Real estate development is a crucial process in the industry that creates value for the property. That’s why as an investor or syndicator, there is a need to have at least an idea of the processes of development. In today’s Highlight’s episode, we look back at our conversations with Edward Orasi, the market director at Keller Williams in Las Vegas, and Scott Choppin, founder of The Urban Pacific Group of Companies.
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Edward stresses the importance of surrounding yourself with the right, well-connected and knowledgeable team. He also said that it is necessary to do thorough due diligence before proceeding with the development to ensure its efficiency both with time and money. Meanwhile, Scott shares the criteria a property should meet before they would consider getting involved. He also discusses how developers can best prepare for the downturn. Learn more about the world of development by joining us!
Key Points From This Episode:
- Some of the challenges Edward has faced moving from multifamily to development.
- The importance of wrap-around insurance during development.
- What the permitting process in Las Vegas looks like.
- Why is it important to work with people who are well-connected if you are a developer?
- Edward shares the due diligence process that is required for his 160-unit development.
- How does Scott approach the 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.
“You have to surround yourself with a good team. I think in anything that you do in real estate, whether it’s investing, whether it’s learning, it’s — surround yourself with a good team.” — Edward Orasi
“So part of our due diligence, we’re looking at the land itself, what’s on there? We’re doing this phase one environmental, phase two environmental. Making sure we have the environmental studies that we need.” — Edward Orasi
“So that market cycle does influence what deals work best. So we just look at it from the standpoint that we know when that happens. Now, on a long-run basis, we know that a recession will come, and what we’re anticipating and one of the reasons we like this workforce housing model is because our tenant base is very sticky is the way we describe it.” — Scott Choppin
“So our preparation (for a downturn) is predominantly revising the financial structure of how we raise equity. So typically, when the market is rising and in good shape, and we’re looking for a recession that may be two to four years out, we would complete a project, lease it up, and sell it. So build it around itself. That merchant build model is what I call that.” — Scott Choppin
Links Mentioned in Today’s Episode:
About Edward Orasi
As a child, Edward drove around with his mom looking for properties to buy and to collect rents. He was always studying the market, finding the diamonds in the rough. Come 2003, Ed got officially licensed in Miami and within a year went on to become the top broker at his firm. In 2011, he then got licensed in Las Vegas and went on to become the market director at Keller Williams in 2017. Last year, he opened an office in downtown Las Vegas and is currently working on a 160-unit condo project. His focus is primarily on multi-family and developments, but his real estate team does do residential and smaller units. He is a tenacious, hard worker who puts in 70-hour workweeks, while still making time for his family and sports.
About Scott Choppin
Scott Choppin is the founder of The Urban Pacific Group of Companies. He is a real estate developer of highly undersupplied multi-generational urban housing for families. Scott produces investor opportunities in the long-term to hold new construction investments in high-demand urban metros. He has been married for 26 years to Becky, raising 3 kids.
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