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The Real Estate Syndication Show Podcast | A New Development Model and Preparing for a Recession with Scott Choppin

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Scott shares the criteria a property should meet before they would consider getting involved and explains why workforce housing is a more defensible market than millennial housing. He gets into a discussion about the anticipated recession, why the construction cycle should be paid close attention to, how developers can best prepare for the downturn and what to do when the recession hits while the property is still under construction. Scott further advises about the importance of mentorship for new developers and what other developers can do to improve their businesses.

"Our UTH product because it serves working families really only goes in certain locations. But I don’t mean to be saying that it’s exclusive one way or the other. It’s more a function of our tenant base. Working families already exist in the blue-collar neighborhoods is the way we describe it. So there are low income neighborhoods in any city. So whether it’s Orange County or LA County, we’re looking for those neighborhoods where our tenant base already lives, and we’re now just providing them a new housing type that they don’t otherwise have available." - Scott Choppin

Key Points From This Episode:

  • Being a real estate developer of highly undersupplied multigenerational urban housing.
  • The disparity that exists between income and rent or housing prices in California. 
  • How they are approaching their entry into the Orange County market.
  • Their criteria for buying assets and why they use the new development model.
  • How the market cycle determines the deals that work best and the influence of a recession.
  • The difference between workforce and millennial housing in terms of the tenant base.
  • Preparing for the downturn in the context of the new development model.
  • What happens if a recession hits while a property is under construction?
  • The type of investor that invests in a value-add property versus in a new development one.
  • A recent project that did not go as planned.
  • The importance of watching your construction cycle as you go into a recession.
  • Scott’s best advice for anybody who wants to get into the new development space.
  • The value of mentorship, being willing to work for free and why nothing replaces experiences.
  • Improving their business by creating standard operating procedures and social media content.
  • And much more!

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