152: A Unique Solution To A Hard Problem with Scott Choppin

Aug 31 2023 • 53 mins

How do Urban Townhouses, with a demand for 47,000 units, provide a solution to Southern California's housing shortage?

Scott Choppin is the founder of Urban Pacific Development, a California based company that has created a unique and profitable way to use private capital to solve the housing crisis. In this episode, he covers housing trends, innovative solutions, and his philanthropic endeavors. He also highlights the shifting American dream towards a "lock key and leave it" lifestyle for millennials and baby boomers. Introducing Urban Pacific's Urban Townhouse (UTH) concept, he tackles affordable housing for multi-generational families. Scott's commitment to workforce housing is evident through Urban Pacific's use of private equity and Opportunity Zone capital. He extends his impact by aiding churches and mentoring budding real estate professionals.

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[00:00 - 09:28] Creating Value and Amplifying Life: Meet Scott Chopin of Urban Pacific Development on the Real Estate Runway Podcast

Scott's family background in real estate development inspired him to pursue it as a career
He worked in the electrical trades for a few years before reading an old 1950s real estate investment book that played a pivotal role in Choppin's journey, introducing him to the essence of deal-making in the sector
Both Chad and Scott discuss the concept of "value add," emphasizing that real estate development can be viewed as the ultimate form of adding value

[09:29 - 22:52] Navigating Investments, Development, and Economic Cycles

When comparing value-add investments to ground-up builds, Scott described a three-bucket method: underwrite, develop, create value
In development, there's a period where there's no cash flow because there are no renters and no income stream, essentially a 100% burn rate. However, the eventual rewards can be significant
Post-2008, Scott highlighted the need to track and adapt to economic cycles in long-term real estate projects
With rising interest rates, the lending environment for real estate is evolving, underscoring the value of real-time market updates

[22:53 - 32:27] Rental Trends, Affordability, and Innovative Solutions

Scott highlights the enduring significance of shelter as an essential human requirement
They explore how the traditional American dream is evolving towards prioritizing lock-and-leave rental lifestyles for greater convenience
Scott discusses the prevailing shortage of housing, particularly affordable options, emphasizing the demand-supply gap
The concept of "urban townhouses" designed to cater to the needs of multi-generational families, providing spacious rental units tailored to modern lifestyles is emphasized

[32:27 - 42:28] A Paradigm Shift, Demand Surge, and Private Capital Commitment

Scott emphasizes the changing notion of the American dream, driven by the appeal of "lock key and leave it" lifestyle
Scott introduces Urban Pacific's innovative solution, the Urban Townhouse (UTH) product, to provide affordable workforce housing, making a positive impact on communities
With demand at 47,000 units, Scott highlights the UTH model's potential in tackling Southern California's housing supply challenges

[42:29 - 51:08] Real Estate Challenges and Philanthropy

Scott's creative problem-solving ability is his superpower, honed through a balance of optimism and conservative thinking
He contributes to philanthropy by helping churches and religious organizations solve real estate-related issues
Scott's commitment to giving back includes mentoring individuals interested in real estate development
His newsletter, "The Real Signal," provides insights into real estate and macroeconomics for subscribers

Quote:

"What we are is that we're at the equilibrium point where we're basically maximizing the revenue as a function of cost." - Scott Choppin

Connect with Scott through

LinkedIn,

Tw: @scottchoppin

visit http://www.urbanpacific.com

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Real Estate Runway Podcast is all about alternative business and investment strategies to help you amplify life, and maximize wealth! Click here to find out more about the host, Chad Sutton.

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