265 – Ken Van Liew – How To Get Into Real Estate Development

Synopsis

Ken is also known as the “King of Skyscrapers.” He has been married for 34 years and presently resides in the New York metropolitan area. Ken is proud to say that after 30 years in the real estate industry, he is now reaping the rewards of his hard work and is able to pay it forward by assisting others in becoming great real estate investors as well.

In this episode, Ken discusses how he became successful in the field of development, the hurdles he had along the way to being an expert in the area, and how we might follow in his footsteps.

Key points

Interest in Development

Ken’s interest in the development industry rose dramatically as his job history expanded. He has previously worked as a builder, superintendent, and project manager. He said that he was drawn to development because of the substantial fees that may be earned, such as charging 5% on a $10 million project. He received the added push to follow his passion one day while reading a book about syndication when he read that anybody may syndicate given the right opportunity and preparation.

First Project

His first construction project was a $17 million assisted living facility. He said that this project was the catalyst for everything for him since he discovered so much in the process. He thinks that learning about real estate does not have to be in a linear approach; instead, you might start in an area you’re familiar with, such as wholesale or fix and flip, and work your way up from there. He also said that you would ultimately achieve success with the proper belief system.

Finding a Location

When asked how he selects locations for his projects, Ken said they are gradually expanding beyond their present reach of eight to ten cities in Texas, North Carolina, New Jersey, and Florida. They are also now looking into opportunities in Connecticut.

Setting up a Team

If you want to engage in development, it is critical that you first put together your ideal team. There are several players in different areas in the country who you can approach, including persons in charge of the environment and transportation, civil engineers, soil specialists, and lawyers. You’ll act as an orchestrator, bringing these specialists together for your project.

Ken also emphasized the need to avoid putting all of your eggs in one basket, such as entrusting the job to a general contractor. If you are not going to build it yourself, you must have an open book policy with the construction management to see what the costs are and participate in the buyouts.

There is a bit more risk in development than in other areas of real estate, but there is also a lot more gain. You’ll get the best of both worlds with acquisitions, funding facilitation, and being a developer, which is a rewarding experience.

Prerequisites for Entering Development

First and foremost, you should be able to see the vision of what you want to create. It is also beneficial to assess where you are to identify areas where you can improve. Second, don’t be hesitant to try new things to discover the “flavor” that works best for you, whether it’s residential, self-storage, or something else. Ken thinks that the more specific you are about what you want, the more leverage you will have to attain that goal. Finally, third, seek a mentor. Your most expensive commodity is time. You don’t want to make the mistake of devoting 10 hours to figuring out something that an expert could teach you in an hour.

Financing a Development Deal

For example, they’re in a situation where they’re getting ready to finance their CVS project.  In this case, they want to take a chance and begin development as soon as they get approval at the end of the month. In most cases, there is an appeal procedure. During the appeal process, he could go to a private local bank that is more lenient and less institutionalized.

According to Ken, there are several ways to fund real estate development. You can contact various organizations around the country to help you with your funding requirements, including the New Jersey EDA and HUD.

Finding Funding Organizations

When he first started, he had no idea there was a whole municipal bond world where cities generate money via municipal bonds, which could subsequently be utilized for financing. Looking for funding organizations is a lot simpler in today’s world since you can discover nearly everything on Google. It’s just a matter of picking up the phone and talking to someone. There is a smaller margin for error in development, with many individuals involved, so it’s critical that when you’re able to connect with a funding organization, you’ll be in regular touch with these people to ensure everything is on track.

Challenges

Ken’s biggest challenge in real estate happened when he was working on a project in New York City, and the building began to lean. It ended up costing him roughly $2 million to fix, but fortunately, they were able to file an insurance claim. If things hadn’t worked out, it might have wreaked havoc on their project.

There were also occasions when the approval process did not go as planned, and they had to think quickly to come up with a solution. Ken’s advice, if you wish to pursue development in the future, you must realize that you need to constantly watch your back since you will be managing a large sum of money.

CVS Deal

On this deal, Ken bought a 28-acre property and then signed a CVS lease for a pad. He purchased the whole property, which included the renovation of a 100-year-old restaurant, a CVS pharmacy, affordable housing, and a medical office.

The approval process he’s presently going through is essentially to get the CVS to break ground. The project also requires a septic system, so he plans to open a residential septic system on site. For the larger development, he’ll put up a sanitary treatment plan on-site and get water across a highway, leading to the project’s second phase.

References

Books

You may get your hands on a copy of his book titled Modern Wealth Building Formula at programs.kenvanliew.com/modern-wealth-building-formula

More from our guest

• To get in touch with Ken, you can visit his website at www.kenvanliew.com. It’s easy to schedule an appointment; just click the “Discover How” button.
• In addition, you can get exclusive free training from Ken by visiting www.11millionairesecrets.com.