Purchasing Resources for Real Estate Development

Real Estate Development Key Terms

Learn the terminology of real estate development before you build
By Shannon Tani If you're just getting started in the field of real estate development, you're probably aware that there are a number of new terms you need to learn to be successful. When you understand words like debt to equity ratio, community development and zoning, you'll have a better idea of how much property you can afford to buy and what you can do with it. In commercial real estate development, misunderstandings can be costly, so make sure you learn the terms.

Association of Commercial Real Estate (ACRE)

The Association of Commercial Real Estate, or ACRE, is a professional organization for those in the commercial real estate business, including developers. It offers a good opportunity to network and learn the latest trends.
Try:  Read the history of the Association of Commercial Real Estate from their website.

Community revitalization

When cities and towns have a depressed economy, the effects can be felt by everyone living there. Community revitalization projects can help turn a city around, restoring it to its former glory.
Try:  The Surdna Foundation specializes in community revitalization.

Community development

Community development refers to the process of making a particular area nicer, especially for low to middle income families. Development companies that focus on community development may be eligible for funding from the government.
Try:  The State of New York Banking Department defines community development.

Debt to equity ratio

The debt to equity ratio is a comparison of how much debt you have with the amount of equity you have in a property. A high debt to equity ratio means that you'll have a harder time getting a mortgage with a good rate.
Try:  Learn more about the debt to equity ratio and how to calculate your own from American Express.

Zoning

Zoning affects what you can do with a property. The zoning regulations are set by the city government. For example, you may not be able to establish a residential home in a commercial zone.
Try:  The City of Portland, Oregon explains some of the different types of zoning areas.

Market assessment

Before you start making plans for a development project, it's important to make a market assessment of the area. For example, knowing the average age of local residents will help you decide whether you're marketing towards young families or senior citizens.
Try:  Senior Housing Companies details their process of market assessment.

---