Real Estate Development

Real Estate DevelopmentAdrian Rubin: Real Estate Developer

The real estate business is still one of the best ways to make money, bar none. If you look at the history of the wealthiest individuals and families in the world, you will see that real estate investments dwarf the fortunes produced by other businesses and asset classes. The richest man in history, John D. Rockefeller, is said to owe his massive fortune to real estate. His net worth is estimated to have reached $192 billion and no other person has come close to this figure; Commodore Vanderbilt had $143 billion while John Astor had $116 billion. Today’s richest man in the world, Bill Gates, only has $82 billion. This should put context to the power of real estate.

For all the wealth real estate can produce however, there are risks and challenges that every investor should mentally and emotionally prepare for. Real estate development in particular is a very demanding and capital-intensive business, which can push an investor to the brink of bankruptcy if he or she does not play his or her cards right. And even when he or she does play them right, there are still far too many variables that are out of his or her control such as the state of the economy and the real estate market.

The truth is, many small players who get into real estate development do not have the funds to proceed with their real estate projects. To get their project off the ground, they bring in investors and when things do not go as planned, this is when everything falls apart. There is this saying that risk can happen slowly at first, then suddenly all at once. This aptly describes the nature of real estate development, its risks and rewards.

It’s not always about the money. Needless to say, an investor would have to have a solid team of professionals around him or her—engineers, architects, lawyers, real estate agents—if he or she wants to succeed in this business.