Why August Is the Perfect Time to Review Your Real Estate Strategy
As a passive investor in multifamily real estate, you’re embarking on an exciting journey that can lead to significant returns. But what exactly happens between the moment you invest your capital and the day you start receiving rental income?
At Goodin Development, we believe in transparency and education. That’s why we’ve created this comprehensive guide to walk you through the typical timeline of a multifamily development project.
Understanding this process will help you set realistic expectations and appreciate the complexity of bringing a new apartment complex to life. Let’s break down the major phases you can expect in a typical project.
The Beginning
Let’s start from the very beginning. Our team at Goodin Development is busy behind the scenes searching for the perfect site location, making offers, working with civil engineers, architects, and more.
Passive investors are not involved in this process. We do not raise any capital from investors for upfront due diligence costs, architects, or other third party companies in the beginning. We only raise capital from investors when we have all of the required permits and approvals from the city. This eliminates project risk to our investors!
Notification
This is when passive investors come on board.
Once we have a project opportunity that has received all necessary approvals and permits from the city, we notify our investors by sending a mass email to our investor list. Be sure to join our investor club so you can be the first to know when we have a new passive investment opportunity.
In this email, we typically include details about the project, our webinar date, our projected closing date, and more important details you can take to participate in the investment offering. We’ll present you with detailed projections and everything you need to make an educated decision.
Pre Closing (1 – 3 Months)
This is the period of time after we notify our investors of the new investment opportunity and before the official closing of the project. Typically, this period of time can last anywhere between 1 and 3 months.
Goodin Development is behind the scenes talking to investors, arranging financing with the bank, and coordinating the closing.
Passive investors usually have between 1 and 3 months to make an investment decision and wire in their funds. Each offering is on a first come first serve basis.
Construction (12-24 months)
Now the physical transformation begins. Over the next year or two, you’ll see:
During construction, we provide monthly updates to our investors. Our team at Goodin Development handles everything. You as the investor can focus on your career and spend time with your family. This is the power of being a passive investor!
During this phase, it’s exciting to watch the project take shape.
Leasing and Stabilization (6-12 months)
As construction nears completion, we start the leasing process:
The goal during this phase is to reach “stabilization” – typically defined as 90-95% occupancy. This is a critical period as we transition from construction to ongoing operations.
Refinancing or Sale (12-36 months after completion)
Depending on market conditions, we may choose to:
This decision is based on market conditions and the overall performance of the property.
If we choose to refinance the property, the process could take around 3 months to complete. We would then hold the property, make quarterly cash distributions to investors, and aim to sell the property at optimal market conditions.
If we choose to sell the property, this process could take 3 – 6 months to complete.
What Does This Mean for Passive Investors?
As a passive investor with Goodin Development, here’s what you can expect:
The Big Picture
At Goodin Development, we’re building communities from the ground up and you get to watch it happen every step of the way.
As a passive investor, you get to be part of this exciting journey without the day-to-day stress of managing the project. We handle the complexities while you sit back and watch your investment grow.
Conclusion
Understanding the timeline of a multifamily development project helps set realistic expectations and appreciate the value creation process. At Goodin Development, we’re committed to guiding our investors through every stage of this journey.
Remember, while real estate development requires patience, it also offers the potential for significant returns and the satisfaction of being part of creating new homes for hundreds of families.
Are you ready to be part of the next exciting multifamily development project? Let’s connect and explore how you can invest in quality housing and potentially strong returns.
