Real Estate Development - Fill In The Blanks

[Zach Stanard]

I am trying to get a clearer shorthand of real estate development.

For the purposes of this discussion, imagine there is a parcel of land that a developer sees as potential for a housing tract. The developer has also obtained permits from the city and county as needed, as well as the approval of local residents and has had all the requisite surveys for drainage and flooding, and whatever other concerns that a developer and the community would have. The land is either already paid-for or the developer has financing of some kind. Also, in our scenario, the developer is only concentrated on development and is outsourcing everything else to a builder who has their own architects and designers. This also goes for engineering firms who do roads and streets, as well as access, etc...

Would the developer be responsible for bringing utilities to the site?

What about either paving or staking out the streets and access ways to the site? (Again, the developer would be outsourcing this.)

Street lights, street signs?

Sewers?

Most of all, how does a developer make money in the case of a ground-up fresh development project? Obviously, the developer has the vision for the land, owns the land initially. But in the case of a housing tract as in our example, does the developer make money on the sales of the individual homes? Because when the project is finished, the once-single parcel of land is now many individual lots with homes. And if there is a separate builder involved (not part of the development company) how do they make money since they're building on someone else's land? 

I apologize for the ignorance. 

Thanks! 

[Nik Moushon]

The developer is responsible for pretty much everything. The city might chip in and help with some stuff if there is a significant benefit to them or if it is part of some grant funding or whatnot but 99% of the time the developer foots the bill. This is why development is not the easiest thing to do. A lot of up front costs before you even get to building the buildings.