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Justin Goodin - Building Apartments When Others Won't · REL Freedom Podcast

• 0:00
  SPEAKER_01: You know, as a developer, I think of it as like an art form, so to speak, because you are there finding the land, you're designing the building, you're picking out the paint colors, picking out the countertops.
• 0:09
  SPEAKER_01: So when you're like involved like in every step of the process about building this property that's going to be there for the next hundred years, I mean, you are like a lot more passionate about the building.
• 0:19
  SPEAKER_01: Like you care a lot more about it.
• 0:21
  SPEAKER_01: Um, like every time I visit one of my one of my projects now, like I'm there, I get out of my car, start picking up like trash I see in the parking lot.
• 0:27
  SPEAKER_01: Like, you know, like I actually like really care about that building because I put so much time, effort, and work into it.
• 0:34
  Mike Swenson: Welcome to the Real Freedom Show.
• 0:36
  Mike Swenson: We inspire you to pursue your passion to gain time and financial freedom through opportunities in real estate.
• 0:41
  Mike Swenson: I'm your host, Mike Swenson.
• 0:43
  Mike Swenson: Let's get some real freedom together.
• 0:54
  Mike Swenson: Hello, everybody, welcome to another episode of Real Freedom, where we talk about different ways that you can build time and financial freedom through opportunities in real estate.
• 1:02
  Mike Swenson: I'm your host, Mike Swenson.
• 1:04
  Mike Swenson: If you want to get started on your real estate investing journey, check out our website freedom throughrealestate.com.
• 1:11
  Mike Swenson: It's where we put all of our content, all of our information to help you guys decide where and what you want to do inside of real estate.
• 1:17
  Mike Swenson: Tell some great stories, inspire you to pick a path and figure out what's going to be best for you.
• 1:22
  Mike Swenson: There's a lot of cool stuff to do, and we're excited to kind of show some great examples of people doing some cool things along the way.
• 1:28
  Mike Swenson: Excited today, we're gonna talk about multifamily development.
• 1:32
  Mike Swenson: We've got Justin Gooden on here, and uh he's gonna share his story of purchasing small property on the lending side, moving into real estate, moving into syndications, moving into development.
• 1:44
  Mike Swenson: Justin, we're so excited to have you on the show and excited for a cool conversation.
• 1:47
  Mike Swenson: Yeah, likewise.
• 1:48
  Mike Swenson: Thanks for having me on, Mike.
• 1:49
  Mike Swenson: Well, take us back, tell us a little bit more about you and kind of your backstory, and we'll go from there.
• 1:53
  SPEAKER_01: So I guess like my path into real estate got started like when I was in business school.
• 1:58
  SPEAKER_01: So I went, I went to uh business school here in Indiana, studied finance and supply chain management.
• 2:04
  SPEAKER_01: And you know, while I was in business school, I was like looking for additional ways to like earn that passive income on the side and have some sort of like extra money coming in to uh in addition to like the job I already had.
• 2:15
  SPEAKER_01: And so I, you know, like many people, I got the idea to start investing in real estate.
• 2:20
  SPEAKER_01: And also, like many people, when you get that idea to start investing in real estate, really like you know, some of the first things you think about is like I'll go fix and flip a property or I'll go buy a rental.
• 2:30
  SPEAKER_01: So that's exactly what I did.
• 2:31
  SPEAKER_01: That's like all the uh, you know, they the thought process I had back then.
• 2:35
  SPEAKER_01: I thought it's like how you had to get started was buying a rental or doing a fix and flip.
• 2:39
  SPEAKER_01: So my first rental was on the west side of Indianapolis.
• 2:42
  SPEAKER_01: It was back in 2018, and I paid forty four thousand dollars for a rental uh back then, if you can if you you know believe that.
• 2:50
  SPEAKER_01: And that was a recently renovated flip from another investor that he was selling for$44,000.
• 2:56
  SPEAKER_01: So uh pretty crazy because how prices have changed over the years.
• 2:59
  SPEAKER_01: But anyway, so that's my first taste of real estate.
• 3:03
  SPEAKER_01: Um after that, I bought a fix and flip.
• 3:06
  SPEAKER_01: I graduated business school and started working for a bank as a multifamily underwriter.
• 3:10
  SPEAKER_01: And so they're like on the lending side, I was analyzing the risk for the bank's perspective and uh you know, underwriting loans and borrowers and seeing like how that whole structure worked on the back end from the lender side.
• 3:22
  SPEAKER_01: And that was all primarily just uh multifamily acquisitions and multifamily ground-up development.
• 3:27
  SPEAKER_01: So going into the bank is where I saw like the kind of like the true power of multifamily and you know larger scale commercial multifamily assets.
• 3:36
  SPEAKER_01: And um, it allowed me to see like you know what I wanted in the future for myself and what I wanted to do like for my own business eventually.
• 3:45
  SPEAKER_01: Because my my thought press, you know, going into the bank wasn't like I'm gonna work here for the next 40 years and retire.
• 3:50
  SPEAKER_01: Was like I wanted to eventually scale into real estate and like once I started working for the bank, scale into the multifamily acquisitions.
• 3:58
  SPEAKER_01: And so that was gonna be like a stepping stone, like a learning phase for me to like actually start my business uh for my own one day.
• 4:04
  SPEAKER_01: And long story short, you know, got fired from my W-2 at the bank there and was kind of like forced into real estate uh prematurely, but it actually you know worked out great.
• 4:14
  SPEAKER_01: It had you know turned out to be like the best thing that ever happened to me.
• 4:17
  SPEAKER_01: Um so you know, no uh no high cars feelings for the bank about that as well.
• 4:22
  SPEAKER_01: And then, you know, long story short after that, I just started eventually you know buying existing multifamily assets um in and around the Midwest, which led me into multifamily development.
• 4:32
  SPEAKER_01: And today I'm uh you know, I founded the company called Good in Development, where we are building class A multifamily and mixed use communities um in and around Indiana.
• 4:41
  Mike Swenson: Fantastic.
• 4:42
  Mike Swenson: So kind of walk through this through the story here.
• 4:44
  Mike Swenson: So on the lending side, I'm curious to hear somebody newly out of college, being able to see the due diligence on the properties, the financials on the properties, kind of the borrower side of the story in terms of assets, cash flow, all that.
• 4:58
  Mike Swenson: Like, what are some things that you saw that maybe were surprising to you and or maybe just opened up your mind too to like, hey, hey, I can do this too.
• 5:06
  Mike Swenson: You know, I think that's one of the things for me that I I see is we have this idea of like, oh, all these other people have more knowledge, more money, whatever it is.
• 5:15
  Mike Swenson: And then you realize actually they don't, and I can do the same thing that they do.
• 5:19
  SPEAKER_01: Yeah, I think like the main thing that I saw working with the bank is that it was a pretty straightforward process, at least like, you know, on paper, what I saw.
• 5:27
  SPEAKER_01: You know, these borrowers for finding a uh a great deal that penciled out on paper, they had a track record and experience and had a business plan that they could show to the bank.
• 5:38
  SPEAKER_01: And then they had an exit strategy.
• 5:40
  SPEAKER_01: You know, were they going to sell in three years?
• 5:42
  SPEAKER_01: Were they going to refinance and pay our bank back and go into long-term permanent financing?
• 5:47
  SPEAKER_01: But they just had a concrete plan of what they were what they were gonna do buying this property.
• 5:53
  SPEAKER_01: Um, in addition to that, you know, while they like you know these borrowers were sophisticated, they were experienced, and yet they were wealthy, they weren't coming out of pocket for all the money needed for the down payment.
• 6:04
  SPEAKER_01: You know, they were raising capital from investors to do these projects.
• 6:08
  SPEAKER_01: And I mean, just for you know, for example, like some of these larger developments that I was underwriting for the bank, where the borrowers come to the table with you know 10, 20, 30 million sometimes, depending on the size deal.
• 6:19
  SPEAKER_01: Uh, you know, like the borrower is not like writing a check out of their checking account for that amount.
• 6:24
  SPEAKER_01: You know, they are working with investors, they're working with institutional partners sometimes, which allows them to do more deals and do more projects and scale their business because they're not writing a check for that full amount.
• 6:36
  SPEAKER_01: And they just they're just figuring out a way to partner with other investors to do so.
• 6:40
  SPEAKER_01: So that's a big uh you know just eye-opening experience for me, is that you're like we always have like this idea that you have to be rich and super wealthy and have millions of dollars in the bank to get started with some of these larger deals.
• 6:52
  SPEAKER_01: Um and you just need to know how to you know find the right people to work with and how to structure these deals um in order to get started on on these larger uh multi-family deals.
• 7:01
  SPEAKER_01: I look at it as more of like you're you're putting together a puzzle.
• 7:04
  Mike Swenson: So you just need to find you know the corner piece, the corner piece, some of the other pieces, and and you're just assembling the puzzle.
• 7:10
  Mike Swenson: Uh, you don't have to be everything because yeah, unless you have a super high-paying job and you could afford to put hundreds of thousands of dollars into deal after deal after deal, you've got to find a way to do that, especially on the early side as you're building and growing.
• 7:24
  Mike Swenson: And from like you mentioned, on a s on the side of scaling, if you want to scale, yeah, you're you're not gonna be able to print money fast enough to scale at the speed that you want to.
• 7:33
  Mike Swenson: So you've got to partner through other people.
• 7:35
  Mike Swenson: So you you know, after that that job went away and you started going into the the multifamily side, kind of talk about those early steps for you and how you're able to to build that puzzle and put those pieces together to get some momentum going without having a track record, right?
• 7:50
  Mike Swenson: Because you mentioned having a track record is important, so you've got to start and build your resume from square one.
• 7:56
  Mike Swenson: Yeah.
• 7:57
  SPEAKER_01: So yeah, I mean, when you're starting out and you don't have that experience, you don't have that track record to go and you know talk to brokers and give brokers that confidence so you can close.
• 8:04
  SPEAKER_01: What I did to get around that was kind of skip the broker and go direct to seller.
• 8:09
  SPEAKER_01: So I did various methods from direct mail and cold calling, even like cold email to find some deals.
• 8:16
  SPEAKER_01: But that was how I came across my very first commercial multifamily deal was sending a direct mail campaign out, and one of the owners that I mailed to um ended up calling me.
• 8:25
  SPEAKER_01: And funny enough, like it ended up calling me like the exact same week I got fired from my banking job.
• 8:30
  SPEAKER_01: And so that turned out to be like my uh very first acquisition, which just came in at perfect time.
• 8:35
  SPEAKER_01: But you know, when you're starting out like, well, yeah, with no track record, no experience, it's hard to get traction in that space because you're competing against so many other buyers and groups that already do have that track record.
• 8:46
  SPEAKER_01: Um what I did was, you know, skip that broker phase and just go around them and start talking to sellers directly who were uh you know motivated and wanted to sell their properties.
• 8:55
  Mike Swenson: I think that's it, that's important, you know, is finding a way to manufacture experience and or find somebody who's willing to take you on with the experience that you have.
• 9:05
  Mike Swenson: I remember for our first apartment building, we had, I think we'd put in a letter of intent.
• 9:09
  Mike Swenson: Can't remember if it was accepted at the time, but I remember them coming back to me and basically saying, Well, what have you done before?
• 9:14
  Mike Swenson: Well, previous to me being an investor in multifamily, I helped investors buy small multifamily properties as an agent.
• 9:22
  Mike Swenson: And so I remember I put together a list of all the properties that I helped close.
• 9:27
  Mike Swenson: And, you know, it's decent enough.
• 9:29
  Mike Swenson: And so I said, you know, essentially, like, here's my list of properties that I've worked with my clients on for investing, therefore, being able to analyze deals, being able to, you know, recognize a good deal, figure things out, you know, put together a business plan.
• 9:45
  Mike Swenson: I've helped all these people do it, and so that's why you should work with me to be able to do my first deal, right?
• 9:50
  Mike Swenson: And then we found an investor partner to put up the money for.
• 9:53
  Mike Swenson: But yeah, you've got to find a way to piece some things together, build a resume from scratch so that people are trust you.
• 10:01
  SPEAKER_01: Exactly.
• 10:02
  SPEAKER_01: And another thing I did around, you know, to get around the track record part was like when I was going to investors, um, you know, I didn't have a track record in buying larger scale multifamily.
• 10:11
  SPEAKER_01: Um, but what I did was, you know, um, for many like years prior to that, or like, you know, maybe like a couple years, but I was posting on social media constantly, trying to build up my um, you know, just audience about multifamily, attracting investors to my website and into my funnel so that when I came across a deal and had a deal, I already had some of these people like warmed up in my network, so to speak.
• 10:34
  SPEAKER_01: They were already familiar with me and hopefully built some trust over that time as well.
• 10:37
  SPEAKER_01: So I was already, you know, doing that like many you know, years prior to actually having that first deal.
• 10:42
  SPEAKER_01: And then on top of that, um, I partnered with another like local investor here in Indiana uh for that first acquisition.
• 10:48
  SPEAKER_01: So this is a guy that already had experience in multifamily.
• 10:51
  SPEAKER_01: Um, you know, he came on board, loved the deal, him and I split the GP together, but having him on the team as well kind of helped with that that strength and credibility to investors.
• 11:00
  Mike Swenson: So it sounds like you were already planting the seeds while you were still working in your W-2 job, that then when that job went away, at least you weren't starting from scratch right at square one.
• 11:09
  Mike Swenson: You already had some momentum going.
• 11:11
  Mike Swenson: And this was just kind of the aha moment of okay, now I need to push all my chips in the middle.
• 11:16
  Mike Swenson: Exactly.
• 11:16
  Mike Swenson: Correct.
• 11:17
  Mike Swenson: So talk a little bit about kind of then growing that side before we we get into the development piece.
• 11:22
  SPEAKER_01: Yeah.
• 11:22
  SPEAKER_01: So aside from uh development, you know, like before I was doing that just the classic value add multi-committee acquisitions here and around the Midwest.
• 11:30
  SPEAKER_01: Um, you know, became a partner in uh 33 unit, a 20 unit, 140 unit, um, some other like you know, smaller and medium-sized properties in around Indiana.
• 11:43
  SPEAKER_01: Um it was much more it was much more easier when the market was um you know when when debt was 3% and rent growth was 15%.
• 11:52
  SPEAKER_01: That model worked out extremely well where you can go in and buy the buy these undervalued properties and uh you know raise the rents two, three hundred dollars, sell it to the next buyer.
• 12:02
  SPEAKER_01: Um, that model worked out really well for for many years.
• 12:06
  SPEAKER_01: And then, you know, sort of when the market kind of shifted and like the Fed started raising rates back in you know 23, 24-ish, is kind of when it when it you know made that pivot to development, which I'm happy to talk about as well.
• 12:18
  Mike Swenson: Talk about you know, kind of the the reasons why and what you saw it could do for you, the itch that it couldn't scratch that you were doing kind of on the just the multifamily acquisition side.
• 12:28
  SPEAKER_01: I think the biggest one that's is just like the satisfaction I get from development versus buying a you know existing value add multi-family.
• 12:37
  SPEAKER_01: You know, as a developer, I think of it as like an art form, so to speak, because you are there finding the land, you're designing the building, you're picking out the paint colors, picking out the countertops.
• 12:47
  SPEAKER_01: So when you're like involved like in every step of the process about building this property that's gonna be there for the next hundred years, I mean, you are like a lot more passionate about the building, like you care a lot more about it.
• 12:59
  SPEAKER_01: Um, like every time I visit one of my one of my projects now, like I'm there, I get out of my car, start picking up like trash I see in the parking lot.
• 13:05
  SPEAKER_01: Like, you know, like I I actually like really care about that building because I put so much time, effort, and work into it.
• 13:12
  SPEAKER_01: And I didn't get that satisfaction with buying an existing multifamily, um, which is fine.
• 13:17
  SPEAKER_01: I mean, you know, investors buy these deals to make money for them and their investors, it's an investment, you know, buy it, sell it, make money, who cares?
• 13:24
  SPEAKER_01: Um that's you know, that's that's still important for the development side, of course, but um you know it's just a different approach that I take on the development side as well.
• 13:33
  SPEAKER_01: Additionally, I think that development has a lot less competition and more opportunity than buying existing multifamily, kind of like what you know, what I mentioned before, but um the whole space like with just value add and buying existing multifamily properties over the last five, six years, have just exploded, which in return has just you know driven down margin and returns for investors, um, increased competition and just made deal flow extremely difficult to come by.
• 14:04
  SPEAKER_01: And that's like where I was at, and like that's what I was experiencing when I was still in that space, and I went like an entire year without buying a deal, and I just like looked at myself like that's just not like a business that I could you know sustain unless I want to go back to like a W-2 eventually.
• 14:20
  SPEAKER_01: But so there's just so much competition and the margin just got so low in that business, in that strategy.
• 14:27
  SPEAKER_01: And I just thought about development and just made a better sense for me like longer term.
• 14:31
  SPEAKER_01: I just like the idea of it more.
• 14:32
  SPEAKER_01: And I already like I already knew like some local developers here in my own city that I've already connected with previously and kind of you know talked about development as well.
• 14:40
  SPEAKER_01: And you know, when I looked at guys like that that were you know five, ten, fifteen years ahead of me that were really successful, you know, they they weren't buying like your you know 20-unit property built in 1965, you know, they were building apartments from the ground up.
• 14:56
  SPEAKER_01: And so I kind of just uh you know read the writing on the wall and kind of just made that switch into development.
• 15:01
  SPEAKER_01: And I do think, you know, now being into it, um, there is less competition and there is more opportunity and more benefits in that space.
• 15:08
  Mike Swenson: Now, for somebody that that hasn't done that yet, you know, I think about okay, multifamily, you know it, you've done a few deals.
• 15:15
  Mike Swenson: Now you've got to figure out, you know, how to find land, how to put together all those plans, and then how to make the the numbers and the financials work and you know, figure out the lending side of the property.
• 15:26
  Mike Swenson: So there's a lot of new phases that come in when you flip over to development.
• 15:30
  Mike Swenson: And I'm assuming you mentioned having connections of people who have done development, but not having prior experience yourself.
• 15:35
  Mike Swenson: Kind of how are you able to overcome those hurdles where somebody on the outside might say, geez, that's a lot of new stuff you've got to learn?
• 15:42
  Mike Swenson: And that's a big risk to go from flat piece of land to property that's gonna make money.
• 15:48
  Mike Swenson: How did you kind of walk through that process?
• 15:50
  Mike Swenson: Are you looking to get started or scale in real estate investing but don't know your next step?
• 15:55
  Mike Swenson: Are you overwhelmed thinking about finding deals, analyzing deals, doing due diligence, and managing properties on top of it?
• 16:02
  Mike Swenson: Go ahead and push the easy button and invest with us.
• 16:05
  Mike Swenson: Real estate investing is what we do full time.
• 16:07
  Mike Swenson: We've done dozens of deals with hundreds of doors.
• 16:10
  Mike Swenson: We have the knowledge and experience to handpick the best deals that most investors can't find.
• 16:15
  Mike Swenson: We've got large off-market deals all the time where you can hopefully find returns and economies of scale that you just can't find on your own.
• 16:21
  Mike Swenson: The best thing is it's 100% passive to you for less capital than you've put down trying to acquire a property on your own.
• 16:28
  Mike Swenson: Don't let this year go by where you don't make the leap, add to your portfolio, or you just did an analysis by process.
• 16:35
  Mike Swenson: To find out more, visit freedomthroughrealestate.com and click on invest.
• 16:40
  Mike Swenson: You can book a call and learn more there.
• 16:42
  Mike Swenson: So get to scaling your portfolio now with us by your side.
• 16:45
  Mike Swenson: That's freedomthroughrealestate.com and click on invest.
• 16:49
  SPEAKER_01: I mean, good great question.
• 16:50
  SPEAKER_01: So, I mean, the for the first project that I did, like I mentioned, I was already kind of in that phase of switching into development and already had some other like uh local developers in my network that I knew here in Indiana.
• 17:00
  SPEAKER_01: And my first experience in development was actually partnering with another local developer here who already had a project in place.
• 17:07
  SPEAKER_01: And so that allowed me like really kind of uh, you know, ride shotgun, so to speak, on this first project, but still be involved in every step of the way.
• 17:16
  SPEAKER_01: You know, we're still like involved in the in the land acquisition, assembling different parcels together, um, going to the city for approvals and incentives and things like that.
• 17:24
  SPEAKER_01: And then all through construction, you know, raising capital on the deal, signing on the bank loan as well.
• 17:30
  SPEAKER_01: I mean, so still like involved A to Z.
• 17:32
  SPEAKER_01: But that's how like I got my first uh you know experience into development is by partnering with somebody who's already actually doing it and somebody already kind of had like an active deal like in their pipeline.
• 17:42
  Mike Swenson: Yeah, very similar to the multifamily side, right?
• 17:45
  Mike Swenson: When you first got in and partnering with somebody who knows what they're doing, that's that's wise to do that.
• 17:49
  Mike Swenson: So kind of walk through, you know, going through your your first deal, challenges that you had, some thoughts that you had, learnings you had on that first property.
• 17:56
  SPEAKER_01: So I'll talk about the second one actually, because the second one is a little bit more recent in my mind.
• 18:00
  SPEAKER_01: We just kind of wrapped up construction like last month.
• 18:03
  SPEAKER_01: Yeah.
• 18:03
  SPEAKER_01: Um, so this second one that we did, 114 units and 3,000 square feet of commercial, you know, fantastic project, fantastic location.
• 18:11
  SPEAKER_01: Everything check the box as far as the market location, the numbers, everything that looked like that is amazing.
• 18:17
  SPEAKER_01: I'd say like the biggest surprise to me of getting into development is just working with the subcontractor.
• 18:25
  SPEAKER_01: And so if anybody doesn't know, but you know, when you're a developer, you're not like the company that's on site, like actually building the project, like you're not there like on site, like swinging the hammer or doing things like that.
• 18:37
  SPEAKER_01: As a developer, I go out there and hire these different companies to work for me and you know assemble the team and the project for us.
• 18:44
  SPEAKER_01: Um, and one of those is is hiring a construction management company.
• 18:48
  SPEAKER_01: And then that construction management company you know basically manages the construction process for us.
• 18:54
  SPEAKER_01: So they go out there and hire the subs, which are the the framers, electricians, plumbers, like and they're on site every day managing that crew and making sure things are up to standard.
• 19:04
  SPEAKER_01: So, yeah, back to my answer.
• 19:06
  SPEAKER_01: I mean, the biggest surprise to me is just you know, these subcontractors, they don't always care about the project that that we are building here.
• 19:16
  SPEAKER_01: And some of them just get paid by volume.
• 19:18
  SPEAKER_01: So, for example, like when they're just tiling a shower surround, you know, they're getting paid like the more they do in a single day.
• 19:25
  SPEAKER_01: They're not getting paid by you know how good of quality it is or how how good it looks.
• 19:30
  SPEAKER_01: Like if they do 50 tile jobs in a day, they're getting paid for 50.
• 19:34
  SPEAKER_01: And that motivates them to work faster, yes, but also you know, not care about about as much as the quality and making sure like the lines are are even, uh, making sure like the grout doesn't have like any holes in it.
• 19:48
  SPEAKER_01: And so just things like that, you know, just managing the uh sub process is a whole different business and job on its own.
• 19:56
  SPEAKER_01: And it's not like a a job like where you where you build these properties and you can just hire that construction manager company, go on vacation, come back in a year when it's finished.
• 20:06
  SPEAKER_01: Like you have to be there on site uh weekly or uh more than weekly, and just making sure that all these steps from A to Z are being up to code, up to standard, um, and you know, like the corners like our aren't beating uh you know cut, so to speak.
• 20:22
  Mike Swenson: So you're uh just kind of shadowing everything, watching them making sure that the boss man's happy when you're around, right?
• 20:28
  Mike Swenson: Yes.
• 20:28
  Mike Swenson: I mean you're you're you're walking and shadowing everything.
• 20:31
  SPEAKER_01: And when you have 114 units and you got to go and walk 114 bathrooms or 114 kitchens, I mean uh it really adds up quick, and you can see like why it's a whole other uh you know job on its own.
• 20:43
  Mike Swenson: Curious to know what was the process in terms of of site selection first, being able to find the land, being able to prep it and get it ready for that, you know, because that, like you said, you've you've done it before, you're able to shadow other people, but kind of deciding, like to me, you know, understanding where is their demand, where's going to be a good spot to put this thing, because once we build it, we can't move it.
• 21:04
  Mike Swenson: So we've got to be right on that location.
• 21:06
  Mike Swenson: So talk about selecting the right location.
• 21:08
  SPEAKER_01: Yeah, and location is always absolutely the number one, you know, factor like in any project that I decide on.
• 21:14
  SPEAKER_01: Nothing else matters unless it's in a just a fantastic market and a great like location in that market.
• 21:20
  SPEAKER_01: So I mean then the numbers could make sense and we could be you know having like approvals go through, but if it's not a good location or a fantastic location, it's not a project that I would move forward on.
• 21:30
  SPEAKER_01: So, of course, you know, I look at the actual you know stats about the market as far as you know, population growth, job growth, job diversity, all those things, uh supply and demand factors as well.
• 21:41
  SPEAKER_01: But I want to see a site that is like where is a location that I would live in personally.
• 21:47
  SPEAKER_01: Like, is the site next to like restaurants and movie theaters?
• 21:51
  SPEAKER_01: Is it walkable?
• 21:52
  SPEAKER_01: Is it near a trail?
• 21:53
  SPEAKER_01: Is it near major employment centers, or is it next to like a graveyard or an empty field?
• 22:00
  SPEAKER_01: Or like a kind of like a run down, crappy looking shopping center.
• 22:04
  SPEAKER_01: I mean, those are the things that I look for in a site.
• 22:07
  SPEAKER_01: And there's like really like no like number or metric I can like tell you or your listeners.
• 22:11
  SPEAKER_01: It really kind of just comes down to like the vibe you feel from it and the gut feeling.
• 22:16
  SPEAKER_01: But location is always like the number one, you know, most important factor in my mind is just finding like that absolute great location.
• 22:23
  SPEAKER_01: Cause like you said, you can't move it and you're gonna be competing against other properties in the in the market.
• 22:28
  SPEAKER_01: So that location just has to be like A plus before you do anything else.
• 22:31
  SPEAKER_01: Yeah.
• 22:32
  SPEAKER_01: How long did it take you to find that?
• 22:33
  SPEAKER_01: Uh that one that I was referring to, so I found that from a local broker.
• 22:38
  SPEAKER_01: Um I would say like maybe you know, it took me like a couple months to come across this piece of land.
• 22:44
  SPEAKER_01: Um it was actually being sold from another developer who couldn't or didn't like want to move forward with the project and their plans and specifications like weren't like the most efficient.
• 22:56
  SPEAKER_01: Um, they were planning some kind of like 50 or 55 unit property and just like weren't utilizing the site um as efficiently as they think you could.
• 23:06
  SPEAKER_01: So like when I found that site for a broker, um, I sent it to my my team, our my architect.
• 23:11
  SPEAKER_01: You know, if we did four stories, if we did an underground detention site, which didn't take up as much parking, then we could do 114 units in 3,000 square feet of commercial space.
• 23:22
  SPEAKER_01: So some things like that just made me look into the deal further.
• 23:25
  SPEAKER_01: Numbers made sense for us.
• 23:26
  SPEAKER_01: And so we ended up purchasing that that site from another developer.
• 23:29
  Mike Swenson: Talk about the finance piece of that because from the time that you have the idea, right?
• 23:34
  Mike Swenson: You've got to acquire the land, you've got to hire the architects, do a lot of work, you're shelling out a lot of money on the front end.
• 23:40
  Mike Swenson: Obviously, you're you're raising capital along the way, and then you've got your loans, things like that.
• 23:45
  Mike Swenson: All that happens before first renter gives you the first check on the first month, right?
• 23:50
  Mike Swenson: So, how are you able to build that runway so that everything lines up so that you can keep things moving forward until the money starts coming in once it's open?
• 23:58
  SPEAKER_01: Yeah.
• 23:59
  SPEAKER_01: I mean, you want to be like extremely cautious with every single dollar that you spend.
• 24:03
  SPEAKER_01: And I mean, just talking about like the pre-development stays, uh phase is like we're not raising capital until like we're basically like ready to close on the construction financing.
• 24:13
  SPEAKER_01: So all these like upfront costs and fees and like any if you if you need to buy the land, that's all done like with either my money or you know our partner's money that are involved as well.
• 24:23
  SPEAKER_01: But like we don't raise capital day one and say, hey, we're gonna go through this city approval process or we're gonna pay this engineer, this architect, and just hope this project goes through.
• 24:31
  SPEAKER_01: Like we only start raising capital to like towards the end when we have all approvals, when we have control of the land, uh, when we have like our plans from the architect and engineer complete, and now all we need to do is just send all this to the bank and then close on the construction loan like 30 days later.
• 24:47
  SPEAKER_01: So that's like when we get investors involved.
• 24:49
  SPEAKER_01: But yeah, to your point, um, there may be different like approval processes you have to go through this with the city as far as like rezoning, which we did have to do as well.
• 24:58
  SPEAKER_01: We actually created a PUD.
• 25:00
  SPEAKER_01: It had to go through uh like a city council approval process for that, and that allowed us to go four stories and have that density, have the commercial component attached to the property as well.
• 25:10
  SPEAKER_01: And along like all this process, when we have like the land under contract, so nobody else can you know take the land or opportunity away from us, um, as we're going through this approval process with the city, that's when like when we're working with the architect, we're working with a civil engineer, they both create like their own individual plans for us.
• 25:31
  SPEAKER_01: Um, and sometimes those plans can take four to six months for the architect to to make for us.
• 25:37
  SPEAKER_01: Um also along that time, we are doing reports like a survey, an environmental report, a geotech report to test the soil.
• 25:46
  SPEAKER_01: And you know, at the same time, you know, we're keeping in contact with the bank because the bank is wanting all this information from us in order to like approve the loan from us.
• 25:56
  SPEAKER_01: And then like once at the end, like once all these pieces like come together, you know, like we have like all the approvals and the site is ready to go, we have all the reports back, the architect has their plans ready, um, the GC is on board and has our plans ready for construction.
• 26:10
  SPEAKER_01: When all these things come together, now the bank is ready to close.
• 26:15
  SPEAKER_01: We send all this to the bank, go through their approval process, they go through their underwriting process, and now we're ready to close.
• 26:20
  SPEAKER_01: And then we close the the construction loan.
• 26:23
  SPEAKER_01: And now, like after all that work, like now when like is the real work starts, like when construction starts.
• 26:29
  SPEAKER_01: Yeah.
• 26:29
  Mike Swenson: And how long did that construction take on the project?
• 26:32
  SPEAKER_01: Uh so that one, the 114-year property, that was in Cochmo, Indiana.
• 26:35
  SPEAKER_01: That phase actually just to get to closing and start construction took 13 months, and then construction took 12 months.
• 26:43
  SPEAKER_01: Um we just wrapped it up about two months ago, and now we're in the leaseup phase.
• 26:48
  Mike Swenson: That's that's crazy because it's a it's a long time to be able to have that that vision and that plan, stick it through.
• 26:54
  Mike Swenson: Uh, you know, lots of hurdles, I'm sure, came up along the way, and you've got to figure it out.
• 26:59
  Mike Swenson: And to finally see that through, yeah, you're looking at you know, two two plus years later.
• 27:04
  Mike Swenson: Uh, that's a that's a long time.
• 27:06
  Mike Swenson: That's a that's a long time to wait.
• 27:08
  SPEAKER_01: It is a long time.
• 27:09
  SPEAKER_01: And yeah, like there, there's constantly hurdles and there's constantly problems.
• 27:13
  SPEAKER_01: I'm not here to like sugarcoat it and act like everything is all grand and you know, rosy.
• 27:17
  SPEAKER_01: Like, of course, there's problems, but I mean that's like always like the job as a developer is to you know navigate these problems and these challenges to make this project successful.
• 27:26
  SPEAKER_01: Um, so yeah, I mean, it is a a long process for sure, but it's it's hard to believe, but it actually goes by really fast.
• 27:34
  SPEAKER_01: I mean, it seems like just yesterday I was like looking at this piece of land online, and now like we're here, like it's built, we're in lease up, but it it does go by fast and it is like really fun and enjoyable at the same time.
• 27:45
  Mike Swenson: Okay, so you got so the second project now, just in lease up phase.
• 27:48
  Mike Swenson: Anything else kind of in in the hopper here?
• 27:51
  SPEAKER_01: Yeah, we have a third one that we're starting, should be like fall of this year as well, uh, November or December time frame.
• 27:56
  SPEAKER_01: That'll be 153 units and 3,000 square feet of commercial space to that project.
• 28:02
  SPEAKER_01: Very similar, as sort of like, you know, style and structure to our last two.
• 28:06
  SPEAKER_01: We're using the same architect, the same GC, same civil engineer as we have on the past two projects and just you know, copying and pasting what works and taking it to the third one.
• 28:16
  SPEAKER_01: So yeah, that'll be my my third and largest project happening uh this fall in 2026.
• 28:22
  SPEAKER_01: And it should be like in the top five largest projects happening in Indiana um in 2027.
• 28:28
  SPEAKER_01: How cool is that to think like, hey, that's that's me.
• 28:31
  Mike Swenson: I'm I'm working on that big project.
• 28:33
  Mike Swenson: Very cool.
• 28:33
  Mike Swenson: Um that's that's got to feel really good.
• 28:35
  Mike Swenson: Yeah, I'm excited.
• 28:36
  Mike Swenson: Looking back now, you know, to wrap things up, you moved into multifamily, now you're doing development.
• 28:41
  Mike Swenson: What do you see here in the next couple of years for you and what is it accomplishing for you on the development side?
• 28:47
  Mike Swenson: Like I said, I know I know you mentioned kind of less competition, things like that, but what do you want to see happen as you continue to get sharper and sharper in this space?
• 28:55
  SPEAKER_01: I want to keep growing and expanding, um, but with the caveat of growing uh slowly but surely.
• 29:02
  SPEAKER_01: I'm not like a company that has uh like a unit count goal of like, hey, we want to build 10,000 units over the next you know five years, 10 years, whatever.
• 29:09
  SPEAKER_01: I I want to grow like very thoughtfully and just slowly over time.
• 29:13
  SPEAKER_01: So I'm only doing like very risk-adverse uh projects that I truly believe in.
• 29:18
  SPEAKER_01: And you know, like just not growing too quickly, which I think some companies make the mistake of doing.
• 29:23
  SPEAKER_01: Um, additionally, I've been like very, very focused here in Indiana, which is like where I live.
• 29:28
  SPEAKER_01: It's like where I'm comfortable, it's where I know.
• 29:30
  SPEAKER_01: I think like as I start growing and expanding, I'd like to move into other, you know, nearby markets in around Indiana, um, whether that's uh Ohio or Kentucky, Tennessee, but other you know, high growth markets that are still somewhat close to Indiana, but and and still hopefully in the Midwest as well.
• 29:49
  Mike Swenson: Awesome.
• 29:50
  Mike Swenson: Well, excited to see what you're working on.
• 29:52
  Mike Swenson: Uh it's really fun.
• 29:53
  Mike Swenson: Glad to have somebody that's in development, you know, be able to share their story.
• 29:56
  Mike Swenson: For people that want to reach out to you, kind of learn more about what you're doing, how can they do so?
• 30:00
  SPEAKER_01: Yeah, you can follow me and connect me on Facebook, LinkedIn, Instagram.
• 30:03
  SPEAKER_01: It's all just Justin Gooden, first and last name.
• 30:06
  SPEAKER_01: And then we wanted to, you know, just keep in touch with our future projects and partner with us on future opportunities, you can go to goodindevelopment.com.
• 30:14
  Mike Swenson: Awesome.
• 30:14
  Mike Swenson: Well, thank you so much, Justin, for coming on, sharing your story.
• 30:17
  Mike Swenson: Exciting to see all the cool stuff that's happened in such a short period of time, and exciting to see the development opportunities continue to grow for you.
• 30:24
  Mike Swenson: Thank you, Mike.
• 30:25
  Mike Swenson: Thanks for having me.