Based on your results from our Real Estate Investor Quiz, we believe Development may be the right investment option for you.
Because you have at least $250K to invest and have experience with construction and contractors, investing in development can be a smart investment for you.
These projects often involve purchasing a small home in an expensive neighborhood that may or may not need work. The home is bulldozed and a new home or duplex is put on the lot, or the existing home is renovated and more square footage is added. A pop-top is adding a second story to an existing home to create more square footage. Learn more about why so many Denver homeowners want to pop the top of their home in this article.
Pros and Cons of Development
Generally, only those with extensive real estate experience invest in development. At this point, the investor has a large amount of equity. They are also well-versed in all aspects of real estate investing, construction, and management.
Pros of Development
- This can be a great way to build equity in a hurry.
- If you hire a good project manager, your time commitments can be considerably lessened.
Cons of Development
- Your credit score needs to be extremely high to qualify for the necessary loans to complete construction. Watch this video to learn how one investor funded his development project and subscribe to our YouTube channel for more content.
- The time investment for scouting a project is extensive: at least 160 hours.
- During the project, you will need to commit at least 10 hours, or more if you are less experienced with working with contractors.
Find out more about the challenges of real estate development on Investopedia.
What’s Next?
Connect with our agents to help you find a property to develop.