Advice wanted for transition from engineer to developer

[Zack Tomlin]

Hello all. I came across this forum while researching the REDI Foundation as well as ULI and NAIOP courses and was impressed by the responsiveness and knowledge of the contributors. 

I'm 31 years old and a licensed professional engineer in 30+ states. My area of expertise is plumbing, mechanical and electrical (PME) engineering for commercial and multifamily projects. I've worked as a PME engineer for 10+ years now. 4 years ago I started my own engineering firm. That firm is now 12 people and we've completed 500+ projects. During this time I've formed relationships with architects, contractors, city officials, and have crossed paths with many developers. Along the way I've gained some familiarity with the role each plays in the development process and had much practice in communicating with a broad range of professionals and personalities. 

As time goes on I'm becoming more and more intrigued by real estate development. I also realize more and more that I like the challenge of, and tend to succeed at running complicated projects. Given my experience and education in engineering, which in addition to the technical work includes significant project management, organization/systems/process development, and dealing with bureaucracies, I'm hopeful I've got a good start on the skills necessary to be successful in real estate.

Problem is there is so much I know I don't know and even more than I don't know I don't know. I'd be grateful for any advice you all have on the best way to learn more and/or how to pivot from being a role player in the development of projects to leading them.

Please keep in mind that I  do currently have a full time job in running my engineering firm and that while the success of the last few years has come with some financial reward I'm by no means in a position to bankroll projects on my own.

Thank you.

[Bryan Hancock]

Running a development project is not for the faint of heart.  I would suggest you try to find a fee developer you can partner with on your first project or find someone you can co-develop/syndicate with that has the ability to raise money.  For the latter scenario you're going to need to have some money to place to get anyone interested in all likelihood.  To give you more guidance people would need to know more about your personal situation and financial capacity.  

In general real estate development is hard.  Dealing with the city, quarterbacking many resources that are always late or over budget, dealing with uncertainty of what you'll find during construction, raising money and keeping the investors happy throughout the process, etc.  are all challenging.  Any one poor resource on your team can spoil your relationship with your investors.  As you scale resources that used to work no longer work because you've outgrown them.  Scaling any business is just plain hard.  

I'd also suggest you start small.  Visit with a handful of local lenders and get their pulse on what you can finance and what they'd be comfortable loaning on given your situation.  The banks are generally more conservative than the developers are so this should give you a good idea about how you'd finance much of the project and realistically where you are.  Again, a lot depends on your financial situation.