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Making It in Real Estate: Starting Out as a Developer
What does it take to be a successful real estate developer? Author John McNellis tells you, sharing practical tips and advice from his wealth of experience gained over 35 years in real estate development. Offering humorous insights, the book covers the ins and outs of how to get financing; how to work with architects, brokers, and other professionals; and how to make a good deal and win approval for your project. Making It in Real Starting Out as a Developer , First Edition, has ranked among the top 20 real estate books for four consecutive years, winning hundreds of 5-star reviews.
- GenresBusiness
104 pages, Paperback
First published December 1, 2016
107 people are currently reading
292 people want to read
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Displaying 1 - 28 of 28 reviews
May 20, 2018
I've read John's column in the Registry off and on for a few years. I usually find his stuff entertaining and insightful... but this book just didn't do it for me. He uses SO many analogies to explain things that it gets really tiresome after a while. It's OK to just say things without making a witty comparison to something else. It felt almost gimmicky at times.
I also think that "starting out as a developer" is an inappropriate subtitle. This was not a book for someone who is just "starting out" in development. It presupposes a certain level of real estate knowledge that a beginner likely won't have. A more appropriate subtitle would be, "mistakes I've made and lessons I've learned". He focuses largely on how to avoid major pitfalls as a developer. I think he had some really good things to say and I appreciate some of the lessons he shared, I just wasn't a fan of the delivery.
I also think that "starting out as a developer" is an inappropriate subtitle. This was not a book for someone who is just "starting out" in development. It presupposes a certain level of real estate knowledge that a beginner likely won't have. A more appropriate subtitle would be, "mistakes I've made and lessons I've learned". He focuses largely on how to avoid major pitfalls as a developer. I think he had some really good things to say and I appreciate some of the lessons he shared, I just wasn't a fan of the delivery.
October 30, 2020
Fun book on getting into real estate development. Simple and to the point. Worth your time if interested in getting started in real estate
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April 6, 2022Turning Gordon Gekko’s aphorism on its head, greed is not good enough.
as long as you’re working and your capital isn’t—you will always be working.
In baseball, the difference between a single and a home run is how hard you swing the bat; in real estate, it’s how much leverage you use.
if you don’t specialize, your specialty will be failure.
To paraphrase Warren Buffett, I’d rather be a mediocre developer in a brilliant city than a brilliant developer in Lancaster, California. My advice? If you’re stuck in my hometown or any other city with Lancaster’s dim prospects, move.
If a broker had a listing on land in Chernobyl, she would gladly share her commission with you
remember this: disclose everything except your bottom line. While “You get in enough trouble being honest” is a great moral north star, one can suffer from being if not too honest, then at least too forthcoming.
the long-term-investor approach is to avoid spec projects
compelling need to sell (e.g., death, divorce, dissolution, or disaster)
The best time to find a motivated and realistic seller is when no one else is buying. “Buy when there’s blood in the streets” is the timeless adage.
buying into disaster requires not only a cast-iron stomach and a prophet’s certainty of the future
stick with it like a farmer with his annual plantings
it’s critical to have the discipline to sit it out when prices make no sense to you.
Even if he’s tighter than a clam
back to the IRR—the calculation that sank a thousand ships
The Internal Revenue Service (IRS) has decreed that 39 and a half years is the standard useful life for buildings, and it allows a 2.5 percent deduction for depreciation every year.
Your children can either scrape your worn-out building and start fresh or go the more expensive route of gutting and rebuilding it. Either way, all you have left is your residual land value. your land appreciation should more than offset your building loss.
the math is simple: if you are spending $100,000 a year in legal fees and your lawyer is making $200,000 at her firm, it would be crazy to hire her
It does you no good to hire the fanciest firm in town if a junior associate is assigned your work.
While capital is seldom a great listener—money talks
Almost everyone starts with family and friends’ money (F&F). Also known as country club money
The F&F profit-sharing formula hasn’t changed since the dawn of capitalism: from the project’s cash flow, the equity gets a preferred return a few percentage points higher than Treasury bills (say about 5 percentage points) and, once that’s paid, any remaining cash is split 50/50 between money and developer. If the project entails less work, risk, or return than a groundup development—such as a simple lease-up on an empty building—then the split might be 80 to the equity, 20 to the developer. When the project is sold or refinanced, the proceeds are first used to bring the preferred return current and then to repay the equity in full. And then any remaining proceeds are divided 50/50 (or 80/20 in the simpler deals).
Through the unholy miracle of compound interest.
You are using Other People’s Money (OPM) for your equity, all of which carries a much higher coupon rate than bank debt. The banks are in the 2 to 4 percent range; OPM costs anywhere from 5 to 12 percent
as long as you’re working and your capital isn’t—you will always be working.
In baseball, the difference between a single and a home run is how hard you swing the bat; in real estate, it’s how much leverage you use.
if you don’t specialize, your specialty will be failure.
To paraphrase Warren Buffett, I’d rather be a mediocre developer in a brilliant city than a brilliant developer in Lancaster, California. My advice? If you’re stuck in my hometown or any other city with Lancaster’s dim prospects, move.
If a broker had a listing on land in Chernobyl, she would gladly share her commission with you
remember this: disclose everything except your bottom line. While “You get in enough trouble being honest” is a great moral north star, one can suffer from being if not too honest, then at least too forthcoming.
the long-term-investor approach is to avoid spec projects
compelling need to sell (e.g., death, divorce, dissolution, or disaster)
The best time to find a motivated and realistic seller is when no one else is buying. “Buy when there’s blood in the streets” is the timeless adage.
buying into disaster requires not only a cast-iron stomach and a prophet’s certainty of the future
stick with it like a farmer with his annual plantings
it’s critical to have the discipline to sit it out when prices make no sense to you.
Even if he’s tighter than a clam
back to the IRR—the calculation that sank a thousand ships
The Internal Revenue Service (IRS) has decreed that 39 and a half years is the standard useful life for buildings, and it allows a 2.5 percent deduction for depreciation every year.
Your children can either scrape your worn-out building and start fresh or go the more expensive route of gutting and rebuilding it. Either way, all you have left is your residual land value. your land appreciation should more than offset your building loss.
the math is simple: if you are spending $100,000 a year in legal fees and your lawyer is making $200,000 at her firm, it would be crazy to hire her
It does you no good to hire the fanciest firm in town if a junior associate is assigned your work.
While capital is seldom a great listener—money talks
Almost everyone starts with family and friends’ money (F&F). Also known as country club money
The F&F profit-sharing formula hasn’t changed since the dawn of capitalism: from the project’s cash flow, the equity gets a preferred return a few percentage points higher than Treasury bills (say about 5 percentage points) and, once that’s paid, any remaining cash is split 50/50 between money and developer. If the project entails less work, risk, or return than a groundup development—such as a simple lease-up on an empty building—then the split might be 80 to the equity, 20 to the developer. When the project is sold or refinanced, the proceeds are first used to bring the preferred return current and then to repay the equity in full. And then any remaining proceeds are divided 50/50 (or 80/20 in the simpler deals).
Through the unholy miracle of compound interest.
You are using Other People’s Money (OPM) for your equity, all of which carries a much higher coupon rate than bank debt. The banks are in the 2 to 4 percent range; OPM costs anywhere from 5 to 12 percent
May 28, 2018
Nice practical wisdom
This isn’t a how to book. If you want a how to book, get something from Urban Land Institute. This is a book full of wisdom from a guy that’s been in the trenches. Really nice, interesting content
This isn’t a how to book. If you want a how to book, get something from Urban Land Institute. This is a book full of wisdom from a guy that’s been in the trenches. Really nice, interesting content
May 11, 2025
I am an experienced architect - ARB, RIBA (including heritage/conservation) & project manager, with an MBA (Finance & Private Equity).
I am finding this book particularly useful for my foray into property development for an international project.
I am using the book as a road map & guide.
It simplifies complex terms, is practical and full of common sense and advice, all due to John’s decades of hard-earned and successful experience. For example: John’s view on IRR (as good as forecasting the weather on a set day, 10 years in the future) and the need for the project to make business sense on the back of a napkin!
While the book is written with John’s unique American style humour, it discusses and advises on serious topics that are not to be taken lightly.
I am based in Europe (Ireland) & UK (London); hence some terms are new to me, but the underlying principles remain the same. There is a glossary at the end, with financial examples, which help in understanding the concepts.
I bought my 2nd edition of “Making It in Real Estate – Starting Out as a Developer” copy via the Urban Land Institute's (Americas) link to ipgbook.com, as I wanted an EPUB format to make my notes, highlights, etc. Amazon has the Kindle version plus its available from other American Book Sellers.
I am finding this book particularly useful for my foray into property development for an international project.
I am using the book as a road map & guide.
It simplifies complex terms, is practical and full of common sense and advice, all due to John’s decades of hard-earned and successful experience. For example: John’s view on IRR (as good as forecasting the weather on a set day, 10 years in the future) and the need for the project to make business sense on the back of a napkin!
While the book is written with John’s unique American style humour, it discusses and advises on serious topics that are not to be taken lightly.
I am based in Europe (Ireland) & UK (London); hence some terms are new to me, but the underlying principles remain the same. There is a glossary at the end, with financial examples, which help in understanding the concepts.
I bought my 2nd edition of “Making It in Real Estate – Starting Out as a Developer” copy via the Urban Land Institute's (Americas) link to ipgbook.com, as I wanted an EPUB format to make my notes, highlights, etc. Amazon has the Kindle version plus its available from other American Book Sellers.
September 19, 2017
Smart People learn from their mistakes and highly intelligent people learn from other people's mistakes. Be intelligent and take John's advice to heart.
For Anyone wanting to go into Real Estate Development or a career in Real Estate, this is a must read. John McNellis takes you thru his history of a career in Real Estate from Apartment owner to specialized Retail developer. My only wish, was that he would elaborate more on some of his lessons.
Trying to be direct and to the point, John does a good job of keeping people entertained and educating the reader at the same time. This is a very quick read that will touch on a lot of aspects in the RE development business and provide plenty of discussion points. John's goal is to help out future developers and I think there will be a few people that owe him credit (and $$) in a few years......thanks John and good luck future developers.
For Anyone wanting to go into Real Estate Development or a career in Real Estate, this is a must read. John McNellis takes you thru his history of a career in Real Estate from Apartment owner to specialized Retail developer. My only wish, was that he would elaborate more on some of his lessons.
Trying to be direct and to the point, John does a good job of keeping people entertained and educating the reader at the same time. This is a very quick read that will touch on a lot of aspects in the RE development business and provide plenty of discussion points. John's goal is to help out future developers and I think there will be a few people that owe him credit (and $$) in a few years......thanks John and good luck future developers.
December 18, 2020
A pretty brief but digestible and useful collection of writings by an experienced real estate developer. Finding books, or even words of actionable advice, on this profession can be hard, and I'd recommend this book to anyone interested in real estate. The $20 price tag for a physical copy is very steep, but there are ebook editions that are only $10 (much more reasonable for the book length). The second edition is also much longer than the first and contains a glossary of real estate lingo that is very useful. McNellis is a talented writer and makes a typically dry topic engaging and humorous.
May 18, 2020
Great book
I founded our commercial brokerage nearly 40 years ago. I have taught the napkin approach and working backward for value as a mere math problem.
I couldn’t put the book down.
I’m going to buy copies for all our brokers. It is filled with real wisdom and whit.
A terrific read!
I founded our commercial brokerage nearly 40 years ago. I have taught the napkin approach and working backward for value as a mere math problem.
I couldn’t put the book down.
I’m going to buy copies for all our brokers. It is filled with real wisdom and whit.
A terrific read!
June 18, 2021
This is a must read book for aspiring real estate developer
Great stories and examples of the author’s experiences on his journey as a developer. I recommend this book to any one who want to be a real estate developer or who is currently on the real estate development industry . It deserves the five stars rating.
Great stories and examples of the author’s experiences on his journey as a developer. I recommend this book to any one who want to be a real estate developer or who is currently on the real estate development industry . It deserves the five stars rating.
July 31, 2024
This is a concise and thoughtful introduction to a practitioner’s thoughts on real estate development.
It's free of the get-rich-quick ethos that seems to pervade most introductory books in its category and full of insightful tips, guidelines, and cautionary notes. I'd recommend it to anyone considering becoming involved in real estate development.
It's free of the get-rich-quick ethos that seems to pervade most introductory books in its category and full of insightful tips, guidelines, and cautionary notes. I'd recommend it to anyone considering becoming involved in real estate development.
July 20, 2018
Great book for young developers! A lot of these valuable lessons I have learned them the hard way by making mistakes. There’s a lot of time, money and resources you can save just learning to follow advice given by experienced colleagues.
May 3, 2020
Business wisdom not limited to real estate
Mcnellis has a way of understanding things with a clarity not common in your typical business book, and a clever delivery seen even less frequently.
Mcnellis has a way of understanding things with a clarity not common in your typical business book, and a clever delivery seen even less frequently.
May 15, 2017
Decent Insight. I was expecting more of a step by step guide. Nevertheless, the author shares his experiences and wisdom which is priceless.
January 26, 2018
Solid, practical and funny advice from experienced and noteworthy mentors. A lot of filler to complete an entire book with some key hooks, and moments of clarity and memorable advice.
May 7, 2019
Simple and staring to the point. I found the book useful.
May 13, 2019
This is a good book for beginners looking for a high level overview. I was hoping for more a deeper dive into development.
September 19, 2019
Great for the beginning developer
This book helped me get the inside scoop of what to expect starting out as a young developer. I truly appreciate the truth and real delivery!
This book helped me get the inside scoop of what to expect starting out as a young developer. I truly appreciate the truth and real delivery!
January 11, 2020
A quick read, and pleasant enough, but it confirms that the mindset of the developer (at least the one writing this book) is one I don't share.
March 15, 2020
It was witty which was nice. However It was not a beginner's guide which is what I thought it was going to be. Nonetheless the author expresses his lessons learned and provided several insights.
July 15, 2020
This book is truly an honest take on becoming a real estate developer. I wish I would have read it 4 years ago before jumping into this seemingly esoteric field of real estate.
March 31, 2021
Terrific primer in the trials and tribulations of a real estate developer.
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January 3, 2022Being new in real estate, I appreciate McNellis writing. It was an easy read with many digestible statements to guide a newbie through the property jargon other writers are fondly of.
February 19, 2024
First half was excellent, second half was lots of fluff.
December 31, 2024
An interesting overview of the real estate development process. Practical, no nonsense & comprehensive.
March 20, 2025
Excellent read. Short, concise chapters with no unneeded fluff. Relevant to all areas of real estate + investment, not just development. Highly suggest to those interested in RE.
January 21, 2021
Great book that cuts the fluff and provides tips for many aspects of real estate development.
In terms of real life application, I read this book while working for a former employer (in real estate dev.), and I could relate many of the common mistakes this book talks about to mistakes my former employer was making. Said former employer is now in very choppy waters and is at risk of going belly up.
In terms of real life application, I read this book while working for a former employer (in real estate dev.), and I could relate many of the common mistakes this book talks about to mistakes my former employer was making. Said former employer is now in very choppy waters and is at risk of going belly up.
March 2, 2017
Insightful honest read
Great care was taking with crafting this book. It was an easy read -- I have a new born and sixteen month at home. I barely have time to blink, but the is worth it.
Great care was taking with crafting this book. It was an easy read -- I have a new born and sixteen month at home. I barely have time to blink, but the is worth it.
January 29, 2020
I read this in a single sitting and that doesn't happen very often. Granted, it's a short read (90 pages or so), he's a good writer and keeps you entertained throughout. He's a funny guy and it comes out in the book. Each chapter is about three pages so you run through new topics without really thinking about it.
Displaying 1 - 28 of 28 reviews