All Forum Posts by: Justin Goodin

@Justin Goodin This is honestly the most reckless apporach to real estate debt I've heard in some time. This is how bank originated debt works in the apartment scenario you describe: The lender collects their origination fees and debt service payments are then collected priorty every month until the loan is paid off. If there's a correction in the market, guess what? The loan you originated still must be paid in full. If rates unexpectedly increase and the loan term is coming due, guess what? You are showing up with a check to refinance the loan. If you experience vacancies, guess what? That monthly payment is still due. If expenses increase, guess what? That monthly payment is still due. You clearly don't protect the downside with your approach to originating debt. This is the recklessness that's getting a ton of apartment syndicators in trouble right now. Debt if used responsibly is a valuable tool but to say debt will always multiply returns is the wrong message to spread in these forums where there's a ton of readers who are inexperienced investors and will fall for the trap of following your flawed approach to originating debt.

If you need additional help understanding how debt works in real estate, please send me a DM and I would be happy to help you out. It’s clear that you completely do not understand the point of my post. Best of luck to you!

0 Votes

Quote from @Chris Seveney:

Ask all the syndicators right now how debt is working out for them? In can multiply returns but what everyone also fails to mention is it can also multiply losses.

Now I am not opposed to debt but there is smart debt and bad debt.

This is also my issue recently on BP. People forget to mention risk in every conversation. If you ask any HNW individual they are never about multiplying returns - they are concerned with preservation of capital first and foremost.

This is also why many investors never achieve HNW, they want to get rich quick and get as much money as fast as possible and they never get close because they do not know what they do not know, which involves the risk in real estate and especially syndications.

ok I will step off my fake podium and go back to work.

I knew there would be at least 1 person who would bring up the current events 😅

Too much of anything is bad. Too much vitamin C is bad.

Of course there’s risk with debt. There’s risk with buying properties in cash too. Debt is a powerful tool. But I agree with your post overall.

0 Votes

Investment Info:

Large multi-family (5+ units) commercial investment investment.

Purchase price: $32,000,000

Ground up development in the Indianapolis MSA.
- 85 units
- 12,000 sqft of Office
- 5 commercial suites

0 Votes

Debt increases risk

So why do investors love using it?👇

Debt, when used correctly, is one of the most powerful benefits with real estate investing.

We can take $3.5M of investor equity
↓
And purchase a $10M apartment community.
↓
The bank receives a fixed rate return
↓
And the investors keep all the upside!

Because of this, debt will always multiply returns 📈

We don't follow Dave Ramsey's advice on this topic.

What are your thoughts about using debt to buy real estate?

0 Votes

10 years ago people said:

"There's no good deals out there."

2024: "There's no good deals out there."

My prediction for what people will say 10 years from now:

"There's no good deals out there."

Great deals are tough to find in any market cycle.

Multifamily is a competitive asset class for a reason!

✅ Investors understand how stable, consistent, and lucrative apartments can be.

Stay patient and disciplined in your search.

Here's how 👇

1. Only buy in high growth markets.

2. Underwrite with realistic projections.

3. Only buy stable, cash flowing deals.

4. Choose smart debt terms.

What would you add to this list?

2 Votes

Indianapolis, Indiana

Quote from @Shango Collier:

Quote from @Justin Goodin:

Quote from @Shango Collier:

Hi Justin, did you do the work yourself or contract out? It looks great btw :)

Everything is done with contractors. This wouldn’t be my expertise!😬

That’s neat! Would you mind recommending your contractors to me?

What project do you have going on right now?

0 Votes

Indianapolis, Indiana

Quote from @Melanie P.:

What does Kent Ritter have to do with this project? Is it fair to say that Next Level Equity has no interest in this project either?

You say, "I spent..." but in other threads claim to have raised $500k from private investors for this project. What entity raised this money? How were the funds used?

I think it’s so funny I have an online stalker 😂😂

2 Votes

Indianapolis, Indiana

❌ Stop dividing the NOI by a cap rate to find the value of a deal.

When I come across a potential deal, that's the last thing I do.

It's pointless

→ I want to evaluate how the property is performing NOW

→ Where it COULD BE performing

→ And WHAT it will take to get there.

This involves (at a minimum) checking comps, creating a 5 year proforma, verifying taxes & insurance, and making assumptions about the business plan.

You can't determine if a deal is a pass/go simply from NOI / Cap Rate.

The art of underwriting involves finding value where others miss.

If you're passing on deals just from dividing the in-place NOI by a cap rate, send those over here! 😅

0 Votes

Indianapolis, Indiana

Quote from @Kyle Poirier:

Love the look of the dark vinyl plank. What brand were the washer/dryer? $400 is a geat number, were they new?

Brand is the heat pump? Love the heat pump systems - though in our experience, they can be very pricey to repair. This is usually tied to the quality of the install.

Used washer and dryer. The heat pump system was installed by a small local contractor.

0 Votes

Indianapolis, Indiana

Quote from @Shango Collier:

Hi Justin, did you do the work yourself or contract out? It looks great btw :)

Everything is done with contractors. This wouldn’t be my expertise!😬

1 Vote

Indianapolis, Indiana

All Forum Posts by: Justin Goodin

Justin Goodin has started 180 posts and replied 968 times.

Post: Debt increases risk. Why use it?

Post: Debt increases risk. Why use it?

Post: Mixed use development in Indy

Post: Debt increases risk. Why use it?

Post: 10 years ago people said this about real estate

Post: I spent $33,836 renovating this apartment unit.

Post: I spent $33,836 renovating this apartment unit.

Post: 👋 NOI / Cap Rate is Pointless

Post: I spent $33,836 renovating this apartment unit.

Post: I spent $33,836 renovating this apartment unit.