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Professional vs Amateur Property Development

Rossie Wang
By Rossie Wang |New York, NY

The real estate landscape is changing. Thirty years ago, in the pre-internet age, real estate was a relatively simple thing. Today, however, we witness a very different scene. According to Adam Hochfelder, an established real estate executive and current Managing Director of Real Estate Acquisitions & Development at Merchants Hospitality, the role of real estate has changed fundamentally in the last three decades. Some changes turned out to be positive, others less so, but at least one thing is sure, these changes made the real estate game more dynamic than ever.

The idea of buying a house, doing it up and selling it for a huge profit sounds pretty awesome, but sadly it’s not as easy as it appears. As an amateur, it can be very easy to underestimate the cost of the build and the time it will take to complete, Hochfelder says.

If you are considering developing a property as a way of making money, you need to consider a number of factors. We asked real estate executive Adam Hochfelder to answer a few questions from his perspective. Here he outlines the worst mistakes made by amateur developers, and how they can be avoided. He also says that it is hard to become a real estate professional

Investing in the Wrong Area

Buying in the wrong area is probably the most common error among wannabe developers, states Mr. Hochfelder. Most amateur developers think it’s easier to find an opportunity than it actually is convinced it will be the next up-and-coming area, they often end up investing in the wrong area where a very few people would want to move.

Compromise on quality

As tempting it is to buy the cheapest of everything, Adam strongly advises you not to do that. Sure, there are faux, cheaper versions of most of the things used in high-priced developments, but copying other developers’ work at a lower standard is simply unacceptable. Today’s clients and knowledgeable and savvy, which means potential buyers will notice the difference the second they walk in. Always choose appliances, fixtures, and fittings that you know they will last, even if you’re working on a tight budget. Learn more about the best real estate markets in the United States.

Exaggerating

For Mr. Hochfelder, going overboard is equally unforgivable. Most buyers are in fact put off by those lavish marble bathrooms with crystal taps and silk carpets. So, instead of anything too fancy, keep your feet on the ground and go for a clean, fresh finish.

Rushing in

Eager to make a quick buck, amateurs often start work without proper plans or even permission. The more you plan, the more cost and time efficient the project, adds Hochfelder. So, make sure you have all the necessary paperwork before you start working because the last thing you want is having problems once you’re ready to sell.

Rossie Wang
Rossie Wang |New York, NY
Rossie Wang is a former Real Estate agent turned to analyst and blogger. In her honest personal opinion, London - and not New York is the first stop for the richest people in the world, looking it from the real estate lens. She was real estate agent who worked only with the richest. On her list, for example, there were some high-profile luxurious houses from $14 million in the wealthy London suburb of Hampstead. But, she says that while all that glamour turns all the heads, it is the most exhausting job in the world. Buyers, especially from the Middle East and Russia, are coming in bigger and bigger numbers, and their wallets hunger for new opportunities and new investors. Wang is young and ambitious. She feels the spirit of the times and always strives to be one step ahead in her work. This is primarily why she moved away from real estate and started blogging. In her first year of work she helped the firm's customers make the best decisions when choosing their future place of residence (house, apartment, etc.) in New York. Her high professionalism, coordinated work with her team, gave her competitive advantage and helped her maintain an adequate level of quality of services.

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