of personalities you will meet as well as more importantly what their incentives are. For example, the entitlement process and dealing with the city is one of the most difficult steps for most but then again, most do not consider what the incentives of city workers are. Most municipal workers take their positions for the relative safety and many all care about is sticking around long enough to receive their pension (15+ years). Therefore a city worker is incentivized first and foremost to not ruffle feathers and not make big mistakes. So you do not ask more junior level city employees to make exceptions for you. Now a more senior worker with more leeway will make these exceptions for you but that’s not without them wanting to “put their stamp” on a project aka changing your window design last minute so they get their two cents in. Being a good developer is knowing you can’t make that happen (because it costs too much) but will switch the landscaping to how they like it because it will get you good will moving forward. Again, be patient and recognize incentives for those you work with.

• Communication and coordination - These are everything in development. Development is the process of coordinating hundreds of people together to do thousands of very, very simple tasks. As such, the most important skills you can have are coordination and communication. You must be able to put together the two, three and sometimes four parties to solve issues and almost every major problem results from one area of the project (design, construction, marketing) assuming another area is either doing something or wants it done differently. Always keep everyone who needs to be in the loop and be proactive in keeping others aware of activities that might impact their work/efforts.

One quick comment on your investment thesis, keep in mind a project’s size relative to portfolio size and operational capacity. The process of smaller residential rehabs has some similarities but is ultimately very different from urban ground up development. Although I wouldn’t recommend “swinging for the fences” initially, I would make sure you are learning processes and collecting data that will help you iterate for future projects. So don’t let fear of the unknown prevent you from pursuing something larger, your first development is always going to feel like a mess (and it will be at times) but that’s why it’s so important to learn applicable processes for your next one.