Master-planned communities have been a great investment vehicle for the past few decades because they allow developers to meet the needs of specific emerging demographics while delivering a steady return to investors. While they are attractive to many, they are also a specialized enough field that some investors who have an interest in participating in the market don’t have a line in to actually put their money to work. When it comes to real estate investment, there are basically two ways to do it. Either you self-fund because you’ve got a deep cash reserve from other successful investments, or you group with people who are like yourself and work with a developer. The latter is by far the more common method, but how do you find an organization that builds these communities?
It turns out, you can look for them on social media. Not only are the organizations there, the founders often have a presence, like Roger O’steen PARC Group, which has been transforming northern Florida with planned communities for decades. These groups are not always seeking new participants, though. The question then becomes, how do you find the ones who are?
Identifying Industry Growth Trends
The development groups most likely to be looking for financing for new projects are the ones that serve the highest demand for growth in your area. It can take some time and leg work to identify them, because sometimes it’s apartment planning, sometimes it’s condos or over 55 communities, and sometimes it’s just regular suburban housing with local amenities like a public pool and fitness center on site. If you’re in Florida, it’s easier to find those growth areas because you’ll see the marketing. Outside the area, you might find the industry advertises less directly to the customer, but not always.
Another way to find investment groups for this opportunity is by looking for new developers. The newer the real estate planning firm, the more likely they are going to be to need investors in order to get the job done. Established planning groups like the one Roger O’steen Jacksonville founded might also put out a call for investors or for brokers who can bring them investors when they have projects. This brings us to the final method of finding your way into the industry. Find yourself an investment broker who matches people like you to developers looking for groups of investors as silent partners.
These brokers are easy to find if you look, because it’s their job to be easy to find. They function as middlemen, and in this case that’s an extremely good thing, because it facilitates access. Know that if you go this route to break into investing, you’re likely to wind up paying for it with commissions that you’ll need to take into account when calculating your return and your tax information. You’ll also probably have more access faster, so if you use the opportunity correctly the extra cost can be more than worthwhile.
Defy Expectations, Your Customers Do
If you’re looking to break into your first planning venture as the mastermind on a planned community, remember to look at what people actually want, not what the industry tries to convince you they want. The facts on the ground can look very different depending on your area, and some demographics are growing out of short-lived trends that were once viewed as major changes to the industry.
- Check out what people seeking family housing are doing in your city
- Look at the national trends and identify what is happening in communities who recently had the outlook yours does now
- Take advantage of current demand while paying attention for shifting opportunities
Remember, if you’re going to plan communities as a project leader, you’re going to need to think about your next project’s needs while you’re working on the current one. The market moves too fast to do otherwise.
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