Most real estate investors are trained to look for cash flow.
They buy rental properties or stabilized deals because they want steady income and mailbox money.
Ground-up development works differently.
The investor may put money into a deal that pays nothing for several years. That does not mean the investment is not creating value.
The difference is that development creates the income stream from scratch.
In a stabilized deal, investors are buying cash flow that someone else has already created. They are paying for an asset that already produces income.
In a development deal, the investor is helping create that income stream.
The profit comes from the difference between what it costs to create the asset and what the asset is worth once it exists.
That means the value can be created long before the cash flow starts.
Would you be comfortable investing in a deal that creates value for years before it starts paying cash flow?