10 Essential Questions to Ask a Real Estate Developer Before You Invest

Investing in real estate — especially in markets like the United States — can be highly rewarding, but it also requires diligence, clarity, and deep understanding. When you’re considering a partnership with a developer, asking the right questions upfront can protect your capital, clarify expectations, and help you avoid costly surprises down the road.

Below are the ten critical questions every serious investor should ask before signing an investment agreement.

1. What is the exact process for securing building permits?

Regulatory approvals are one of the first and most important steps in any development project. A seasoned developer should be able to clearly explain all required stages — from initial application to final building permits — including timelines, responsible authorities, potential delays, and expected costs.

2. Can you provide a detailed breakdown of project costs?

Transparency in costs is fundamental to evaluating the true economics of a project. Ask the developer for a full line-item breakdown: land acquisition, design and engineering, permitting, construction, marketing, financing, and contingency reserves. Reliable projections should be based on actual bids from reputable contractors and vendors.

3. What sales or exit projections are these based on?

Understanding the assumptions behind pricing and sales forecasts is essential. A professional developer will share detailed market analysis, including comparable sales data, local pricing trends, and both conservative and optimistic scenarios — all of which affect expected investor returns.

4. What relevant experience does the developer have?

Track record matters. Ask for specific examples of similar projects the developer has completed — including size, type, location, and financial results. Request references from past investors and evidence of execution under different market conditions.

5. What warranties and insurance protections are in place?

A strong risk-management framework is a hallmark of responsible development. Ask about professional liability insurance, builder’s risk insurance, completion guarantees, refund provisions, and any escrow or trustee arrangements that protect investor funds. Requirements can vary by state, so a developer familiar with the local regulatory environment should address these specifics.

6. Who are the key project partners and what are their credentials?

Successful real estate development depends on experienced professionals beyond the lead developer — including architects, general contractors, attorneys, accountants, and specialist consultants. Request details about each partner’s background, reputation, and track record.

7. How will communication and reporting be handled?

Clear, consistent updates are vital — particularly for international or passive investors. Ask for details about reporting frequency, formats, and channels: monthly progress reports with site photos, quarterly budget and schedule updates, and real-time alerts should be standard.

8. What is the sales and marketing strategy?

The developer’s approach to marketing and sales can significantly influence how quickly properties sell and at what prices. A strong strategy will include in-depth market research, collaboration with experienced local brokers, digital and traditional advertising plans, and clear target buyer profiles.

9. What happens in case of challenges or delays?

Every project encounters obstacles — regulatory shifts, supply chain issues, budget overruns, or market slowdowns. Investors should understand the contingency plans in place: how risks will be mitigated, what resources are available, and how investor interests are protected when timelines or costs change.

10. Why do these questions matter?

A developer who welcomes these questions is usually one who values transparency and investor partnership. Informed, engaged investors protect their capital and align themselves with developers who see investors as long-term collaborators rather than mere sources of capital.

Partner with Liberkey for Clarity and Confidence

At Liberkey, we believe in rigorous due diligence, open communication, and structured transparency in every project. Asking the right questions isn’t just smart — it’s essential to building a secure, profitable real estate investment strategy. Let us help you invest with confidence.