Martin J Stallone, Executive Vice President of Land development and Managing Director of Metropolitan Development Group, has more than 20 years of experience in strategic land development and municipal and structured finance.
Here are a few tips for getting your own land development consultant business off the ground:
1 Know The People.
It takes knowing people who know people and developing those relationships.
Martin J Stallone, as a developer, is the “Grand Marshal” who puts everything in place and makes sure schedules are adhered to and everyone is where they are supposed to be when they are supposed to be there. When it comes to tangible products, like land development, many developers like Marty Stallone seek to take a hands-on approach that interacts with all parties of interest to the transactions.
These parties will include friends (i.e., economically vested private partners or experts), real estate agents/brokers, architects, builders, contractors, subcontractors, lawyers, environmental inspectors, utility companies, lenders/bankers, surveyors, tax planners, sellers, taxing entities, title companies, title insurance agencies, neighbors/locals, and local zoning officials.
There are great risks involved, but also great wealth to be gained. “Tara Terra Firma” is always a hot commodity for investors. Land developers are creators of wealth, and they know that even if they have all the money, it’s not sound business practice to invest it all on their own.
Gaining partners and other moneyed investors is the best way to get a land development company off the ground.
2 Know Your Budget.
Vested people like Marty Stallone and interested parties are the experts you need to get your land development company off the ground, especially in this age of high technology designed to do detailed worked at a fraction of the costs and time of doing regular business.
By the time you start looking for land to buy and develop, you and your partners have already discussed what land is available and its future potential for residential and/or commercial or mixed-use purposes.
You already know what you want and what to put there, and you already have the numbers figured out for how it’s going to work, including costs and potential foreseen (maybe even possible unforeseen?) profit.
You will know how much money you have to put in out of pocket, and what the gold-havers/rule-makers are expecting from you.
Marketing feasibility studies have been done, or you have at least taken a hard look at what’s around you, at what is working, and where you fit in.
3 Know that the unexpected will happen. Be Prepared.
If you’ve ever watched one of those “house-flipping” television shows like the ones on HGTV, you already know that ‘stuff’ happens in the process and that it is inevitable. Have you built in a sizable enough cushion fund to handle the deficiencies?
It is highly possible that your inspector and the termite guy could have a huge deal-breaking difference of opinion about preventing infestation, so be prepared to shift relationships if need be. In the end, the decision to proceed -legally of course- is your own.
It is a good idea to have a good grasp on why some projects may not ‘fly’ no matter how much time and money you’ve invested in them.
Get to know your land surveyor and environmental inspector very well because before you can put another dime down on the best-laid plans, their input either stops it or moves it forward.
4 Critical Relationships.
Personal relationships are critical to a land development consultant company.
Chances are you are not aiming at a commercial market, broad audience, or even affiliates to help launch this type of business. Locals are the biggest audience, so you do not want development plans unwelcome in the neighborhood.
The act of “Kumbaya” friendship with the ‘natives’ is extremely essential here.
5 Banks, Not Buddies.
They smile in your face, but the banks will talk about you behind your back.
In order to get your land development business off the ground, know that your bankers will think of every excuse to pick your plans apart and figure out why it will never EVER work.
They might love the ideas you have but also hate the fact that they are responsible to their own investors for every cent they loan. If anything affecting profit should go wrong, investors will want to know why the bankers didn’t see it coming, even if it wasn’t possible.
No money, no deal.
6 Understand the Leverage Involved.
If you are a politically and business-savvy person, like Martin J Stallone, you know the legal and political climate of your operations in the land development planning game.
Failure is not an option, and only predators play the real estate game just to lose it. Not you.