How To Start A Real Estate Development Company: 21-Month Roadmap
To start a real estate development company, form the entity, set clear deal criteria, line up legal and finance advisors, build lender and investor relationships, source your first site, and validate the project model before acquisition In the researched plan, company operations begin in Month 1, the first site is acquired in Month 3, construction starts in Month 5, and breakeven arrives in Month 21 Actual projects take longer than company setup: modeled construction runs 10 to 20 months, and property sales are planned in Month 60 The main bottleneck is not paperwork it’s securing a financeable site with zoning, due diligence, capital, and contractor capacity aligned
Time to Open1 monthOpening prepLaunch Sequence10 stagesEntity firstKey BottleneckCapital gapZoning and debtFirst Revenue StepLease-upAfter delivery
Launch timeline
This is a short web summary of the launch plan; the XLSX export holds the full Gantt Chart.
Do you need a license to start a real estate development company?
No, a Real Estate Developer usually doesn’t need one central US “developer license” to start; the launch work is entity formation, zoning, site plan approval, building permits, insurance, contracts, and tax setup. Before making offers, review the permit path and market plan, then track demand with What Is The Current Growth Rate Of Your Real Estate Developer Business? because rules vary across 50 states, cities, and project types.
Main launch checks
Form the legal entity first
Review zoning before acquisition
Map site plan approval early
Secure permits before construction
License triggers
Contractor license if self-performing work
Broker license if representing others
Legal counsel before investor offers
Insurance and tax setup required
What are the biggest mistakes starting a real estate development company?
The biggest mistakes for a Real Estate Developer are overpaying for land, underestimating entitlement time, and counting weak investor commitments as real money. Here’s the quick math: $216k monthly fixed overhead, $425k launch capex, $56M land purchases, and a negative EBITDA through Year 5 mean the risk gate has to start before the first offer, not after closing.
Deal setup errors
Don’t overpay for land.
Don’t skip entitlement timing.
Don’t trust weak commitments.
Don’t model without risk control.
Build checks first
Proof of contractor capacity.
Environmental and utility diligence.
Readiness gate for capital.
Exit path before closing.
How long does it take to start a real estate development company?
A Real Estate Developer can be set up in Month 1, but the first project usually takes much longer: first acquisition in Month 3, first construction in Month 5, breakeven around Month 21, and payback near Month 60. Here’s the quick math: construction runs 10 to 20 months, so the company can launch fast, but cash recovery can still take years. Financing, site control, due diligence, zoning, entitlements, permits, utilities, contractor availability, and leasing or sales demand are the main delays.
Launch timing
Month 1: operating setup begins
Month 3: first acquisition happens
Month 5: first construction starts
Setup is quick; projects are not
Main delays
Financing can slow the deal
Site control and due diligence take time
Zoning, entitlements, and permits add delay
Contractors, utilities, and demand can slip
Build a launch readiness checklist before making offers
Launch readiness checklist
Use this go-live approval checklist to confirm the real estate developer is ready before opening.
1Legal / compliance
Entity formation filedCritical
The entity must exist before contracts, permits, bank accounts, and closing paperwork move.
Operating agreement signedCritical
This keeps control, decision rights, and exit terms clear across co-founders and investors.
Insurance binder activeCritical
Policy binders should cover land, build, and operations before any site work starts.
Licensing scope clearedHigh
Clear scope avoids delayed work if you self-perform trades or represent buyers or tenants.
Legal retainer in placeHigh
Retainer access matters when permits, contracts, or disputes need fast review.
2Site control / entitlements
Month 3 land approvedCritical
Oakridge is set for Month 3, so acquisition approval must be locked before offers go out.
Title and survey clearedCritical
You need clean title and survey lines before you commit cash or start design work.
Zoning and permits mappedCritical
Entitlements drive whether the project can build, sell, or lease as planned.
Environmental review completeHigh
Environmental issues can stop a closing or force costly fixes later.
Construction start approvedCritical
No site move should start until the first construction window is approved.
3Vendors / delivery
Architect engagedHigh
The architect turns the site plan into buildable drawings and permit sets.
Civil engineer engagedHigh
Civil work can change grading, drainage, and utility costs fast.
Surveyor retainedHigh
A surveyor keeps boundaries, easements, and setbacks from blowing up the plan.
General contractor selectedCritical
Choose the builder early so scope, pricing, and schedule are locked before Month 5.
Change-order controls setHigh
Change-order rules stop small scope shifts from eating the construction budget.
4Staffing / operations
Core leaders hiredCritical
The CEO, development manager, project coordinator, and controller need named owners.
Construction supervisor onboardedHigh
Construction oversight should be live before the Month 5 start date.
Property manager hiredHigh
Property management must be ready before the first rent roll or handoff.
Reporting cadence setHigh
A fixed reporting rhythm catches cost and schedule drift early.
Draw approvals assignedCritical
Draw approvals need one clear path for lender and vendor payments.
5Leasing / demand
Demand proof documentedCritical
You need real tenant or buyer interest before you spend on full launch.
Broker relationships signedHigh
Broker links open the first revenue path for leasing or sale activity.
Leasing materials readyHigh
Marketing sheets, floor plans, and pricing must be ready for prospects.
Offer terms approvedCritical
Terms should match the validated model, not just gut feel.
No-offer rule setCritical
If no pro forma is validated, do not offer.
6Finance / runway
Cash runway stress testedCritical
Run the cash model against the -$11.177M floor in Month 59.
Land budget approvedCritical
Land purchases total $5.6M, so closing funds must be real before launch.
Construction budget approvedCritical
Construction budgets total $3.705M, and overruns need a hard stop.
Pro forma validatedCritical
Breakeven is Month 21, so delays before then need extra cash.
Go-live signoff completeCritical
Final signoff should confirm the plan, cash, and controls all line up.
Want the six launch drivers that decide first-deal readiness?
1Deal Criteria
Buy box
A written buy box speeds go/no-go calls and keeps sites aligned to zoning, budget, and exit path.
2Capital Stack
$11.2M cash
Funding must close before land control, or the model runs to a -$11.2M cash trough by Month 59.
3Site Pipeline
M3→M18
A month-sorted pipeline lowers idle overhead and gives lenders a clearer path from acquisition to build.
4Permitting Path
M5-M20
Approvals are the timing gate; construction starts two months after first acquisition, so permit delays hit cash fast.
5Project Team
Month 13
Signed scopes and reporting cadence keep contractors, consultants, and in-house staff aligned as projects stack up.
6Exit Path
M60 sale
Clear rent and sale proof reduces lender doubt, especially when every property exits in Month 60.
Market Niche And Deal Criteria
Market Niche First
Pick the property type before you start sourcing sites. Residential infill, multifamily, retail, office, industrial, or mixed-use each changes zoning, capital needs, construction scope, tenant demand, hold period, and approval risk. If that choice is fuzzy, you can’t open on time because every site review turns into a reset.
A written buy box is the readiness signal. It should name target geography, acquisition type, construction budget range, rental or sale path, and approval risk. That keeps you from chasing the wrong deal and helps you say no fast. It also narrows pricing, which matters when owned sites can run from $850k to $15M and rented sites can cost $72k to $85k per month.
Write the Buy Box
Lock the niche, then screen deals against it. Don’t source broadly and hope the math works later. A site that fits the wrong use case can add zoning delay, extra design work, and more cash burn before day one. One clean rule: if it does not fit the buy box, it is not a launch deal.
Define use before site search.
Document zoning and approval risk.
Set budget bands upfront.
Match exit path to buyer demand.
Reject overpriced offers fast.
Here’s the quick filter: if the site doesn’t fit the planned use, budget, and exit path, it can slow permits, change construction scope, and push out opening. That means more carrying cost and less certainty on first revenue. The win here is simple: fewer false starts and faster no-go calls.
1
Capital Stack Readiness
Capital Stack Readiness
Funding is a launch gate, not a side task. For a real estate developer, capital has to be lined up before site control, or land gets tied up while equity, debt, and guarantees are still unresolved. That is where openings slip. The model shows $56M in land purchases, $370.5M in construction budgets, $425k in launch capex, and minimum cash of -$11.177M in Month 59.
A lender-ready package should already be built: pro forma, sources and uses, construction budget, sponsor resume, schedule, exit plan, and a clear draw schedule. One clean rule matters here: no capital plan, no closing. If that package is weak, approvals slow down, contractor deposits slip, and day-one readiness gets pushed past the intended opening date.
Pre-Close Funding Checklist
Build the funding map before you lock land. Match each deal to equity, debt, guarantees, and contingencies, then tie the cash need to the closing date and first draw. The key test is simple: can the money close before or on the same day as site control? If not, the project can stall before permits, mobilization, or inspections start.
Confirm investor commitments and lender terms.
Match draws to permits and invoices.
Set reserve cash for delays.
Block land closing without capital close.
Package the exit plan with the model.
Cash timing matters because construction starts two months after the first acquisition, with activity running from Month 5 to Month 20. If capital is late, vendors wait, lender confidence weakens, and the first phase can open underfunded instead of fully ready.
2
Site Acquisition Pipeline
Financeable Site Flow
For a real estate developer, the site pipeline is what keeps the launch on time. If the team only has available land, it can still stall on zoning, budget, or exit risk; the result is dead time, carrying costs, and weaker lender confidence. A usable pipeline has sites that can actually close and fit the model, with acquisitions planned for Month 3, Month 5, Month 7, Month 10, Month 13, Month 16, and Month 18.
Build the list from brokers, landowners, municipalities, zoning maps, redevelopment lists, and off-market outreach, then run quick feasibility screens. Each deal should show acquisition month, control method, zoning status, construction budget, and exit path. That’s the difference between a lead list and a launch-ready pipeline.
Screen Every Site Before It Hits The Calendar
Rank each site by what can block closing: zoning gaps, permit risk, budget mismatch, and weak exit support. Keep the review short and standard so the team can cut dead deals early and protect cash.
Verify zoning before control.
Match budget to lender terms.
Document exit path by deal.
Sort by acquisition month.
When the pipeline is clean, the team spends less on idle overhead and lenders see a tighter, more financeable path. That helps the first acquisitions land on schedule and keeps day-one operating plans realistic.
3
Entitlement And Permitting Path
Entitlement and Permitting
Approvals are the gate because a site is only worth what can legally be built on it. For this developer model, due diligence has to cover zoning, variances, site plan review, environmental checks, utilities, traffic studies, community hearings, and building permits before land is treated as launch-ready.
The timing matters: construction starts two months after the first acquisition and then runs across Month 5 to Month 20. If approvals slip, the deal still carries land, overhead, and carrying costs while cash is stuck in idle assets, so the opening date moves and day-one buildout can fall behind.
Lock the approval calendar
Build a written approval calendar that ties each permit step to acquisition contingencies and financing milestones. That keeps the team from closing on land before the path to build is clear, and it gives lenders a real schedule instead of hope.
Track these inputs before site control:
Current zoning and allowed use
Variance or special approval needs
Utility and access confirmations
Environmental and traffic review timing
Building permit issue date and lead time
One missed permit can push the whole build schedule, which raises carrying costs and can delay staffing, vendor ordering, and first revenue. If the approval path is not in writing, the launch plan is too early.
4
Project Delivery Team
Control delivery accountability
This launch driver matters because the developer can outsource work, but not accountability. The core bench spans 10 external roles—attorney, CPA, civil engineer, architect, surveyor, environmental consultant, general contractor, leasing broker, sales broker, and property manager where needed—so one missing function can stall permits, buildout, or launch prep.
Internal control starts in Month 1 with the CEO, development manager, project coordinator, controller, administrative support, and construction supervision. If that team is late or unclear on authority, the project burns cash before opening, and day-one operations inherit unresolved scope, budget, and handoff issues.
Lock the team rules early
Verify signed scopes, budget ownership, change-order rules, and a reporting cadence before any major spend. Those four items tell each consultant and contractor who decides, who pays, and how overruns get flagged. If it is not in writing, it is not launch ready.
Keep property manager plus sales and leasing roles staged for Month 13, unless the deal needs them sooner. That sequencing keeps payroll tight while the build is still moving, and it avoids hiring too early for space that is not yet ready to lease or sell.
5
Sales, Leasing, And Exit Path
Exit Path Ready Before Closing
Lenders get more comfortable when the exit is real before you buy the site. For this business, that means proving buyer demand, tenant demand, and broker interest before the first shovel hits dirt, not after the building is done. All property sales are planned in Month 60, so the model needs evidence that the project can reach rent, occupancy, and sale targets on that timetable.
The weak spot is finishing on time but missing the market. If absorption, or how fast space leases or sells, is slower than assumed, cash sits in the asset and carry costs keep running. Modeled monthly rental fees of $65k to $125k only work if preleasing, presales, and disposition planning are credible from day one.
Verify Demand Signals Early
Before acquisition, line up market proof for rent, occupancy, sales price, and absorption pace. Use broker feedback, comp data, and written preleasing or presale interest to test the exit path. If the data do not support the hold or sale case, the project is not launch-ready yet.
Document tenant demand by submarket
Track buyer interest and price comps
Stress test monthly absorption assumptions
Assign a broker for each exit
Keep disposition timing in the model
That sequence protects opening timing because it reduces the risk of building something that is technically complete but still not financeable, leasable, or sellable. The real readiness signal is market evidence, not hope.
