The Land or The Money

What's more important?

As a real estate developer, I often get asked the question: What is more important when it comes to putting a deal together, having the money or having the land?

It's a difficult question to answer as both factors are essential to any real estate development project.

However, in my experience,

Having the land is the more critical of the two.

Let me explain why.

When it comes to real estate development, the land is the foundation of the project. Without land, there is no project, and without a solid foundation, the project will crumble. That is why having the right piece of land in the right location is so crucial. It sets the stage for a successful project.

If you have the land, you can start working on the project even before you have all the financing in place. You can start the process of getting permits, design the project, and start lining up contractors and vendors. This gives you a head start on the project and puts you in a better position to secure financing.

On the other hand, if you have the money but no land, you're stuck waiting for the right opportunity to present itself. You might be tempted to invest in a less-than-ideal piece of land just to get a project started, which can lead to costly mistakes down the line. Additionally, you may end up overpaying for the land, eating into your project's profitability.

That being said, having the money is still essential. Even with the right piece of land, you still need the resources to finance the project, pay for permits, contractors, materials, and other costs associated with real estate development. It's a balancing act between having enough money to cover the costs and not overextending yourself financially.

To be successful in real estate development, you need to have a solid understanding of both sides of the equation. You need to have the financial resources to get the project off the ground and the right piece of land to build it on. However, in my opinion, having the land is the more critical of the two. With the right piece of land, you have the foundation for a successful project, and everything else will fall into place.