Dirt to Dollars: CRE Development, Creative Financing & Tax Incentives | Katie Kim

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Introduction: How to Start with Little to No Capital

What if you could develop commercial real estate projects with little to no money down? Sounds too good to be true? In this episode, we sat down with Katie Kim, an expert in commercial real estate (CRE) development, to uncover the secrets behind creative financing, tax incentives, and deal structuring that can transform raw land into thriving, cash-flowing assets.

Katie, who comes from a family background in construction and development, shared her journey of breaking into real estate, structuring creative deals, and leveraging government incentives to maximize profits. Whether you're an aspiring developer, an intermediate investor, or an industry expert, this episode is packed with actionable insights that can help you mitigate risk, secure funding, and maximize returns.

🎧 Listen to the full podcast episode here: LINK

👁️ Watch the full episode here: LINK

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Key Takeaways from the Podcast

• Creative financing strategies can help you acquire property with minimal capital.
• Understanding economic incentives like tax credits and TIF districts can boost profitability.
• Building the right network is crucial in deal sourcing and structuring.
• Development for a fee model allows investors to leverage expert guidance.
• Mitigating risk through contingencies is key to successful CRE projects.

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Unlocking Creative Financing in Commercial Real Estate

The Power of Structuring No-Money-Down Deals

Creative financing is one of the most powerful tools in a real estate investor’s arsenal. Katie shared a real-world example of how she structured her first commercial deal without putting in her own capital.

Here’s how she did it:

✅ Leveraged her real estate commission as equity – Instead of taking her commission in cash, she rolled it into the deal as part of her ownership stake. 

✅ Negotiated seller credits for sweat equity – By managing certain aspects of the project, she convinced the seller to provide credits that reduced the amount of upfront capital required.

✅ Partnered with an investor who funded the remaining capital – Finding the right financial partner allowed her to complete the deal without personal financial risk.

Beginner Tip: Look for ways to contribute value beyond money, such as expertise, connections, or deal sourcing.

Intermediate/Expert Insight: Creative financing works best when structured with clear risk-sharing agreements and exit strategies.

Finding and Securing Economic Incentives

Many investors overlook government incentives that can significantly reduce development costs and increase profitability. Katie highlighted some of the most powerful incentive programs available:

• Tax Increment Financing (TIF) districts – These programs allow developers to use increased property tax revenues to finance project costs.
• Enterprise Zones – Special areas where businesses receive tax breaks to encourage development.
• Historic Tax Credits – Designed to incentivize the restoration of older buildings while reducing renovation expenses.
• Business Development Districts (BDD) – Municipal incentives for projects that stimulate local job growth and business expansion.

🔹Pro Tip for Beginners: Start by researching your city’s Economic Development Council (EDC) and GIS maps to identify incentive areas.

🔹Advanced Strategy: Many incentive programs allow for stacking, meaning you can combine multiple incentives (e.g., TIF + Historic Tax Credits) to maximize financial benefits.

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Case Study: How a Bakery Expansion Generated a 353% ROI

Katie shared a remarkable development deal where she helped Tresker’s Bakery expand into a historic building without relying on traditional bank financing. Here’s how they structured the deal:

• Secured 8 different financial sources, including grants, tax credits, and redevelopment incentives.
• Raised only $460,000 in investor capital for a $5 million project.
• Reduced operational costs by implementing energy-efficient solutions that lowered utilities by 50%.
• Created a recurring revenue stream through government-backed payments via redevelopment agreements.

💡 Lesson: The key to success in real estate development is understanding how to creatively finance a project while minimizing out-of-pocket expenses.

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Development for a Fee: A Low-Risk Path for Beginners

Many new investors hesitate to jump into development due to the high capital requirements and risk exposure. A development-for-fee model allows you to participate without assuming full liability.

How It Works:

• A fee developer acts as a consultant to guide you through the entire development process.
• They help navigate zoning approvals, financing, construction, and leasing.
• You pay them a fee for their expertise while learning firsthand how a project comes together.

🔹Beginner Tip: If you lack experience but want to get into development, partner with an experienced developer who can mentor you through your first deal.🔹 Expert Strategy: Developers who offer fee-based services can diversify revenue streams while maintaining ownership control over their core projects.

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Avoiding Common CRE Development Mistakes

Mistakes in CRE development can lead to costly overruns and failed projects. Here are key mistakes to avoid:

🚫 Failing to Secure Proper Zoning – Always verify land-use approvals before closing a deal.

🚫 Underestimating Development Timelines – Many projects take longer than expected, leading to cash flow issues.

🚫 Ignoring Tax Incentives – Not researching incentives can lead to missed financial opportunities.

🚫 Not Structuring Investor-Friendly Deals – Investors need a clear exit strategy to feel comfortable funding a project.

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Conclusion

Commercial real estate development offers incredible opportunities for wealth creation, but it requires careful planning, strategic financing, and knowledge of available incentives. By understanding the key aspects of creative financing, leveraging tax incentives, and structuring deals wisely, investors at all levels can reduce risk and maximize profitability.

Whether you’re just starting out, scaling your portfolio, or refining your expertise, learning from experienced professionals like Katie Kim can help you navigate challenges, structure better deals, and achieve long-term success in the industry.

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Stay Connected & Learn More

🎧 Listen to the full podcast episode here: LINK

👁️ Watch the full episode here: LINK

📩 Be part of the discussion! Join our Facebook group: LINK

📅 Book a coaching call w/ Matt Aitchison: LINK

🚀 Enroll in our EXPERT-led courses: LINK

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