Frustrated Watching Developers Do Ideas I Couldn't Afford

[Landon Elscott]

Currently, I'm 26 years old, own my own home and also have a SFH my wife and I have been renting out since we bought it last year.

I can appreciate having patience, but latelyvIve been very frustrated about having ideas and watching others develop them because of a lack of cash.  I tend to have grand visions, and I suppose my time will come someday, but I just get so impatient when I see big developers come in and do something I had thought would be a good investment a couple years prior.

For instance, there is an old warehouse the city has been trying to sell for quite some time and theyve been trying to promote it as a business headquarters like it used to be...however I thought over the past couple years it would be better as apartments and lofts with ammenities that appeal to younger professionals.  I just learned today that a development firm is coming in with $7M and receiving huge tax incentives to develop into urban lofts...but instead they'll be subsidized for section 8.  That's not what I had in mind, and i fear it will further negatively impact our city.

I know I could never have $7M, but God I hate watching this company come and profit from an idea I've been thinking of for years...only to do it in a way that hurts the community demographic wise.

So, what is a young and ambitious person to do?  Do I wait it out and grow my wealth slowly until I can afford to do my own revitalization projects or are there avenues in central Iowa for investors like me to find people who can see my ideas through as a partnership and also provide me some equity despite my lack of money?

[Bryan Hancock]

@Jon Klaus 

People often want to try to climb too many rungs on the ladder at once.  The way that successful developers get started is to start small, skin their knee on easier deals, and move up the food chain.  There are plenty of people out there that come out of business school with knowledge of spreadsheets and academic models and have zero clue about what it takes to do deals in the real world.  

One of the main things successful developers need to be able to do is to raise money.  Most of the elephant chasers think that this is easy and that they just need to find one big capital partner to make it happen.  What they fail to realize is that the big capital partners don't need them and they are trying to avoid newbies.  You have to hustle to find money and to learn the development code.  From there you can do bigger deals and move up the food chain.

Another major constraint is getting banks to lend to you.  Asking a bank to lend on a project where you're the guarantor and the size of the loan is many times the size of your balance sheet is likely an exercise in futility.  Capital simply won't be attracted to you in these cases because it is too risky.  The investors - be they online crowdfunding investors, lenders, private lenders, or whatever - aren't going to risk their hard-earned capital on you when there are better risk-adjust opportunities elsewhere.  

Hold your head up before you crawl.  Crawl before you walk.  Walk before you run.  Run before you sprint.  These are simply concepts, but most people aren't willing to do the work to make them happen.  I know this first-hand.  When I first joined BP I ran a legitimate coaching company called The Entrepreneur's Incubator.  I only took dough on the back end of deals for people that were serious about investing.  You know what I found?  Surprise!  I found that 95% of the people that claimed they wanted to learn to invest really wanted the cash to wash all over them and to complain about how hard it was.  We promptly shut the company down and I started a business with my best student @John Blackman .  John and I have already done millions of dollars of deals together and will probably exit 30 or more projects next year.  

So get off your a$$ and go make it happen.  Start small, build a demonstrable track record, and THEN grow to the next level.  Earn the trust and respect of your investors and lenders.  Rome wasn't built in a day.