Journey to Multifamily Millions

What it Really Means to Underwrite Conservatively with Justin Goodin, Ep 119

• Tim • Season 1 • Episode 119

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Welcome to the Journey to Multifamily Millions podcast, where we speak with professionals on financial topics!

Justin Goodin, the founder and CEO of Goodin Development, a company dedicated to helping busy professionals passively invest in real estate development so they can live a life by design now, instead of waiting until they retire.

In this episode, Justin talks about how he started out in real estate with fix-and-flip properties before moving into multifamily complexes and commercial real estate. The topic of conversation includes Justin's strategic shift to development, the difficulties and competitiveness of the value-added sector, and the significance of forming solid alliances with local governments to bridge project funding gaps. 

Justin also emphasizes the importance of cautious estimates and realistic underwriting in the commercial real estate market. Listen here to hear Justin's thoughts on risk reduction in development projects, building relationships with local communities, and effective real estate tactics.

Don't pass this up!


Episode Topics

[001:18] Meet our guest, Justin Goodin
[03:32] Transition to Multifamily Development
[04:59] Challenges and Lessons in Real Estate
[08:02] Insights on Conservative Underwriting
[14:47] Focus on Indiana Market
[20:10] Development Strategies and Partnerships
[30:06] What is one red flag every investor should look out for?
[30:55] What is a myth about the real estate business?
[32:51] Connecting with Justin


Notable Quotes

  • "I started like many others with fix and flips and rentals… I didn’t know that apartment investing and raising capital were even options." – Justin Goodin
  • "I immersed myself into commercial real estate—listening to podcasts, reading books, watching YouTube videos… all to learn about apartment investing." – Justin Goodin
  • "If you want to learn a business, go work in it." – Tim Little
  • "The word 'conservative' gets thrown around a lot. I really like to use the term, 'realistic'… under promising and over delivering." – Justin Goodin
  • "Taxes and insurance have been far above what was in pro formas, and that’s obviously having an impact on the overall projections." – Tim Little
  • "Stability is very attractive... my most consistent and boring – in the best possible way – deal that I have." – Tim Little




👉Connect with  Justin Goodin



👉 Connect with Tim

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[00:00:00] Justin Goodin: We work with different municipalities. So we go to different cities and towns and find a way to partner with them. And with that partnership, we work with them to build the project. And by doing so, like the city or the town actually invest real money and like real capital into the deal. So it lowers our basis on day one. And then the remaining will just be raised from LP equity, just regular retail investors. We have not used any kind of prep for Hermes in the past. And, honestly don't plan on doing so, but that's typically what our capital stack looks like

[00:01:08] Tim Little: Hello everyone and welcome to the journey to multifamily millions. I'm your host, founder and CEO of ZANA Investments, Tim Little. And on today's show we have with us Justin Goodin. Justin is the founder and CEO of Goodin Development, a company dedicated to helping busy professionals passively invest in real estate development so they can live a life of by design now instead of waiting until they retire. Justin, welcome to the show.

[00:01:33] Justin Goodin: Thanks for having me on, Tim.

[00:01:34] Tim Little: It is great to have you. And I am interested to learn more about what drew you to development deals specifically. But first please tell us about how you got started in real estate and how you got to where you are today.

[00:01:48] Justin Goodin: Yeah, of course. I got started in real estate back in 2018, and like most people, when you want to get started in real estate or get that idea that you want to get started in real estate,many people get started with fix and flips, rentals, and things like that. So that's exactly at the time I didn't like really, really know any better. I didn't really know, I didn't know that there was an apartment investing ways to partner people, ways to raise capital. So I started like many others and started fixing and flipping and rentals and things like that. even during my college years. So I studied finance and supply chain management at a business school here in Indiana. on one of these houses I was buying, it was, from a younger guy, just like me also in college and, not knowing anything about real estate. I asked this owner, why was he selling this property and it's a single family house on the west side of Indianapolis. And he answered that he was liquidating all his assets to go and invest in apartments. Now, like I mentioned, he was like a younger guy also in college, very similar to what I was doing. And I was like, how is this younger kind of average guy going to go invest in apartment buildings. At the time, that was just like a mind blown to me and a shocker to me. And, but, after that kind of instance, I just. Started listening to all kinds of different podcasts, reading books, watching YouTube videos, and really just immersed myself into commercial real estate. Started learning about apartment investing and,after graduation, I knew I wanted to learn more about commercial real estate and work in the industry. So I started working for a commercial bridge lender as a multifamily underwriter. So I did that for a number of years, which is a really fantastic experience for what I do today. seeing how banks underwrite deals, how they evaluate sponsors. All of that was really helpful for what I do today. But long story short, left my W2 job to pursue real estate full time and got into real estate syndications with larger apartment buildings. acquired a little over 400 existing multifamily units and last year we have since transitioned into ground up multifamily development here in Indiana. So happy to chat more about that, but that's the, a, long story short of how I got started in real estate and now do development,

[00:03:56] Tim Little: Yeah. And not an unusual story. I would be curious to learn though, like when you started, because it sounded like you started pretty young, while you were in school. And as most of us who have been college students know that's usually not when money is most plentiful. How were you able to? get the down payments for those properties that you started with the fix and flips Did you do some kind of creative financing or was there something else?

[00:04:22] Justin Goodin: hard money loan, some private investors and my own cash. I was also working at the same time. This was before COVID. So in houses where it's really cheap. The first rental I ever bought was 44, 000, if you can believe that, and this was a newly renovated flip that somebody was selling. So that was back then, 2018,a fully renovated flip was 44, 000 on the west side of Annapolis. So that was a down payment. I just bought it with my own money.

[00:04:50] Tim Little: Oh, wow That's just the idea of a house in general for that much. It's hard to think about, hard to imagine, but no, that's awesome. All right. you started like so many folks did with the fixing and flipping. And what was your transition point there? You said you had that,the eye opening experience of someone else who was transitioning themselves into the apartment side of things, and then you started to go down that rabbit hole that so many of us do, the podcast, the videos, everything else. And did you commit yourself at that point to getting into the Apartments. And if so, what was that transition period like? Did you have to offload some of the fix and flips that you had? What did that look like?

[00:05:34] Justin Goodin: Yeah. I did start offloading fix and flips and rentals and things like that, but I didn't like exactly getting started in apartment investing right then. That was like an epiphany, like where I learned how, that was possible. what drove me down, like that rabbit hole, but like after that is when I started working for that bank here in Indiana as an underwriter. So that is like what really propelled me. into real estate more. And, as an underwriter, like you see everything the borrower's tax returns, their balance sheets, their income statements, you see how much money they're making from these larger scale multifamily properties. So that was what was, like a look behind the scenes, if you will, and what really just drew me into the powerful benefits of real estate and more so like the multifamily, larger multifamily side.

[00:06:22] Tim Little: Yeah. And that seems like an amazing opportunity, right? They say, if you want to learn a business, go work in it. And you really did that. I don't think most folks who are Into real estate or thinking about going into syndication stuff like that necessarily have the credentials to hop into something like that. So it's not It's really, it sounded like a great opportunity for you that you were able to do that because again, you're behind the scenes, like you said, and I'm curious to know, I'm sure you learned a lot of,things you should be doing, but you probably saw some of the things that. Some syndicators are doing that. You learn where the wrong way to do business is because you were like judge and jury back there as the underwriter for some of these deals. So what were some of the bad habits or the things not to do? You learned by going through so many deals that you saw come across your desk.

[00:07:16] Justin Goodin: Point. And yeah, like you mentioned, I was behind the scenes and, working for the bank as an underwriter, I'm really like, evaluating the risk for the bank on these loans that they're, potentially going to be lending on. Yeah. Absolutely. So like I mentioned at a bridge lender, this is back in 2019, 2020 when rates were extremely cheap. The whole time that I worked there, I never saw any loan that came across the table that had a rate cap on it. So back when rates were extremely cheap, all these bridge loans were being done, at least the deals that were coming across, my desk and deals that I was underwriting. I never remember doing underwriting like any rate cap on these deals. These are all floating rates, recourse, bridge loans. I'm gone from the bank now, obviously, but I'd be curious to see how some of these loans and borrowers are doing, today with those properties. So that was a big, learning lesson, always put rate caps on, bridge loans and have conservative underwriting. you never know what's gonna happen in the future. You need to be conservative up front.

[00:08:11] Tim Little: Yeah. And that's we have to admit some of that is, hindsight is 2020, right? Because that wasn't the prevailing wisdom at the time. It wasn't. Oh, hey, go ahead and buy a rate cap, even though it'll cost you this many hundreds of thousands of dollars, whatever it might have been at the time. Because it seemed like an unnecessary expense, right rates could only go one direction and that's down. Obviously everybody knows that but then

[00:08:35] Justin Goodin: talked about back then. Correct. 

[00:08:37] Tim Little: Which do you know, what are those things? It's true until it's not and once it's not then it's pretty bad especially when it comes to those bridge loans and I remember, I did one deal this is a tallahassee deal and I think we were urged to get the rate cap and We didn't think it was Necessary like most but we were like, okay fine I can't remember if the private equity kind of you know forced it on us or if it was something that the lender wanted but we did it because the other thing was rate caps were relatively cheap Back then because no one thought they would be used right a rate cap can be seen as like almost insurance For if rates go up, and if you don't think you're gonna need to call in that chip on the insurance, then insurance companies are willing to do it pretty cheap. And so for us, it was relatively cheap, and it probably saved our deal right when it came down to it, because as soon as we hit that cap, I think it was 2 percent then they started kicking in and paying everything above that, which,if we had to pay out of pocket. Again, it could have crushed our deal, which I think we both know some deals did get completely crushed because they didn't have rate caps while taking bridge debt during that. Key period right there. So it's really interesting that you were able to see it I mean it would have been even more interesting if you were like still there and able to see how some of these Deals shook out in the end, but I don't know Maybe you know some of the folks that you worked with and how they're doing but certainly some interesting Insight and what would you say are the most? Valuable lessons that you took out of it, you know from the underwriting perspective Specifically we always talk about hey, you know be conservative. Okay, that's right. Like it's a great catchphrase and everybody says it but what are some of the specifics? That you put in when when underwriting that show that you're being conservative

[00:10:39] Justin Goodin: Good point. you're right. The word conservative gets thrown around a lot. I really like to use the term, realistic. And, I want to make the most realistic possible under analysis that I can. So what does it look like? That looks under promising and over delivering. So that's projecting rents that are maybe slightly below what you think can actually be achieved. That way, your whole deal isn't just highly dependent on achieving those higher rents. it can still work with lower rents. I got them on a past deal. We did, we actually projected a tax amount. Those around 10 percent higher will be expected. When it was going to get reassessed. little things like that, doing gradual increases to your income. if you're going to plan on, adding new forms of other income to the property, and let's take, for example, internet charge, if you're going to buy a property, and implement a new internet build back program,100 unit property, all that is not going to happen, day one or month one, when you take over a property, all these leases that are signed at the property today are locked into that contract. And so as a new owner, you will have to be able to, gradually implement that internet income. Or that ballet trash or that new form of other income. But you need to find a way to model that accurately and gradually in your performer, because that's, it's going to take time to happen. And it's not going to happen in the first month. if you do model that way, it's just going to, over inflate your projections and you're going to be, disappointing your investors.

[00:12:03] Tim Little: Yeah, that's a good point. We don't often talk about the You Additional income aspect and some people just yeah plug it right in as if it's going to materialize all at once

[00:12:14] Justin Goodin: Exactly. Yeah. I see it all the time. One more

[00:12:16] Tim Little: It's obviously not the case, you know with something like you said with the cable, right? It takes time for those leases to turn over so that you can charge the next person that comes in if you make it mandatory that they have their valet trash the same thing There's other things like, reserved parking spaces, where it's, it may be hard to gauge the interest. You can always do a survey of current residents, which, I'd say you should do, to gauge interest, but even that may not be 100 percent accurate. And so you don't want to assume more than you want, like you said, you want to be conservative and say, I don't know, 10 percent less than what you think, people think. People will adopt something like that. That makes a lot of sense

[00:12:59] Justin Goodin: really popular in the value-added space, but. Some operators don't project this renovation timing schedule accurately. again, like they'll project it too aggressive in the beginning, or think that these renovations are going to happen too fast in the beginning. But you know a lot of people won't talk about when you're renovating a unit it's going to take depending on the scope of course, it's going to take several weeks A month just to get renovated. It's going to take more time for it to get released. You know, it's not going to move on day one. It gets renovated It might take another couple weeks for somebody to apply to get moved in and start paying rent. So modeling like that economic loss or that renovation downtime accurately in the beginning I think is really key. Again, it's just another way to over inflate your projections if not done correctly.

[00:13:46] Tim Little: Yeah, and one of the things i've seen over the past like year or two where we've gotten, I'd say I don't want to say gotten it wrong, but That has come in higher than projected in our insurance and taxes and you can get into this, when it comes to development because i'd be curious to know What's going on? The impact that it has there but at least for the value add multifamily space, in a lot of places the taxes and insurance. I mean i'm here in florida. Obviously insurance is a nightmare especially when you have two hurricanes in a period of one month like we did this year But those two expenses have been far above what was in pro formas and that's obviously having an impact On,the overall projections too.

[00:14:33] Justin Goodin: Yeah, things like that aren't necessarily growing that at normal, 2 percent inflation rate that some operators underwrite to but, taxes could grow, 5, 8, 12 percent a year again just comes back to being, under promise and over deliver.

[00:14:47] Tim Little: Yeah. And speaking of the development piece, you talked about how you transitioned over to that one, what prompted that, that transition from the more, I don't know, conventional, commercial multifamily to the development side of things,

[00:15:04] Justin Goodin: Yeah, great question. Yeah. I would say the main reason is that I switched my focus to development and I'm a huge fan of being laser focused on one thing, doing one thing really well. So I transitioned my entire company and brand to only do Class A, multi tenant development here in Indiana. but answer your question. So for a couple of reasons, I think the main reason I switched was because the competition in the value add space, as is just just so competitive. It's just so great. Everybody and their brother is going after the typical, value ad mom, pop type deal. And I went for like a whole year. Just trying to find my next acquisition, like nothing was penciling out. I couldn't find anything worth buying deals from brokers. we're penciling out. mainly just from competition and buyers overpaying prices getting bid up. So I made that decision to go into development because I think there's less competition in the development space and I'll be able to do more volume as a developer, of course there's tremendous competition between developers doing the 200, 300, 400 unit properties and spaces like that. I'm focusing on properties between 50, 150 units, at least like my next, a few acquisitions or projects. but yeah, to answer your question, competition in the value added space is just tremendous. So I think I'll be able to do it. More volume more deals on the development side.

 

[00:16:59] Tim Little: right. And, you mentioned that you're in. Indiana. I don't know if all of your development deals have been there. It sounds like it. Tell me more about that market because that's just not a market that we've heard a whole lot about here on the show. So I'd be curious to learn more about it and what is the pitch for Indiana as a lucrative multifamily development project investment arena? 

[00:17:24] Justin Goodin: one, Indiana in general is just very landlord friendly, very business friendly,Midwest in general has always been a very stable, very consistent market to invest in Indianapolis as a whole.we're in November of 2024. There was a market report that came out a few months ago. Indianapolis is one of the handful of cities in the nation that's still achieving positive rent growth, even right now in this, in this time. very stable, very consistent. Markets like DFW, places in Florida, Charlotte, all those are fantastic markets, right? Those do awesome long term. but, you typically see, more swings in the,fluctuations in the market, in the economy, you just don't have those large shifts here in the Midwest and Indiana in general. But yeah, Indiana, very business, very landlord friendly, very stable. Indianapolis has a population, a little bit over 2.1 million, several, financial or Fortune 500 companies in Indianapolis. it's just been a great place to invest.

[00:18:23] Tim Little: Yeah, that, that makes a lot of sense. Stability is very attractive. We have a deal in South Dakota and it's not one of those markets I would have ever thought of before, but it is my most consistent and boring and the best possible way deal that I have. consistent growth, consistently at 97 percent growth. Plus occupied and there's no giant swings. It's great. and I love it so I definitely see how that would be a plus. I'm wondering about supply though is there a bunch of supply coming online? Within that midwest Area because I know that's been an issue in places like dfw that you mentioned and then in arizona as well Where those places that are hot right everybody Comes in all at once and tries to take advantage of that. And then all of a sudden, come 2024, 2025, they have a glut of supply. They had, they just have, they're going to have too much, which is going to depress rents, occupancy, etc. All the stuff that comes along with it. I'm wondering what the picture looks like, where you're at for that.

[00:19:34] Justin Goodin: That I've seen, construction has definitely been down over the nation the past couple years and deliveries are coming to an all time low right now. Let's take a current deal for as an example, we're developing a project now in Kokomo, Indiana, and the last. A class property that was developed was back in 2017. we're starting our new project in Q1 of 2025. The last competing property was built back in 2017. So yeah, I haven't heard of any supply issues here in Indianapolis or Indiana in general. but yeah, it's definitely been,growing, but I have not heard like any, supply issues

[00:20:10] Tim Little: Awesome. And what do your deals look like structure wise? In terms of whole time, is this like five to seven year holds, seven to 10 year holds? And where are investors inserting themselves on these projects? At the very beginning before you even break ground or is it a little further in

[00:20:29] Justin Goodin: question. So we start raising capital when we have a deal that has been fully entitled, fully approved. We don't start raising capital in the beginning to acquire land or pay for civil engineering or architects. I'd really put that capital at risk before we know we have a deal. We use all of our own capital and money to do all the upfront work. And then when we have a project that's been approved and ready to go, that's when we fully announce it and get investors involved. I'm sorry, what was your first question, Tim?

[00:20:59] Tim Little: no, that's good. And you know following up on that what does that look like in terms of the capital that you have to commit to that up front piece of doing all the I don't know permits and land and everything else Before you even start to raise on a deal, how much have you, approximately have committed on, on those properties?

[00:21:20] Justin Goodin: Honestly, it just depends. I know it's not the best answer, but so I have a unique relationship with some of my different third party vendors,they are willing to do a certain amount of, Let's just call it like free work up front because I, I'm really big on relationships. So like when I have a project, I'm not like bidding it out to all these different architects or GCs or civil engineers, like I have a team. And I plan to use that same team unless there's a significant reason I need to look elsewhere. But yeah, since I have that relationship in that set team. they're willing to work with me to get these projects to the starting line. that involves some upfront work, some initial designs. it's a balancing act, right? But there's certain things we'll do in the beginning upfront for free as a good faith relationship. And then more so when we have a project, they're willing to postpone the majority of those costs until closing. So we try and minimize the cash coming out of our pocket as much as possible. Okay. and roll that to the actual closing date

[00:22:22] Tim Little: Yeah. And I've heard of some developers, bringing part of the team in on the equity side of things. Is that something that you've done in the past?

[00:22:30] Justin Goodin: and meaning what's him.

[00:22:31] Tim Little: Like giving up some of the equity to the other folks that are working on the project, whether it's the construction,that side of things.

[00:22:38] Justin Goodin: Yeah, I have heard of that, but I have not done that.

[00:22:41] Tim Little: Yeah, I just think it's an interesting approach because then they have you know one they have skin in the game from that perspective But more so they had the incentive. so I don't know It's just something creative that I heard that I was curious if you tried but in terms of how the deals are funded You know, obviously you're putting up some up front you talked about the other folks who are involved putting their work into it ahead of time Are you involved with any, private equity or anything like that? up front in terms of funding? No, that's good. I'm not saying private equity is bad, but obviously, the less people that you have to bring into it that reduces risk, you maintain control. So there's a lot of positive aspects to that. That's good. All right.

[00:23:26] Justin Goodin: rundown of what our capital stack looks like on a typical deal. Typically, our construction loan that's on our past 2 projects has come in around 53, 54%. pretty low on the leverage there. And, we work with, we have a sort of unique competitive advantage. We work with different municipalities. So we go to different cities and towns and find a way to partner with them. And with that partnership, we work with them to build the project. And by doing so, like the city or the town actually invest real money and like real capital into the deal. So it lowers our basis on day one. And then the remaining will just be raised from LP equity, just regular retail investors. We have not used any kind of prep for Hermes in the past. And, honestly don't plan on doing so, but that's typically what our capital stack looks like,

[00:24:17] Tim Little: Yeah. And can you explain that a little more? You said the city or the town invests in the deal itself. Are they actually putting capital in or is that in the form of like tax incentives or what does that look like?

[00:24:30] Justin Goodin: with the products I've been involved in, they're putting real money into the project. basically with how, without interest rates are without construction costs today. It's basically impossible to get a deal to pencil on paper, unless the city wants to step in and invest in the project. We all know that. We'll just take a quick example, it might cost us 10 million to build a property.after we pay our architects, the construction company, total project costs can be 10 million. And we know that all apartments and commercial real estate are based on the value of the income it's producing and the cap rate. Let's say because the rent of this property, when we go and cut the ribbon, it might be worth 7 million. Let's just say 7 million. The remaining 7 million, like we'll get 50 percent from the bank, 50 percent from investors. Between that 7 million and that 10 million is like what we call that financial gap. unless that gap is filled in some way, the project doesn't happen. And so that's where we work with the different cities and towns to incentivize that, that gap. otherwise it's really difficult to get a project defense law on paper. Now, of course, there are different strategies out there, building something cheaper, made of vinyl or like no amenities. a cheaper style product, there's things like that. But, in a lot of different cities and towns, they don't want that product in their area, at least that they're going to incentivize it. we're building something very luxurious, a class, high quality. And that comes at a cost, right? It's not cheap to do that. And so by doing so, it requires the municipality to invest in the project.

[00:26:07] Tim Little: Okay. No, that's interesting. I just never heard anyone mention that before. Yeah, I guess I'd like to learn more about what those conversations look like, on how you pitch local community leaders. And I, are you talking to,mayors, or are you talking to, city councils?Who are the people that you're most often interacting with for those kinds of discussions?

[00:26:33] Justin Goodin: Everybody just mentioned the redevelopment commission council members. we are proposing a solution to them, and, giving them a compelling product to where they want to, partner with the developer to make that happen. all these communities we go into, they want and they need a project like that. we're bringing jobs into the area. We're bringing housing into the area. All growth starts with housing, businesses, companies. They're not going to come into a region or an area. If there's nobody living there to benefit from that. So all the growth usually starts with housing like people have to live there to go to these different restaurants and businesses and work there. If there's somebody living there, the city isn't going to grow. This won't come there. But yeah, to answer your question, it all starts with a simple conversation with a town manager, mayor, council members, and just working towards a common goal of getting a project done.

[00:27:28] Tim Little: Yeah, and for them, it's a development play they can say that they're contributing to development within their area providing high quality housing, for, workforce. It sounds like a win, but just a very innovative approach that we haven't heard here before. All right, and talking about development projects, I think some investors hear development and they get a little skittish thinking that there's more risk associated With development because you're starting from zero percent occupancy If you want to look at it that way, if they're thinking about it from the perspective of that more traditional value add multifamily investor. So first, do you agree with that assessment? Development projects are riskier and two. What are you able to do to mitigate some of the risks associated?

[00:28:13] Justin Goodin: I wouldn't say it's riskier. I would say it's just a different, different strategy, different business plan. there's certainly pros and cons to both, but yeah, definitely wouldn't call it riskier. I say like the main thing that we do with our development projects that a lot of people are not familiar with is we do something called a GMP or a Guaranteed Maximum Price. So this is our contracted budget price that we go into an agreement with our contractor, and this is what we specify the project will cost. If it goes above that cost, the contractor is actually on the hook for the overage. So our GMP, or our guaranteed maximum price, is the price that we go under contract with, and if it goes above that amount, the contractor is going to pick up that overage. there's other hurdles that you can work into the contract with your construction company as far as timelines and things like that. if it goes over X months. The contracting company can actually start paying you because your opportunity cost is longer, you're paying interest on your loan, et cetera, et cetera. So yeah, there's some different,say folds you can put in your contract to mitigate that risk of,probably the first thing people think of is, if you go over budget, what happens? But, to save that, we have a GMP in the contract.

[00:29:25] Tim Little: Yeah, that makes a lot of sense. And I know that would be a huge relief to most investors, right? Cause that'd be their first concern. Those cost overruns that can just happen, especially, in environments like this, where prices shot up significantly, whether it was for labor, materials, et cetera. so I know that's something that's certainly going to be on the mind of investors. So having that safety net there would be huge, allay some of their fears. All right we do need to move on to the turbo round. So now I am gonna ask you three questions that I asked every guest that's on the show And I just asked for a quick honest answer. Are you ready to go?

[00:30:04] Justin Goodin: Right.

[00:30:05] Tim Little: All right. First one. What is one red flag every investor should look out for?

[00:30:10] Justin Goodin: One red flag. I would say if a sponsor.speaking from an LP perspective, if a LP is asking a potential sponsor about their background deals, they've done,et cetera, et cetera, about their background. If they get this feeling that the sponsor is trying to rush them or push them off or not answer them. you want a sponsor that's going to tell you the good, the bad, the ugly, take your calls, answer emails in a timely manner. So I think if you get that uneasy feeling when you're talking to somebody, just go with your gut. But that would be a big red flag to me.

[00:30:48] Tim Little: Yeah, if you're getting that vibe like nothing to see here, Then that is certainly a red flag All right. Second question. What is a myth about this business that you would like to set straight?

[00:30:59] Justin Goodin: man, let's go back to the floating rate debt topic. So I have never done floating rate debt. I've done fixed interest rates transaction on every project. I've done every deal I've done. but I think nowadays, the floating rate debt is a big myth that it is super risky And it can be but I wouldn't say that all deals with floating rate debt are bad Like they certainly have a pretty bad image nowadays I haven't done a floating rate loan, but not say I won't in the future but I think a big myth that is that they're all bad. They're all super risky. There are ways to mitigate that risk and floating rate debt can be very powerful, a very, very powerful strategy. there's a number of very large prominent sponsors that only use floating rate debt.

[00:31:43] Tim Little: Yeah, and that's a really good point because so many people are scared of it right now. People have to remember that it's markets are cyclical and you have to take into account Where you are in the market cycle, right? if you're at or near the top of those rates then The likelihood is that rates will go down, not up. Is that a guarantee? No, of course not. There are no guarantees and investments, but it's a really important point that you have to take into account, where you are in that cycle before you pass automatic judgment on whether something like a floating rate is good or bad. All right. Last question. What does success look like to you?

[00:32:23] Justin Goodin: Yeah, success to me looks like having time freedom. I think that is the ultimate goal, the ultimate measure of success is just having time freedom. Being able to wake up every day, like, when you want, do what you want. For me, that's like why I do what I do, like what I'm working towards now, but, having time freedom is building a measure of success.

[00:32:41] Tim Little: Yeah, absolutely. And we hear that so much here. All right, Justin. Hey, this has been awesome. Please tell our listeners how they can get a hold of you. And if there's anything else that you'd like to share with them.

[00:32:51] Justin Goodin: Yeah. Thanks for listening. You can find out more on the website at goodindevelopment.com on the home page there. I have a free seven day passive real estate investing one on one email course right there on my home page. And you can also follow me on LinkedIn at Justin Goodin.

[00:33:04] Tim Little: All right. we'll have all of that stuff in the show notes, Justin, thanks again for coming on. And I look forward to continuing to see you do big things on your journey to multifamily millions.

[00:33:14] Justin Goodin: Thanks Tim.

[00:33:15] Tim Little: Thank you.

 


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