The risks of real estate development rather than control is the number one priority for professional developers, or perhaps never developing to do. I am constantly surprised to discover after six years of teaching developers first thing we do is buy land with some of her own money and loans for most of the coast.

For new developers to take over the earth seems logical and yet the last thing a professional do. Thus begins a real estate development is the opposite of what you should do is behind the eight ball in the evening and the indicator of “risk” in sending the rise.

From a perspective of development of the land is worth only what you can do and that is determined by the town planning of their city or municipality and special zone that applies to the land you are considering.

For example, if you buy the land is zoned rural residential and wanted some townhouses or houses that could not develop.

If you purchased an industrial site and the idea was to some shopping to develop if it is not permitted by the plan of the city. Professional developers will learn the plan of the city and all the regulations that control the development of activities in certain areas of interest to them.

I mentioned other risk real estate development in the second paragraph that is overlooked in most cases and refers to the type of financing a new developer obtained if he / she buys the land as part of its first action.

Somehow it is easy to understand, because the only type of loan for the average person knows of a mortgage in 25 or 30 years. However, a mortgage is absolutely wrong type of loan to take if you’re a developer.

Why is that? Well, the mortgage must be paid each month and that means money out of your pocket every Mon That is what developers need or only the very rich would be able to develop something.

The developers do not pay the lender to finance the development of each month of your cash flow (paperback). The amount of the interest is calculated on a monthly basis in the amount that a developer left the lender. This interest is added to the amount required to pay at the end of development.

The next reason is the instrument of mortgage finance is wrong length of a development project can be anything from say, maybe one years to three years and then pay all development loans back to the lender.

Like last property mortgages for a longer period, are clearly not the right product for a short-term development.

So not experienced in property development of a new developer is committed to the earth without knowing “exactly” what you can develop and then buy the wrong financing package.

So as I said, get behind the eight ball ‘double’ at the beginning of a development is a rotten way to start your life development.

Some parts of the risks of real estate development are taken, his knowledge of the market and the lack of a development system.

As knowledge of the market many new developers do not realize they are actually a manufacturer. For example, when buying a product in a shop must have many properties to be purchased and successfully.

Should an adequate price for its target, but the value should be large, but the job that it belongs, must be designed, should be considered before engineered and many other sub-themes that form the profile of a product.

A true real estate product, whether it is residential, commercial or industrial products must go through the same process.

Because if I teach my students to develop … you are a manufacturer of a product feature that the market must “love”, so you make profit, developing a reputation and building a business.

It is for this reason that the most important thing you can do to prepare for a career as a developer for the entire process of another professional activity, which is off the track you want to study tread.

The most recent example of the risks of real estate to consider is in the business of development without a development system.

I refer back to the beginning of this article and the purchase of land that may be incorrect for areas with the financing and purchase of evil. Let happened.

Can I tell you that today … every day … The question is … “What should I do?”

Not knowing what to do you add ‘Time’ to the development of the project and the time was wrong mortgage costs you money each month to pay your capital disappear.

Can you see how bad it can get for not trained in the company and create a development or what I call it a roadmap for development. No more questions … “What should I do?”