Some of the best real estate returns come from markets that most investors are not paying attention to yet.
By the time everyone agrees a neighborhood is great, the easy money is already gone.
In Episode 409 of The Build Up podcast, we sat down with Steve Kliegerman, President of Brown Harris Stevens Development Marketing, to talk about how new development works, how individual investors can participate in it, and where the opportunities are right now.
Here is what he wants every investor to understand.
What New Development Investing Actually Looks Like
Most people associate new development with buying a brand new condo at market price. But for investors who are paying attention, new development creates opportunities to buy earlier, at better prices, before a building sells out and before a neighborhood fully prices in.
Developers frequently offer early buyers preferred pricing in exchange for moving quickly and providing proof of concept for the project. If you have a relationship with the right people, and you understand the market the developer is betting on, you can get in at a price that reflects where the neighborhood is today, not where it will be in three to five years.
The key is knowing enough about the market to have conviction before the consensus catches up.
Why Investors Miss the Best Opportunities
One of the most consistent mistakes investors make is dismissing neighborhoods they consider secondary markets. A lot of investors missed Harlem. A lot missed Brooklyn when it still had tax abatements and prices had not yet run up. They were holding out for Manhattan and passed on deals that turned out to be some of the best in the city.
The investors who built the most wealth were the ones willing to be early in places that felt uncomfortable at the time. That discomfort is not a warning sign. It is often the signal that the opportunity is real.
A secondary market today is frequently a primary market in five to ten years. The question is whether you are willing to get there first.
How to Use Your Real Estate Career to Build Personal Wealth
One of the most underused advantages available to anyone working in or around real estate is proximity to opportunity. Brokers, agents, and marketing professionals often
know about projects before they are publicly available. The investors who take advantage of that are the ones who put their own capital into deals they believe in.
A practical approach that has worked well over time:
- Buy into projects you are already close to and have genuine conviction in
- Use tools like the 1031 exchange to roll gains into new properties without triggering capital gains tax each time
- Reinvest consistently over time rather than trying to time any single market perfectly
What the 1031 Exchange Is and Why It Matters
A 1031 exchange is one of the most powerful tools available to real estate investors. It allows you to sell an investment property and roll the proceeds into a new one without paying capital gains tax on the sale.
Used correctly over time, it allows you to keep compounding your real estate wealth rather than giving a portion back to taxes every time you sell. Each exchange builds on the last, and the effect over a decade or more can be significant.
There are rules around timing and how proceeds must be held, so working with a qualified intermediary and a real estate attorney is essential. But for any investor thinking long term, it is worth understanding from the start.
Where the Opportunities Are Right Now
The markets getting the most attention right now, the Carolinas, Georgia, South Florida, are already on most investors’ radar. That does not mean they are bad bets, but the easiest gains in those markets may already be priced in.
Closer to New York, there are several areas worth watching for investors willing to look at what is still developing rather than what has already arrived:
- Queens. A massive borough that remains relatively underdeveloped compared to Brooklyn. Neighborhoods like Forest Hills have seen quality projects, but there is still significant room for new development at accessible price points.
- Washington Heights and Inwood. Rental development is just beginning to take hold here. Early investors in neighborhoods like this have historically done well.
- Hoboken. Strong livability, easy Manhattan access, and continued demand make it a market worth paying attention to.
- Lower Manhattan and West Soho into northern Tribeca. New supply is coming online and demand in these corridors continues to hold up.
How to Think About New Development as a Long Game
New development deals do not move fast. From the time a developer acquires a site to the time a building sells out, three to seven years is a realistic timeline. Investors who succeed in this space understand that patience is not a passive quality. It is a competitive advantage.
A few principles worth keeping in mind:
- Understand the market before the deal, not because of it. The investors who do best are the ones who have already formed a view on where a neighborhood is heading before a specific opportunity comes along.
- Buy right and be honest about risk. Even in a rising market, overpaying at the start can eliminate the upside. Know what the realistic exit looks like before you commit.
- Build relationships with developers, brokers, and attorneys. The best opportunities rarely come from public listings. They come from the people who know what is coming before it does.
To Wrap Up
New development investing rewards the investors who are willing to think ahead, act early, and build the relationships that put them in front of opportunities before they are widely available.
The neighborhoods everyone is excited about today were overlooked five years ago. The ones worth paying attention to now are the ones that still feel a little early. That feeling is usually the point.
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