Is it possible to succeed in Real Estate Development without a finance background?
Hi Friends,

I am currently getting my Master of Architecture degree in grad school but I am actively wanting to pursue real estate development. I have been taking some finance boot camps and talking to some people, but a lot of these concepts seem to be very analytical based and it seems companies would only be hiring finance-experienced majors. While this analyst side is more of the financial modeling, are there roles for more of choosing the site and construction side that my background would allow me to excel in? (No pun intended.)

I also would love to hear about your experiences about the day-to-day tasks, the level of excel and finance required, and whether you are happy in the profession or not. Any advice or explanation of your experience would be wonders to my career.

Thank you all so very much.
[{"id": "gim90l9", "text": "Interesting question \n\nI'm curious too\n\nIt seems finance is big part in development\n\nAnd the next part I assume would be construction engineer or construction degree", "replies": [], "depth": 1}, {"id": "gimhqee", "text": "Keep learning the finance. You'll need to know a decent bit. I did a development degree with a lot of folks getting a dual degree in arch/dev and they often didn't have time to focus on the finance.\n\nThat said, no you don't need a degree in finance. I would look around at smaller design build shops. I had a bunch of friends get jobs there. The finance won't be as complex and you'll be super valuable bc you could also potentially do design work or construction management. You could also fit into a project management role. It's mostly time/people management. They said, knowing the finance will be more important when you're involved in the entire dev cycle", "replies": [], "depth": 1}, {"id": "gims83c", "text": "I work in development. It\u2019s an aggregate skillset. You need to understand all aspects of the process - financial, legal, transactional, construction, engineering, Etc. There is no \u201cbest\u201d avenue. I prefer transactional as I think you get the most exposure to the most facets of a deal. That also happened to be my path so I\u2019m biased. As long as you\u2019re gaining a breadth of experience, you can make the transition. Always be the dumbest person in the room and ask a lot of questions.", "replies": [{"id": "ginzh42", "text": "Hey! I\u2019m a university senior with a finance degree interested in real estate development. Is it better to go straight into development or to get an entry level position elsewhere and then cross over? Whatever your recommendation are there entry level positions that are better than others or one\u2019s you\u2019d focus on? \nThanks in advance!", "replies": [{"id": "gio4bko", "text": "Development requires a somewhat unique skill set, particularly when it comes to understanding local planning and zoning laws, locality specific approval and development timelines,as well as some of the transactional nuance in land deals and valuation. I\u2019d say try to get into development off the hop, but if you can\u2019t, try to get into a brokerage as an analyst on a land team. Other facets of real estate are easier to cross over, you can go from the debt side to the sell side to buy side fairly simply as all of those positions are different sides of the same coin to an extent.", "replies": [{"id": "gjfacqz", "text": "Land team analyst is a great intro to development. You learn the big picture, some of the nuance, and will likely be at the top of the stack of resumes when a development position opens up, if you don\u2019t get recruited directly by a developer.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gimu60v", "text": "The short answer is yes,but only if you have a lot of money and luck, or you look for a partner who understand the finance aspect of it.\n\nThe thing is you need to run the numbers to have an understanding how feasible is the project, what are the risks and if the return is worth it. You will also need to show this to any bank that will lend you the money for your development or any partner who will put their cash. Not understanding certain concepts would put you in a disadvantage.\n\n For example, let's say Mr. A has 1mm and is interested on a return of at least 8% annually on their money. He obviously would like more, but he needs at least 8%. You tell Mr A that your project will him yield 12% and that you would be equals and profits will be split in half. I tell him to do a waterfall, where the first earnings will get his 8% and then we split 30/70. It could be that he will pick me, even if I promise \"less\" because he knows he will be safer as an investor with me.", "replies": [], "depth": 1}, {"id": "gimwydd", "text": "My experience (limited, but a few AAA credit tenant BTS projects) leads me to recommend that development is the most haphazard of the noble CRE professions to kind of fall into. No two guys have the exact same resume, and there isn\u2019t really a school you go to for it. \n\nIt\u2019s more like being an maestro in a symphony. Maybe you don\u2019t even know how to play half of these instruments but you know how each part of the orchestra works together and how to make music. You just need to 1. HAVE A SHIT TON OF MONEY BEHIND YOU, and 2. Know that you\u2019ll be the best at exactly NONE of the tasks along the way, but you better be half decent at identifying the people who ARE the best. \n\nSo it takes social savvy, being rich (or persuasive enough to get funding if you aren\u2019t), a fuckton of humility, some analysis background, some finance, some principal-role investing, a little bit of everything.", "replies": [{"id": "gio0czu", "text": "I'm a developer and this is the correct response. Development at its core is about project management. For a basic ground-up build, the developer is the ultimate decision-maker for legal, finance, geotech, surveying, title work, zoning, environmental, municipal approvals and relations, architecture+engineering, contractor/subcontractor selection and pricing, brokerage/leasing, property management, etc. I'm particularly good at 2 or 3 of those things and probably objectively bad at a few more of those things. What we do is manage our consultants and ask a ton of questions so that we can assimilate each piece of the puzzle into our project. \n\nTo me, the most important skills that I have and that I respect in other developers are being organized, being creative, and being curious. If you've got those things, you'll pick up the technical knowledge you need along the way.", "replies": [], "depth": 2}, {"id": "gipf3mo", "text": "This. IMO it\u2019s a difficult proposition to be a master at each individual skill set that goes into real estate development. Work on becoming well versed in each skill set as engineering, transactions, and often brokering certain land are done hand in hand with a professional in a given field. You don\u2019t need to know everything but you need to have the ability to have an intelligent conversation about all phases of the process to be able to make business decisions. \n\nIf you are able to get your foot in the door always keep your ears open. Prep for each individual meeting and then take notes during and study anything you were unclear on after.", "replies": [], "depth": 2}], "depth": 1}, {"id": "gin3krj", "text": "In NYC there\u2019s developers that have in house construction and architecture teams. There\u2019s also GC\u2019s that get so big they become developers. You want to target these firms. \n\nYou can enter on the architectural or project management side. If your end game is developing on your own, I\u2019d recommend the PM side.", "replies": [], "depth": 1}, {"id": "gin7acv", "text": "I have a masters degree in architecture and my personal advice is to run away from the architectural profession as soon as you can. It's totally messy, really elitist and ridiculously badly paid for the effort and knowledge required. \n\nSaid that, after a few years as an architect I did a master of specialization in real estate and up to today that has been the best decision I have ever made.\nIt's not easy but if you have a good mind and you like logics and math, real estate finance is not so crazy.\nYou have to put a big effort but it's doable and you will see the difference from day 1 into the profession.\n\nIn my opionion, the most important things to know are : \n1- Discounter cashflow modeling and transactions as well as financial modeling in general;\n2- All the juridical aspects of development (laws, development plans, municipalities' masterplans, etc.)\n3- Negotiations skills : you have to know how to talk about every single aspect of a construction without really mastering and controlling it and be convincing in front of your clients/partners.\n\nGood luck :)", "replies": [], "depth": 1}, {"id": "ginjreu", "text": "I studied finance in school and entered the industry and an analyst for development shops.  Currently working towards MBA.\n\nI think it depends on the role you want to have in the process.  You obviously will need to understand the numbers (returns, sale value estimates, debt strategies,tenant feasibility, etc) but as others have mentioned development requires all of the skills you\u2019ve outlined above.  As I moved to associate level it became more strategy focused on tenant mix and product types. Our company has entire departments dedicated to leasing, acquisitions, legal, dev./design, and management. Financial understanding runs through all of these but all are important to the process. I think the question becomes what role YOU want in the process.", "replies": [], "depth": 1}, {"id": "ginvase", "text": "YES. I have an undergraduate degree in \\*drumroll\\* agriculture. I work in real estate finance and had little relevant experience before my current job, which I love. I have had a *wild* career path and I am definitely an exception rather than norm, though anything is possible!!", "replies": [], "depth": 1}, {"id": "gio66qq", "text": "I found my way to CRED via construction management with an engineering degree. Real estate developer seem to be a fairly entrepreneurial bunch that like hiring people who can wear many hats. I\u2019m learning the financial modeling as I go (for free, no MBA tuition). I think an Architectural background can be very valuable in CRED, I\u2019d advertise your ability to create places under a competitive budget. The stigma with Architects is that they make cool renderings that can never become economically viable or constructable. Show that your practical AND creative and you\u2019re golden.", "replies": [{"id": "giysu3q", "text": "Cool! I have the exact same background as you and I\u2019m looking to make the jump to a developer. Would you mind sharing how exactly you moved from a construction management company to a developer? I honestly figure that networking and cold emailing developers is an approach that could work.", "replies": [{"id": "gj6qkvo", "text": "Lots of networking, keep your LinkedIn updated. Try to build your resume around the job you\u2019re targeting. Join ULI to make contacts and learn the players in your area. Keep your eyes peeled for active developers in your area and make contact with them, maybe you can help them as they get closer to, or during, construction. Tell architects and engineers you\u2019re working with your career intentions, they know a lot of developers and can make the connection. Helps to be in an active/growing city, so you may need to consider a move (don\u2019t know where you are). At the end of the day, I got a call from a head hunter.", "replies": [{"id": "gjb1i25", "text": "Great thank you for the advice. I\u2019ve been networking the best I can considering COVID and all, and have had a few headhunters talk to me from LinkedIn but nothing serious yet. I think given the current market developers are on hold for a bit but I\u2019ll keep trying!", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "giotfao", "text": "I'm in the same position, I'm doing my M.Arch but I really want to get into RED. I think exactly the same as other posted. I need to boost my finance knowledge more and algo start attending the social circles I'm interested.", "replies": [], "depth": 1}, {"id": "gipvca9", "text": "Yes. Many developers come from architecture, construction, engineering backgrounds as well. However without having finance understanding it\u2019s much harder to succeed as a developer today. \n\nI also graduated with an architecture degree in undergrad, then went on to complete a masters in real estate. \n\nAs a trained architect, i was able to understand and control a project from a construction and project management perspective, however I always found myself lacking in understanding how to underwrite and value a potential deal.", "replies": [], "depth": 1}]