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I’m Convinced. There Are Only Two Types Of Real Estate Developers

They’re both good. But they’re very different…

I was having a conversation with an aspiring developer in my community.

We were walking around town discussing possible sites for his project. He’s interested in expanding his small business and diversifying his income with some apartments.

I suggested a particular neighborhood and he said, “I definitely wouldn’t go there…”

His voice trailed off.

He’d forgotten that’s where I live. I wasn’t offended. But his mind was already made up. Anywhere but there.

As I reflect on that conversation I wonder, how could he be so sure? As a business owner, how could you rule out any option so quickly?

You might have your own ideas on why he passed. I think it’s because he would rather be one type of developer than another.

Density Developers

These developers are the ones that start raising baseline density after it’s been stagnant for a long period of time.

These developers are on the cutting edge.

These developers are fast, first movers.

These developers are entrepreneurial, can tolerate more risk, and are likely generalists.

Intensity Developers

These developers tend to be the 800-pound gorillas. The big ones. The specialists.

They don’t want to be 1st.

They don’t want to be cutting edge.

They want to build where the people already are. Their bankers need the proof. Their prospective tenants need the foot traffic.

Anywhere But There

The aspiring developer I met with wants to be an intensity developer. He doesn’t want to be first. He wants proof. He wants to be where density already is.

If I could go back in time I’d share that being a new developer and having an intensity developer mindset is difficult.

Everything will be more expensive. You won’t be part of the fabric of the community, you’ll be one of the new people from the outside. It might be less risky and easier (more comparables, less market research required) but how long are you willing to wait?

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