Why Strong Relationships Drive Success in Real Estate Development

Scott Choppin (00:00)
There is no business without other humans. Now we can argue about AI and we’ll see where that goes. But at the end of the day, human beings have intentions. They have ambitions. They have how they define a good life. How do I produce a business to take care of my family and live a good life? ⁓ And so my entire ⁓ business

⁓ you sort of how I do business and who I do business with, it’s all based on the relationships with those human beings. Like I can do nothing but that.

Quentin (02:04)
Hello, everyone. Welcome to the Real Estate Pros podcast. I am your host, Q Edmonds, and I am excited to be here today. I have another fantastic guest who have coined some amazing phrases, but they’re more than just phrases. They’re strategies that are really

been helping him and I believe if he shared, it’s going to really help you. And so I know he’s probably going to talk about strategy plus execution. Can’t wait for him to break that down. One of them that really caught my eye caught my really, really made like sunk into my brain when he said that getting the signal from the noise. And I hope he expand more on that because when I hear that, that just opens up my mind to so many possibilities. And so I am sincerely welcome.

and happy to welcome Mr. Scott Choppin. Mr. Scott, how you doing today,

Scott Choppin (02:55)
I’m doing great, Q. Great to be here with you.

Quentin (02:57)
Absolutely, man. So glad to have you on. And listen, I’m the type I like to dive right in. So I would love for you to tell the people what your main focus is these days. Mr. Scott, if you can give us a little bit of an origin story, kind of how you got to where you are now. We love the hero’s journey. And then if you don’t mind telling them what part of the world you’re in, people seem to love to know where people are geographically. so, Mr. Scott, so you have the floor.

Scott Choppin (03:18)
Yeah, it’s good to know. Yeah,

we’re based in Southern Calaifornia. So I’m at the very southern end of LA County, right at the Orange County border. Basically native. My kids are fourth generation. In fact, we’re in the city of Long Beach is where we live exactly. And my kids are four generations. So we’re we love California. Love being here and you know, great to be here with you today. So what we are, we’re a real estate development company.

And we do two things primarily one ⁓ and our really our main priorities were a developer of workforce housing, new construction, apartment buildings and projects. And specifically we created the innovation we call urban townhouse or UTH for short, which is a five bedroom, bathroom workforce housing rental ⁓ project and unit type.

And our primary sort of ethical and mission focus is to house middle income working class families in Southern California. I don’t think it’s going to be any great surprise to people throughout the United States that California is a like a, know, hardly hardcore pressed affordable housing market, meaning we don’t produce enough supply and families and renters are under pressure and our salute, our UTH is a solution to that. And then the other part of our business is we provide development services.

to third parties, anybody who needs to undertake a development project, be it a landowner, building owner, business owner, who needs to basically develop and build a building, maybe it’s for their own use or they need to develop it to sell it, will come in and provide basically turnkey or fractional development services to those different folks to help them enhance the value of their properties to sell it or use it as a business if they so do so.

Quentin (05:54)
Yeah, yeah, absolutely love it. How did you get into space? is the origin story? How did this become your focus?

Scott Choppin (06:01)
Yeah, right. It’s a great question. So nobody chooses to be a developer when they are five years old. That’s not the standard career choice. And so like lots of people who choose that business, I had some association with it. For me, was my family was and is in the business. My dad, Kerry, and my uncle Mike were both developers on their own right. And so I grew up around development and developers.

I wasn’t in the business when I was younger, at least in those two businesses that they created. But it did basically educate me and least demonstrate to me at some level, even though I was young, what a developer was. And when I graduated high school, I didn’t necessarily have a specific career plan at that point in time. I graduated in the mid-80s from high school.

⁓ was trying to figure out what I was going to do. I actually went and worked in the electrical trades, for a handful of years, through some connections I got through my dad. ⁓ actually working construction on apartment buildings in the late eighties. ⁓ and the origin story is this, is that although I didn’t choose to be a developer, you know, right out of the gate, you know, graduating high school and went and worked in the trades, working on apartment buildings sort of gave me a great understanding of how those projects came together, like how how you physically build those buildings.

But here’s the great story for this, Q, is that when I was working, I would see the developer of that building, whoever that was, pull up, right? ⁓ And walk the site and do what developers do. You’re pointing at stuff and you’re telling people what to do and you’re looking at plans. But what I knew was I knew what a developer looked like, because my family background gave me that understanding.

And notably by that point in time, I had worked in the trades for a couple of years and I knew this wasn’t for me. I mean, I did electrical work, which is a great trade. Use your brain. It’s clean trade. Great place to work. But I also knew this was not for me. But when I saw that developer or developers that I saw over that period of time, I was like, okay, I see, I want to do this. now like light bulb went off in my head. go, this is what a developer does in part.

And to me, what appealed was that they were the boss, right? Like they ran the show. This was their deal. You know, they were, you know, they were the leader, maybe you would call it, you know, and by the way, they got to dress in nice clothes and drive a nice car, right? Like that was, you know, for an 18 year old, that was appealing too. And then what finally cemented that career choice was I’m I’m a voracious reader and I read a ton.

Quentin (08:37)
Yeah.

Scott Choppin (08:45)
At 18 years old, I was reading every book I could get my hands on related to real estate and business. And I happened to read one of these sort of classic 50s era real estate investment books, how to make a million dollars working in real estate on the weekends. That was literally the book. And it was really, it’s a pretty simple book, but what it showed me Q was like how to do deals.

you know, buy something at a discount, improve it and sell it for higher value, right? Like, you know, buy low and sell high, right? As simple as that sounds. And that, I had an epiphany through there. was like, finally I was like, okay, I understand what my dad and my uncle Mike do, which is they buy land, they improve it and they sell it for more at the end. And so that, you know, sort of combination of a couple of years sort of came together finally to get me, you know, went to college.

I got a finance degree and then entered into the professional development space really to learn the business for the first few years and then go out on my own.

Quentin (09:46)
Sir, thank you, man. Thank you for telling us what it is that you do. And also thank you for walking us up to the origin story, walking us through the path. And I loved hearing it from you. I’m sure people loved hearing it from you.

And if people, they’ve been watching me, they know where I’m about to go. Because as you was talking, I was actively listening and I was actively writing. And so I just want to literally just reiterate some things that you said, right?

And I’m doing it for a purpose because I’m going say and make a statement to ask you a question. But I’m native Californian, I’m hoping I’m saying that right. ⁓ Workforce, we went into the workforce housing, created the UTH. ⁓ You specialize in housing medium income workforce. The family business, that’s family business of developers. You grew up around developers.

I didn’t have a specific niche kind of carved out coming out of high school. So you just did some trade work, electrical work. Then you went and got your finance degree and all these different things, all the amalgamation of what you are now. Right. And so, Mr. Scott, I say a statement that destiny has no wasted moments.

meaning no matter what we’ve been through in life, we’ve been building up to the moment where we are now. The journey has kind of led to where we are. We borrow from the mindset of the journey. The journey has taught us perseverance, all these different lessons. So I would love to know throughout your journey, what has the journey taught you about yourself? Has it taught you discipline, resilience? What has the journey taught you about you, Mr. Scott?

Scott Choppin (11:51)
you

Yeah, I would say the main lesson I’ve taken from that is like I didn’t build this or maybe the journey built this, but I’m like hyper resilient. Like I went through 2008 and that was probably the most like sort of the hardest process I went through, know, trial by fire, crucible, however you want to describe it.

And look, know, being a developer is not like I had an attorney friend when I told them what developers do and the risk we take is like, gosh, this business is not for the faint of heart, is it? I’m like, yeah, that’s a good way to put it. And you know, going through the hard times ⁓ teaches you like your capability. And you know, like I’m not a, I’m not a guy who says, you know, the DNA makes the person or, you know, I think there’s lessons to be learned in the journey that you do that.

But I do think at some level that people have the personality to be resilient and tough, gritty, as my sister calls it. And that’s true. And so I think it’s taught me how gritty I really am. ⁓ And I might have chosen not to have to go through the parts of the process that made me as gritty as I am, or maybe I was already that way, or the combination of it. But I think at the end of the day,

That’s the one lesson I learned. And then the other lesson I’ll learn and I’ll make this relatively quick. As I’ve been doing this a long time, I started to help people. I have sort of a Christian values background saved when I was 14. And I really have come to the conclusion that I really like to help people. Like I help people. I’ve always helped people. Like that’s always how I’ve been. But it came to me several years ago.

that in the real estate space, in fact, this is why we created this developed services arm is that like, I, we’re really good at helping people from a strategy and tactics and execution standpoint. And I love to do that. Now we do it for our own projects. Like we solve our own deals and then now we serve others. So I think that sort of the grittiness and resilience building or existence plus building plus the, you know, the great strategy and like, we’ll talk about more. That’s where the strategy plus execution philosophy came.

Quentin (14:09)
Yeah. ⁓ thank you, man. Thank you for your reflective answer. Thank you for the content, the context and content within your answers. And I love how you talked about the Christian value, helping people. I always say at the, what I believe at the foundation of any sustainable business is servitude. And I like to back it up with scripture. There’s a scripture Proverbs 11, 25. It says, when you refresh others, you in return will be refreshed.

And so when you serve people, when you refresh people, you in return, you have to be refreshed. And for you, people like you and me, we just believe it is a biblical rule. Like it’s, it’s, it’s it’s in scripture, it’s a kingdom philosophy. And I tell people, listen, if you ain’t even a Christian, try it. Try, sow that seed and see if, and see, see if I’m wrong. See if it won’t come back to you.

Scott Choppin (15:02)
Right?

Quentin (15:44)
And I love what you said and thank you again.

Scott Choppin (15:45)
Right.

Quentin (15:49)
for such a reflective answer. I ask that question all the time of the people that saw him because I tell people at the foundation and the center of any business is you, it’s you. So how about reflect back and see why you do what you do? What is your why? What is your passion? And sometimes when you can trace the tea leaves, you can say, ⁓ yeah, this is why I do this. Because some people, they be of course, they didn’t forgot why they did it. And so again, thank you for the reflective answer. I appreciate that.

Scott Choppin (16:17)
I’m happy

to.

Quentin (16:21)
Urban specific. I don’t know why I can’t get my Pacific right. wrote the enunciation, but tell me what’s the next real goal for you? What are you looking to solve with scale next? What’s next for you guys?

Scott Choppin (16:26)
you

Yeah.

So it tracks with our two main focuses in the business that I spoke about a minute ago. And, you know, in the in context of this UTH ⁓ portfolio platform that we’re building, we want to build

a whole bunch of these units for families. And again, goes back to sort of the values that I have, like our mission focus and although we’re a for-profit company is to help families. Now we rent to roommates, we’ll rent to corporate users. So we’re like, we still have to practice good business and good profitability. But I want to build a portfolio of these UTH projects. And so like, as we talked about earlier, we’re really ambitious and enthusiastic about the Opportunity Zone, CalPRO program, which is a tax incentivized.

investment model that was created in 2017 through the 2017 tax act when Trump first came into the office the first time. It just got renewed and made permanent in the one big beautiful bill and yet another Trump act. And I think that’s going to be a great combination of social impact, which our workforce housing is, know, housing families and this great tax incentivized model. And as I spoke about earlier, we want to build a portfolio of 5,000 of these UTH units.

in California predominantly, although we certainly can go out of state if we wanted to. And then the other part is, you know, I’m expecting to build this development services arm. You know, we want to build that to probably about 70 projects a year. You know, we’ll build staff. We have a small staff now, but we’re growing that business. And why I do both is that basically the development side is the high risk, high reward part of the business.

know, capital constraint like we talked about, we’ll talk more about that. But the development services side is all fee based. And so I have a good combination. Again, this is sort of good business practices like we talked about before. The development services basically sort of takes care of the overhead and keeping the lights on, which is always a question in the development world and gives us the capability to focus on these long-term hold, you know, workforce housing assets without the combination of the two.

You’re having to do whatever the next deal is you can do to produce that next profit slug or fees that are generated from those businesses. So I got tired of basically boom bust. That is the business inherently, ⁓ but doing this development service is growing that into its own full-fledged business. In fact, our expectations will have nationwide offices, probably in every major metro in the United States, basically doing development for other people.

Quentin (19:06)
Yeah, I love it. Well, listen, let’s talk about the capital constraints because I’m going to move this a little in another direction. But before we do that, I want you to hit that point, please.

Scott Choppin (19:16)
Oh, about capital constraint. Yeah. As we talked about before, you know, look, since 2022 and interest rate, you know, went up the most rapidly they have ever gone up in history. Um, it basically killed off pretty much every income producing property type. know, certain were certain, you know, types were hurt more than others, but anything that was income producing retail, industrial, know, commercial office, hotel, multifamily were all affected.

in their own way and affected in different ways. And then geographically they’re affected. you know, I think we’re in the most, at least in the multifamily ground up space that we’re in, in our workforce housing model, in the most capital equity constrained marketplace that I’ve ever seen, even worse than 2008. And that really basically, that entire market crash, you know, post 22, so 22 into 23 through 24, and now, you 25, 26. I think we really are at the bottom.

I saw a statistic tape from a guy named Jay Parsons, who’s a well-known economist in the multifamily world, that we finally, you we went from here on production, you know, like if you’re looking at a graph and went right down to here, and finally it looks like his body made out, right? And this is where we talked about signal from the noise. You know, I’m always looking for what is the signal for the economy. And I mean, economy of multifamily projects, the economy of regions, California.

United States and then the macro economy, right? I think nationally or even globally, right? And so I think we’re at the bottom of the capital constraint. We’re at the bottom of production of new housing. Like we’re at the lowest rate of production in several, several years, probably since 2008, even probably lower than 2008 in the multi-world. So what all that adds up to is that most equity investors are not in the market. They’ve pulled out of the market.

⁓ Equity is always constrained in the development space. That’s just a standard sort of part of development. It’s, you know, there’s never enough capital to do all the projects that we or any developer would want to do. ⁓ And so we’re basically looking forward to, you know, recovering that space, both in unit production, the unit production will be, you know, made possible by equity returning to the marketplace. And I’m looking forward to that over the next two to three years.

Quentin (21:37)
So well stated, so well stated. I’m going to throw out a word to you and I’m gonna love hearing your feedback on this, especially, you know, just with the servant’s heart. So I’m throw out a word and you tell me what resonates when you hear the word, okay? The word relationship. What resonates with you when you hear the word relationship, Mr. Scott?

Scott Choppin (21:56)
Yeah, you and I talked about a little bit ago, I’ll basically, it’s the same word, but I’ll call it networks. And I don’t mean networking, although that’s part of it, but networks of human beings. So we talked about the person I learned business from, which is a named Toby Hecht. And he ran a company called the Aji Network, AJI. And he always had this great way of talking about business. He called business as really human business.

Quentin (22:02)
Mm-hmm.

Scott Choppin (22:23)
We do transactions and we do business and we build relationships with other human beings. And that is fact is the only way that we do

There is no business without other humans. Now we can argue about AI and we’ll see where that goes. But at the end of the day, human beings have intentions. They have ambitions. They have how they define a good life. How do I produce a business to take care of my family and live a good life? ⁓ And so my entire ⁓ business

⁓ you sort of how I do business and who I do business with, it’s all based on the relationships with those human beings. Like I can do nothing but that.

Cause if I don’t, then business won’t happen. There is, it doesn’t exist. And so my, my entire learning is since 2012, the entire way I do business, the creation of these five bedroom apartment units were all come from that taking care of people’s

you know, what they care about, like let’s call them human concerns. You know, you have a concern for taking care of your family. I have the same concern. have a concern for, you know, having happy employees. And I have a concern to meet my, my spiritual ambitions and take care of people. But those all come from the same place, which is things that I care about. And I want to make sure happen. And then my business and my personal life, but really my business has to be organized around those to take care of them effectively.

And the way we do that is when I help you take care of your concerns, you in turn take care of my concerns. That’s the human transactional relationship basis. And if I don’t help you well, then you can’t or won’t help me back well. And that’s not to say you don’t want to, but if I can’t produce enough value for you, then it may be that you have to do the value production with another human being. And so my competitive stance.

by strategic stance, the execution part we talked about, those are all come from taking care of those human concerns, mine and theirs, ⁓ in such a way that basically people want to transact with me, they trust me, they want to do business in the long run, and I pay them and they pay me a lot of money, and that’s how I take care of my family and live.

Quentin (24:37)
So well said. So well said. I know the word relationship because that’s the most common entry point into talking about, you know, this give and take, right? I love the way you laid it out. And a word I actually often use is actually community, right? Community is common unity. People in common unity together, moving something forward, you know, doing different things.

Scott Choppin (24:38)
You

Cough

Quentin (25:01)
but moving something for it. Uniformity is everybody doing the exact same thing, but unity is people doing different things with the same goal in mind. And if you just think about the community you live in, is, I mean, different communities are different, but within a community, you have the grocery store, you have the gas station, have things that you need to do fair trade for, you pay for, you get a service for, but it all enhances your community. People mornin’ grass.

I might have to come to you and say, hey Scott, you got some sugar I can borrow? Like it’s the common unity together. Like quick story, we had a snowstorm here. We got 16 to 21 inches. And so the guys, I was out there shoveling, you know, to get my car out. And then we have a bunch of single women around us. So the guys that was out there shoveling for our families, we started taking care of the single women, shoveling them out. They were so shocked and surprised, you they was leaving gifts at my doorstep.

That’s the common unity element. I got the strength, I got the brawn. How about I go out there and do that? And then in return, they gave me some gifts that I absolutely love. And so that’s what it’s all about. You buy stuff, you sell stuff, but it’s all in a communicative type approach to make our community better, our states better, our country better. So if anybody had the same mindset, it’d just make things a better place.

Scott Choppin (26:28)
Yeah,

and all ad community is made up of human beings. So back to that, know, it’s all related to those, you know, to those other people that take care of those other people. I love it. I love what you’re saying.

Quentin (26:40)
Listen, this is the mic, Mr. Scott. That’s that mic drop moment. It’s all and interactions. Listen, if someone wanted to reach out to you, connect with you, collaborate with you, learn more about what you’re doing, how can they get in contact with you,

Scott Choppin (26:42)
Yeah.

So the best way is just to go to our website. It’s urbanpacific.com. So real simple, urbanpacific.com. There’s a contact page there. The other way people can find me is on the real estate Twitter ⁓ in that world. There’s a great group of people in the real estate, all kinds of developers, investors, vendors.

So just look at @ScottChoppin on X.com, not Twitter anymore. You can I’ve been on there a long time. I still call it Twitter. X.com. And just DM me or send me message or send me a post on there. I’m on there every day.

Quentin (27:23)
Gotcha.

Absolutely. Well, Mr. Scott, let me say three things to you sincerely. I do. I admit I say this at the end of every podcast, but I do mean it sincerely when I say it. So first, thank you for your time. I mean, you could have been doing anywhere in the world, anything in the world, any place in the world, but you’re here. I believe time is our most precious commodity. I think what we do is to actually get our time back, to have options on what we decide to do with our time. So thank you for your time. Secondly, thank you for your narrative. Thank you for your story.

I believe stories have way of cutting through to the soul and planting seeds that somebody can come and water and it possibly just takes off and grow. But our stories planted the seed, gave them the idea that kind of connect two points. So thank you for your story. Lastly, thank you for your mindset, your perspective. I believe you have paid for in money and in experience, the way you think to get this mindset that you have.

And thank you for bringing that mindset to this platform. I greatly appreciate you, sir.

Scott Choppin (28:34)
Happy to be here with you.

Quentin (28:35)
Absolutely. listen, y’all heard Mr. Scott, he got the nuggets. Look in the show notes, get in contact with him. His information is in the show notes, but definitely make sure you subscribe here because I promise you, I’m going to continue to bring up amazing people just like Mr. Scott. So sir, I say thank you again and everyone else. have a fantastic day.