In this current market where demand for good contractors is very high; it is very common for responsibility lines to be blurred, which unfortunately ultimately negatively impacts the customer, and impacts the project delivery. Just because you can eat the whole box of donuts, doesn’t mean you should!
It is very common for Builders (General Contractors) to think “Well, I build houses or buildings, so I can most certainly develop a piece of land. Unfortunately, the skill set required to build a house/building is completely different from what it takes to actually develop the land, and manage the overall project.
The most common error we see in this market, where there is such a high demand for quality contractors, is Builders/General Contractors acting like developers without the wisdom and or know-how to successfully deliver the project for their customers.
Typically, your Developer is the person who does the Feasibility Study and or your mock project performance before you hire your general contractor, develops your Civil Engineering plans, develops the HOA/CMA guidelines including mock budgets, provides weekly reporting to the customer, and really manages the overall successful delivery of the project.
The best cliff-notes description of this role is this is the person that provides the opportunity for the Builder/General Contractor to just BUILD and ensure that the Owner/Investor can actually host a project that performs. You gotta remember, the builder doesn’t care if the building is a success for the owner/project/investor, so long as his fees are being paid. We have all heard it “I just built what was on the plans”…
Example: A Neighborhood without a developer would just be a bunch of land with no infrastructure or individual lots. How would the Investor/Owner know how to cost-effectively layout and build the community to ensure it was a thoughtful project and the investors would be in a good spot? What will the city think? What site specific items are needed to ensure that there are no stormwater violations? That’s not the builder, that’s the developer. How do you know you’re not just paying a Builder/General Contractor for a project which might not perform?
As a common theme of all of our posts, we encourage our customers to make data driven decisions to ensure their projects are successfully delivered. Unless you are building a single family residence on an existing piece of land, hire yourself a good developer that can provide you representation through the entire project process!