Philip Goforth of Missouri Explains the Real Estate Development Process

Philip Goforth of Missouri is a construction and real estate development professional, with a focus in multi-family expansions. In the following article, Philip gives insight to the real estate development process and the various stages of development.

The success of a real estate development project hinges on risk management. When each step of the process is clearly laid out, developers have a better grasp on what costs and risks are possible down the line.

Philip Goforth of Missouri explains that the real estate development process contains four phases: initiation, conception, management, and marketing. There are different approaches to some of these steps, depending on what the starting point and final goals are.

Here, Philip Goforth of Missouri details how a project comes together.

Philip Goforth on The Development Process

Real estate development can be an extremely lengthy process, sometimes spanning over the course of several years. While the end result can lead to financial success, it will only get there with careful planning and risk mitigation in place.

It's important to note that these steps are not purely chronological. For example, while initiation should be the first step, it may overlap with marketing explains Philip Goforth of Missouri.

Project Initiation

The first phase of development is the initiation, starting with a location, an idea, and money to back it all up. Usually at the beginning of a project, only one of these are present.

Philip Goforth of Missouri states below a few different approaches that a project may take:

• The location is set, but the ideas and money are not. In this case, a real estate company gets into contact with potential investors with a project idea for a property the investor already owns. If the investor agrees, they'll offer their own input for the idea - along with their cash.


• Demand is present, but location and funds are not. Here, there is a need for a certain type of real estate, but there's no set location or money to back it. In this case, consulting zoning officials and city codes to secure the location and proceed.


• An investor needs location and an idea. Here, a private or personal investor is looking to break into real estate but needs a company with the access to locations and planning to push the project along. With 70% of rental properties owned by individual investors, this is not an uncommon scenario.

Once location, plans, and a source of funding are in place, the development process can proceed to the next phase.

Conception

This is the phase of analysis and conceptualizing the final product. In this phase, it is crucial for the real estate group to proactively consider what the best- and worst-case scenarios for the project are explains Philip Goforth of Missouri.

Weighing of the positive and negative possibilities must occur before any major time or money sinks into the project. Looking at the project through multiple lenses mitigates potential risks from many different angles, such as:

• Economical


• Sociological


• Competition


• Location


• Market analysis

Aside from risk management, this step in the real estate development process should also tackle the legal needs of the project. This stage sees environmental assessments, surveys, and permit acquisitions. Infrastructural improvements should take root in this stage if they're needed.

Securing the land that the project will occupy can be a process that is wrought with hurdles and obstacles. Local jurisdiction, neighbors, and zoning laws are all things that could butt heads with the developer.

The time to iron out these issues is during the conception phase says Philip Goforth of Missouri.

Management

In this step, developers finalize their designs and delegate tasks out to project managers. This phase is all about planning. Tasks and control of each sub-step must be coordinated between developers, external construction teams, and architects.

Marketing

Marketing the project may seem to be the final step, but it should also originate early in the real estate development process. After beginning, marketing throughout the process allows for early leasing or sales. Starting sales early minimizes risk.

A well-managed real estate development project should take full advantage of a marketing specialist throughout the process. A marketing specialist will provide insightful suggestions using their experience and expertise.

Part of this step should involve strengthening digital marketing strategies, especially when the real estate in question is housing focused. After all, 43% of home buyers begin their housing search online.

Conclusion

The phases of the real estate development process each play an important part in the success of the end result. While there is great investment opportunity to be had in real estate, a great risk factor lingers over the lengthy process as well. It's important that each stage is clearly communicated and handled by organized, proactive project managers.