Blueprint for Local Real Estate Developers

What will I walk away with?

Here’s what you’ll gain:

• Developer Confidence — Step into your role as a Local Real Estate Developer™ with unshakable belief.

• Project Clarity — A crystal-clear vision for your first (or next) development.

• Proven Roadmap — The exact step-by-step process from idea to shovel-ready.

• Partner Playbook — How to assemble the five strategic experts you need on your team.

• Zoning Cheat Sheet — Quickly decode what you can—and can’t—build on any site.

• Industry Glossary — A go-to resource for all the acronyms, terms, and lingo.

You’ll walk away knowing exactly how to become the changemaker your community needs. This is where your legacy begins

A note from your mentor

We are dedicated to helping others succeed by sharing the abundance of knowledge and insights we’ve learned throughout our real estate journeys to empower YOU to become the Local Real Estate Developer™ in your community.

By the time you finish this course, you’ll believe that you CAN be a developer in your community and be a driving force for transforming your neighborhoods!

NOW is your chance to dive into the world of real estate development and make a positive impact in YOUR COMMUNITY!

Development allows your creative side to thrive!

One of the most common questions asked by new real estate developers is, "I found the property, what do I do next?"

To simplify the process, we've created a comprehensive, easy-to-understand guide detailing the entire development process. In this lesson, we'll cover the high-level steps of each phase, providing you with a framework that we'll explore in depth throughout the course.

Since development is NOT linear, this 5-step process is your strategic blueprint to help you understand where your project is at each step of the way.

Understanding Zoning and How it Impacts Development Projects

Zoning is how municipalities implement land-use regulations in their community to control how each property is developed. Zoning is intended to ensure the health, safety and general welfare of the public.

The purpose of zoning regulations is to divide a municipality (e.g., city, county, village) into residential, commercial, and industrial zones in order to:

• Protect the community from incompatible uses

  • Example: you wouldn't want a nightclub next to a middle school or a manufacturing plant operating 24/7 next to your house

• Provide orderly development of the land

• Provide adequate public infrastructure (e.g., roads, water, sewer, transit)

Each zoning designation will have:

• Allowed uses: projects can skip zoning and go straight to permitting

  • Just like taxes, if you build what the government wants, they reduce the red tape you have to navigate

• Allowed uses with Planning Department approval: the municipality wants the right to add conditions to a project or deny a project if it's not a good community fit. This is designed to be a subjective decision process.

  • Working with City Managers and elected officials early in the process will save a lot of time and money

  • Examples of conditions (typically add cost to the project):

    • Limit hours of operation

    • Require street improvements such as new turn lanes, sidewalks, streetlights, etc.

    • Require building exteriors to include additional architectural features​​​​​​​

Navigating Local Government Departments

Community Development Departments

• Are staffed with government employees (public servants)

• Help guide the public through the development process

• Key departments include:

  • Planning/Zoning

  • Building

  • Engineering

  • Public Works

  • Fire

  • Utility Services

Community Boards​​​​​​​

• Planning Commission (Appointed): Board composed of city residents that evaluates and makes recommendations on proposed development projects

  • Types of approvals: special use permits, conditional use permits, variances for parking and setbacks, rezoning, etc.

• City Council/County Commissioners (Elected): A legislative body of the municipality, charged with making the final actions and decisions on proposed development projects

  • ​​​​​​​Types of approvals: Rezoning, creating/amending parcel maps, modifying the master plan and zoning ordinance

• Kristi was a Planning Commissioner in Lake Tahoe (Douglas County, Nevada) for a couple of years

Elected and appointed officials

• Create community initiatives to promote housing, economic development, etc.

• Including the Mayor (Elected) and the City/County Manager (Appointed)

Define Your Overall Vision & Specific Development Goals

Getting clear on your vision is the foundation of your success.

Clarity equals inspiration: When we have a clear vision and purpose, we are energized and motivated to achieve our goals. It's important to take the time to clarify our goals and priorities to ensure we are working towards what truly matters.

What makes a good project? Well, that depends on your overall plan and strategy.

1. Define your strategy.

   • ​​​​​​​Will you be holding the property and leasing it out to tenants who pay rent?

   • Will you develop a new 3-5 unit commercial building, and sell it for a profit?

2. Start by picking your market. We recommend choosing a market that you live or have lived in. You have the advantage of understanding the community’s needs:

   • What’s missing?

   • What needs upgraded/repurposed?

   • Where can you add value to your community?

3. Identify a need in the community. How can you add value through real estate development?

4. Determine exactly what you want to develop. What type of development will it be? Business offices, retail shops, industrial units, housing, or something else?

5. Create a checklist to define your site selection criteria. What are the minimum requirements for this type of project?

Example: number of acres, number units, required parking spaces, certain distance from competitors?

The 5 Strategic Partners You Need as a Developer

• Brokers set the stage for transformation by pairing visionaries with the right properties.

• Architects act as the creative team behind the project, translating a developer's vision into detailed design plans.

• Lenders are the financial backbone of real estate projects, offering insightful economic strategies to support the developmental vision.

• Civil Engineers are instrumental in planning the project's infrastructure, ensuring it is feasible, safe, and sustainable.

• Contractors are the builders who transform plans into physical structures, managing the complexities of construction and bringing the developer’s vision to life

Strategies for Finding Your Ideal Project

Now that you know the types of projects you want to build, it's time to roll up your sleeves and take action!

Collaborate with your broker to find a property where you or your future tenant(s) will be able to run a thriving business. Your broker will play a vital role in identifying the right property and negotiating the deal terms with the property owner’s team.

Option 1: Partner with commercial brokers

Find brokers that specialize in your type of project. This is key to ensuring that you’ll be able to find the best tenants to lease your property once construction is complete.

​​​​​​​Option 2: Consider government-owned land

Partner with your community via public private partnerships to develop public land into much-needed spaces.

Option 3: Work your relationships and social circles

Engage your family and friends and share your vision. You never know who might own land that they don't know what to do with.

Option 4: Find off-market properties by cold-calling

Find properties that match your vision and call the property owners directly! Call the owner of the run-down building or vacant property you keep driving by. You might be able to solve their problem AND create a vibrant space for your neighbors!

Option 5: Have a tenant/operator in hand

Once you have a tenant, you can find the exact property that fits their new or expanding business! Maybe you know someone who has a coffee shop, brewery, or restaurant in a neighboring community, and they are looking for their next location.

Initial Property Evaluation

This is how you make sure the property conditions and the assumptions you made when getting the land under contract (physical assessments and zoning) are what you thought they were.

• Confirm zoning will allow your proposed tenants and uses to operate

• Confirm the utility companies can provide services to the property

• Hire an architect to draft a site plan that complies with the zoning ordinance

• Obtain verbal terms from lenders and confirm their interest to fund the project

• Complete preliminary underwriting to make sure your deal is profitable

Project Kickoff with your Development Team

Now that you have a “real deal,” it’s time to finalize your team and start working through the development process.

Once you’re ready to kick off the project you’ll:

1. Finalize the project team and execute consultant contracts

2. Build out project expectations, schedules, and milestones

3. Finalize the project budget

4. Hold a kickoff meeting with your team to outline the project’s expectations.

Complete the Physical Property Due Diligence

Property due diligence is a buyer's (your) investigation into the physical condition of the property.

Common assessments include:

• Geotechnical Report: Identifies existing soil conditions for structural design

• Title Report: shows legal ownership, debts, easements, etc.

• ALTA Survey: Property surveys outline:

  • Boundaries (property lines)

  • Easements (access, utilities, etc.)

  • Existing improvements (structures)

  • Utilities (overhead or underground)

  • Topography (provides the shape and layout of land)

  • and more!

• Phase I & II Environmental: Reviews historical property uses and physical soil testing, if recommended by the Phase I

• Asbestos Survey: Typically recommended if there are existing buildings

• Structural Assessment: Typically recommended if there are existing buildings

• Mechanical, Electrical, & Plumbing (MEP) Assessment: Typically recommended if there are existing buildings that will be remodeled

• Due Diligence Report (DDR) with the Jurisdiction outlines:

  • ​​​​​​​Zoning regulations and all code requirements

  • Required permits and process to obtain them

  • Timing to obtain all necessary permits and approvals

If the findings come back with new information, it doesn’t mean your deal is dead. It just means you need to think differently about your project and find a new path forward with your team, such as:

• Negotiating new purchase terms with the seller

• Changing your design to fit the new findings

• Collaborating with the city on possible design variances they could support

Obtain Zoning Approvals & Building Permits

Navigating the permitting process is part of Kristi's secret sauce. We'll get into those details in the next course! The typical permitting process is outlined below:

Step 1: Obtain entitlements/zoning approvals (Planning Department)

• Required approvals are project-specific and will vary by municipality and zoning

• Estimated time: 3 to 12 months

Step 2: Obtain all necessary permits (Building, Fire, Engineering, Public Works, etc.)

• Required approvals are project-specific and will vary by municipality

• Estimated time: 3 to 8 months

Step 3: Obtain utility provider final designs and contracts (water, sewer, gas, power, and telecommunications)

• Each utility provider has its own process for providing utilities for your project

• Estimated time: 1 to 8 months

DEBT: Loans from Banks, Private Lenders, or Seller Financing

• Regional banks: Preferred for commercial projects, based on their familiarity with the local market

• Private equity groups: more flexible than regional banks, but their terms might be less favorable than a bank

• Seller Financing: The seller can finance the entire loan or take a second position to a bank loan. This is a great strategy for emerging developers!

EQUITY: Personal capital OR money from equity partners

​​​​​​​When you don’t have enough of your own money to provide the full equity required by the bank, you can source the funds in many ways. Other people’s money (OPM) comes with a price and those costs need to be accounted for in your underwriting (UW).

Private money loan: evaluates the property & borrower

Hard money loan: evaluates the property's performance​​​​​​​

Joint Venture (JV) Partnership: leverages each partners' strengths for a deal

Syndication (GP/LPs): raising outside capital from many sources (more complex)

Overview of the Construction Process

Construction, while not easy, is a fairly straightforward process to turn those blueprints into physical structures. Below is an outline of the sequence of events and the key players involved in a typical construction project.

General Contractor (GC) Bid & Selection Process

1. Identify GCs in your market that specialize in building projects like yours

2. Prepare a GC Bid package so that the scope and expectations are clear

3. It's typically recommended to obtain 2 to 5 bids per project

4. Evaluate and qualify all bids to ensure they have captured the full project scope

5. Finalize the construction schedule and all key milestones

6. Select your GC and execute the GC contract

Assembling Your Construction Team

1. Ownership / Developer (You)

2. Construction Project Manager

3. General Contractor: hire and pay all subcontractors

4. Testing and inspection companies: ensure the GC’s team is building per plans

5. Construction surveying and staking: ensures everything is built in the right spot

6. Architect and Engineer: oversee construction and answer GC plan questions

7. Municipality & Utility Provider Inspectors: field inspect all work

8. Lenders: field inspections for work completed prior to paying monthly draws​​​​​​​

Finalize Your Exit Strategy

CONGRATULATIONS, YOU DID IT!

Whether you plan on keeping the development or selling it, you have accomplished a MAJOR feat by this point! You are now officially a Local Real Estate Developer™!

OPTION 1: Keep the property for monthly cash flow & tax benefits!

1. Execute all tenant leases

2. Obtain a permanent/stabilized loan from your regional bank

3. Onboard property management team and set clear expectations

4. Leverage the tax benefits of owning real estate!

OPTION 2: Sell the property and cash out (maybe 1031 into your next deal)!

1. Execute all tenant leases

2. Coordinate with your broker to market the property

3. Complete the sale and pay off your debt and equity partners

4. Leverage tax strategies to roll your profits into the next deal!