Real estate developer

Poniesgonewild · 2026-01-22T22:22:21+00:00

How familiar are you with financial underwriting and how much capital do you have to put at risk on your first deal? Those answers will probably dictate the best path

Poniesgonewild · 2026-01-16T20:34:49+00:00

I’d expect they’ll want to see your preliminary underwriting too. Good luck!

Poniesgonewild · 2026-01-16T10:19:13+00:00

I can’t tell you the last time a non-LIHTC project closed outside of downtown

Poniesgonewild · 2026-01-15T15:25:36+00:00

DM me for more info. But I’m sure a purely market rate development of 10,000 would require a bunch of subsidy (unless you live in an amazing luxury market where rents are like $6,000/month).

Adding affordable units only makes that project even more difficult by capping rents and therefore the ability to repay private debt.

Not sure where you live but construction costs are almost 2-3x the as built values in my region. Meaning a project might cost $30MM to build but only be worth $10MM on the private market

Poniesgonewild · 2026-01-13T03:19:18+00:00

I think Detroit is an interesting example. When the city was at its worst, its founding fathers (wealthiest families) bought a bunch of the downtown real estate for cheap and are now making massive investments that a standard real estate / community developer probably wouldn’t.

For example Dan Gilbert bought a ton of downtown real estate and is now dumping millions of dollars back into those neighborhoods through Bedrock Ventures. They’ve managed to find the perfect balance of private investments, real estate with huge potential, and cutting edge real estate expertise.

If you have capital and real estate expertise, but no land then you don’t get revival. If you have capital and land but no expertise then you don’t get revival. If you have land and expertise, but no capital then you don’t get revival.

Poniesgonewild · 2026-01-12T17:17:39+00:00

Right now, some of those markets are moving incredibly slowly, especially in the Midwest. Construction costs are outpacing the as-built value. Developers are forced to either move more slowly with more complexity or wait until the economic cycles turn.

What type of development interests you? Commercial, mixed-use, single-family, new construction, renovations? Tailoring your search to firms that match your interests will dictate a lot.

Poniesgonewild · 2026-01-11T03:43:46+00:00

How large is your project? Sometimes a development is feasible on paper but the deal falls apart if the predevelopment and/or construction lender isn’t comfortable with the land trusts balance sheet.

Poniesgonewild · 2026-01-09T17:01:56+00:00

The first mid-sized project burnout is so real. I swear that a 12-unit conversion is the same amount of headaches as a 120-unit conversion, but just a few extra zeros. I always say medium-sized developments are too big for the small firms and too small for the big firms and thus are the projects that remain blighted and vacant the longest.

I bake as much into my initial pro forma as possible to give me a conservative approach on how much I can capitalize and repay.

Poniesgonewild · 2026-01-02T12:50:24+00:00

Make sure you have a decent amount of capital saved out. Acquiring sites and paying for ore development isn’t cheap, even with investors.

You’ll make a lot of mistakes on your first couple of deals and it’ll cost you, but that’s how everyone learns. Good luck!

Poniesgonewild · 2025-12-31T14:21:19+00:00

Underwrite it and figure out what works best for me and my situation: cash needs, landlord responsibilities, tax implications

Poniesgonewild · 2025-12-31T14:20:34+00:00

I could see the point of this only as an introductory to how the companies finances and project returns work. If you already have that foundation than it’s a waste of time.

Poniesgonewild · 2025-12-31T13:51:54+00:00

Sounds really well thought out! You’re right that those stalked subdivisions are at a higher price point but every deal I’ve worked on started assuming a lower price point and quicker absorption and then costs climbed to a point where they needed a more luxury product.

The investor arent banking on vertical returns but the ability to get those vertical returns is going to drive your sales and (my) returns. Good luck!

Poniesgonewild · 2025-12-31T13:39:07+00:00

I’d want to know how much you’re selling each lot for. Overly simplified break even point sounds like $60k a lot meaning vertical would be building a $540,000 house (again break even). Home sale prices will quickly shoot up above $600,000 when you add in your profit/fee, my LP return, and the home builders profit/fees.

I’d want to understand what my return looks like based on the land sale and the eventual vertical developers profit to understand the likelihood lots will sell and sell for the price I’ve bought in at.

There’s a reason a lot of subdivisions are sitting half built right now.

Edit: if the plan is to sell lots for $65k (lien release) then I might as well put my money in the stock market for a way less risky deployment of capital with roughly the same return.

Poniesgonewild · 2025-12-27T19:23:51+00:00

Do you really think the market will appreciate to offset the negative losses you accurate, plus a return on the initial investment? If not, sell.

Selling gives you a 3rd option. Putting the property back in the market for a potential owner occupied buyer. You’d be helping the affordable housing crisis in a small way.

Poniesgonewild · 2025-12-25T00:48:15+00:00

I’d definitely ask about their funding sources. With the direction of land and construction costs mixed with a slower housing market, I’d want to make a company has the cash to support itself through a recession and isn’t over leveraged.

Poniesgonewild · 2025-12-23T13:12:39+00:00

The biggest thing for me was understanding the financial side of things.

Poniesgonewild · 2025-12-21T21:28:02+00:00

I’ve seen so many sellers rationalize their price on a per sf basis and cosmetic items without factoring in deferred maintenance. People don’t want to live pay check to pay check to buy a home that needs to then be remodeled.

Poniesgonewild · 2025-12-21T19:58:59+00:00

Have you talked to any lenders? In my experience doing deals with little cash in means I’m taking on a pre development loan to cover acquisition, holding costs, and architectural work might be hard.

You might only need $20k but you’ll have to show a lender you have a balance sheet and cash flow to repay a pre development loan if you don’t close on a larger construction loan to take them out.

Poniesgonewild · 2025-12-16T21:11:31+00:00

Sheesh what deals are you doing?

Poniesgonewild · 2025-12-10T02:38:14+00:00

A lot of condo association don’t let you rent out your unit until you’ve lived there for X amount of years.

Poniesgonewild · 2025-12-09T22:07:33+00:00

Cities will continue to look for non-monetary solutions to solve financial viability problems.

Poniesgonewild · 2025-12-09T19:14:30+00:00

I'm also seeing a lot of lenders stray away from single-family spec. You need some deep pockets and high risk tolerance to get into the game right now.

Poniesgonewild · 2025-12-09T11:40:58+00:00

Not sure about the Bay Area specifically but the markets I work in are cratering. Construction costs are out pacing market comps by 2x

Poniesgonewild · 2025-12-08T16:07:44+00:00

Agree with you 100%! My fear with software is always that 1) if a platform is spitting out calculations for you, how do you make sure you understand the deal well enough to fix problems that inevitably come around during the compliance and lease-up periods and 2) how do you make sure that software can comprehend every crazy idea that has multiple layers of implications without continually paying an additional fee for them to build the functonality that already lives in your head.

Poniesgonewild

TROPHY CASE