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Understanding the Property Developers Mindset with Justin Gehde – Ep. 030

About the Guest

I am really excited to share this next conversation with all of you. Justin is a real estate developer with Gehde and host of the Property Developer Podcast located in Melbourne, Australia. Justin brings with him almost five years of experience in the real estate development industry. He has been sharing his discussions with other developers on the Property Developer podcast for over four years now.

Originally started in 2015, the Property Developer Podcast was created by Justin because he saw a gap in podcasts geared towards property development. In his hunger to learn about developing and find out how to become a really good developer, he was going out and talking to people involved in property developing. He loved listening to their stories, and they all had such different views on developing. He thought it would be so great to share this with people. He also found that sometimes being a developer can be a lonely game, your family or partner doesn’t necessarily understand what is involved or what you are working on, and most people have a pre-conceived idea of what property developers are like. Hence, the genesis of the Property Developer Podcast.

In this episode, we are going to discuss some of the greatest lessons learned he has heard on his show, how he got started in real estate development himself, and the path to understanding the mindset of real estate developers. As you will hear on the show, he brings tons of experience on the subject of real estate development and the various hardships that real estate developers see today. I think you will enjoy his take on real estate development after speaking with over 70 guests on his own podcast.

Main Take-Away’s From This Show

It’s always nice to have a fellow podcaster on the show! Justin did not disappoint. His passion for real estate development was evident when discussing his own podcast as well as the projects he is undertaking right now. With over 70 of his own guest interviews under his belt, he has been able to draw on the wisdom of these guests when pursuing his personal property development projects. From our discussion, I was able to pull out some big take-away’s or nuggets of knowledge to pass on to you all. The following list is not an exhaustive one, but it highlights the major points gathered.  As you will see after jumping into the topics listed below, the central theme of the property developer’s mindset is inherent in all of these topics.

  1. Real Estate Development in its essence is the same no matter where you live on the globe.
  2. As a real estate developer, you are the conductor of the orchestra, not the violinist.
  3. You need equity to join the real estate development game, but it isn’t just a rich man’s game.

As always, I will dig into each of these “take-away’s” every week on the blog. So, without further a due, here we go!

Real Estate Development in its essence is the same no matter where you live on the globe.

It’s incredible to me that I can be talking to someone across the globe and be able to discuss common issues that we see in such a particular subject as real estate development. We were able to do just that though. Justin develops property near Melbourne Australia, and I work on projects throughout Texas and yet we still run into similar roadblocks.

Justin put it very nicely when he said that property development is really just a process, a set of steps to follow. It doesn’t really matter where the project occurs, it will involve a set (sometimes seemingly infinite) number of steps. Although some of the particulars of financing, construction, and leasing are different, the overall process is largely the same no matter where you go in the world. They all contain the following steps in some shape or form:

  1. Market research
  2. Feasibility study and proforma modeling
  3. Land acquisition or options
  4. Survey and ESA’s
  5. Site Layout
  6. Permitting & Entitlements
  7. Construction
  8. Close-out and Lease-up.

This is exciting because it means that you can literally develop property just about anywhere as long as you understand the rhythm of development and the processes that are necessary. It also means that there are clear milestones that can be met in the process which make the development much more digestible for those just getting started in property development.

As a real estate developer, you are the conductor of the orchestra, not the violinist.

Justin mentioned that he often has to think of himself as the conductor of the orchestra, not the cello player or the violinist, when working on his projects. I think this is an excellent point and one that can be hard for some to digest. If you are acting as the developer on a project, you will wear many hats along the way as discussed with Justin. Above all though, you must be thinking big picture and not get stuck in the weeds.

Each professional has a part in the overall project. Each one is extremely necessary in completing the project, but in order for the “orchestra” to come out like a well-played Symphony No.9, the conductor/developer must keep all of the consultants in rhythm. This can be tough to do as there are often many processes going on at once. However, it is your job to keep the show going as tempting as it might be to get stuck in the minutia of design.

You don’t necessarily have to know everything about all things in order for your project to run smoothly. However, you do need to know enough about everything to know when you need to ask questions and further investigate an issue with outside help. Your design professionals will respect you for being knowledgeable but also vulnerable enough to ask for guidance when your expertise don’t quite extend to the depths provided by the design professionals.

You need equity to join the real estate development game, but it isn’t just a rich man’s game.

This last take-away is one that I find extremely uplifting and inspiring. It’s very true that you do need some money to dive into real estate development, but you don’t necessarily need to be abundantly rich. There are many ways that you can get into real estate development without having millions in the bank. You could start out developing single-family residential lots which have a lower cost to entry. You could partner with others that have more experience and provide added sweat equity to make the deal work if you don’t have enough real equity to contribute significantly. You could start out with redevelopment of existing structures to potentially reduce construction costs.

There are many ways to begin your dive into real estate development. Just start doing research and asking questions if you are truly passionate about becoming a property developer and you believe you have the mindset needed to succeed. Many developers will gladly discuss with you how they got started, their first deal, and many other tips with you if you just ask the question.

As you can see from the take-aways above, this podcast episode was full of great information on the topic of the developer’s mindset and how it affects your next real estate development project. As always, if you have enjoyed the content and the show, please subscribe to the show below and share with your friends! We’ll have many more great discussions on the shows to come.

To Learn More About Justin Gehde and the Property Developer Podcast, Check out the Following Websites:

Resources Mentioned:

Recommended Reading Section

For more on mindset for your next Real Estate Development Deal, check out Episode 15, with Ben Stevens to give you more perspectives on the mindset of real estate development.

 

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