Why Build-to-Rent Duplexes Are Changing Indianapolis Real Estate

Remember this, we're investing for the long term. Talking to the town manager and asked him about their 10-year master plan and what their projections were, what they wanted to do. While we're talking to him, we said, "Hey, we're building a duplex product." He said, "Let me stop it. I've just recently seen some online. Let me show you what it looks like." So, he took his computer and turned it around. And of course, Kevin and I looked at each other and kind of grinned because it was our product. Welcome back to the Roots Podcast. I am your host Tyler Lingal along with my co-host Max Moore with Roots Realy Co. Today's guest we have on the New Real Estate Group. We have on the founder Ed New as well as top sales broker Ryan Cheek. So we're sitting down with the powerhouse duo behind New Real Estate Group. New Real Estate Group is a development firm reshaping the landscape of Indianapolis through infill residential project projects in build to rent new construction primarily duplexes and multi-unit assets in high growth neighborhoods. Since 2006, Ed New has led the charge with a vision for sustainable development that aligns with public and private investment trends across the city. Joining him, of course, is Ryan Cheek, a friend, but also a top producing agent who's leading land acquisitions, and driving investment sales across the state. In just nine months, Ryan has closed over 6 million in transactions. Good for you. We're going to dive into development strategy, investment trends, and what it takes to build a real estate business that creates a lasting impact. Thanks for coming on, you guys. Appreciate you having us. It's quite the intro. Yes, it is. They usually want to cut me off by midway through those intros. Max likes to go crazy with the AI. Just kidding. Yeah. Yeah. Thanks, Chad GBT. Shout out for the articulate sentence. Always live up to it. Right. Right. Yeah. Right. Um Ed, tell me about the idea around new development duplexes and kind of the need in the marketplace for indie. Like how was that idea born? Uh gosh, I mean it it probably goes back or starts a long time ago. I've been investing in indie for 25 years. So, and the the opportunity has always been the same. You know, you're looking for clean, safe, and affordable. So, and typically what I've seen over my years is a guy would purchase an investment property. Me included. You'd buy something and then renovate it, put it back in the neighborhood or leave the neighborhood where it's at and then it kind of gets swallowed up. So, um you know, what's better than an existing home that's been renovated would be brand new. So, what's better than a single family home, which is primarily what I look for? I mean, most investors, if you attend the groups or meetings, especially newbies getting started, everybody's look for the same thing. It's a one-story ranch home with a low roof that's easy to fix, so guys can get on it and you can get it repaired easy. What's better than that would be a duplex or duplex. So, two single family homes, what we did, maybe a little bit different than most. A typical duplex is usually a side by side. And what we did is we turned them. So there's one on the bottom, one on the top. What we then started learning is it turned into more of a multigenerational home. We now have families are saying, "Hey, you know, my parents can live on the first floor, grandparents on the first floor because they don't want to navigate the stairs and you don't have to, but we can have the entire family living on one floor." So that's probably the start of it. Yeah. the uh isn't so a standard duplex in Indianapolis to get approved the frontal footage of the lot is like insanely wide, right? That to be able to get approval like 65 ft I think to have a a standard duplex. Um but the multi-use housing is 35 frontal feet. 35 ft. That's correct. Yeah. 35 ft for the skinny skinny lot. Yeah. So like when you're looking for those ginormous lots to build side by side, they make it almost impossible. I don't I don't know if there are many anywhere. You'd have to combine two single family lots to get that done. Right. That or occasionally you'll see one on a corner. Maybe it's a longer lot for some reason. You got all of the same size except for the one on each end. Yeah. So to be able to go out and forge new construction, it's nearly impossible. But this way, the strategy turning it on its side, been able to uh not only I mean, you can't miss them. You can't miss new group duplexes. They're all over the place now. You guys started two years ago or 3 years ago? About two years ago. It took us a year prior to that to develop it. But yeah. Yeah. And the amount of How many have you built thus far? Builtwise, we're probably in the 60s. We've sold about 90 of them now. Yeah. I remember jumping into real estate investing and you shared something on LinkedIn, I think, yesterday where you were talking like jumped into the marketplace and there were two duplexes available that you could purchase. It's like I want to real estate invest and there's like two turnkey properties. Yeah. I I recall seeing you guys' deals and there was like the only two that were staying on the market and I was like these are brand new. Why are these not selling? And it was more you guys had them up for marketing purposes and like I think a lot of people were like who's new group? What is this? It's an AI rendering of a duplex, but it was like one on Quill Street downtown just sitting and sitting and then everything else was like moving really quick or was like kind of in a maybe tuxedo park and it was not moving cuz it was a rougher area or just dilapidated and he did renovation and running was a funny story was actually uh a bad taste in my mouth but it's obviously turned into uh a really great experience. But if you guys recall, I had an FHA buyer that went under contract on Quill and uh that FHA process with these utilities, like I think you guys just were like, "We're not doing any primary home loans anymore for a little bit and then you pivoted to strictly invest in it, which was kind of the original niche, but um how has that evolution been on finding the right uh end user for the products? Has that been easy to find? who's normally buying these and well I I would say probably 90 to 95% of our buyers are all investors. So my background really is more investor related. So I learned early on in my career that uh I'm not a very good salesman when it comes to getting excited emotionally about carpet or drapes or you know kitchen cabinets or what color to pick and that type of thing. So, uh, and I liked the idea of really working more with the investors because it's truly a business decision, right? There's should be non-emotional. Not that we don't get emotions involved from time to time, but you know, that investor is really looking for what's that return on investment going to be. And that's a much easier conversation to me. Maybe it's different for other people than it is, you know, talking about, well, should we put this shutter on the home or what about the front door? It's not right. Are we going to change the bathroom? That type of thing. So, we've we've avoided all that by simply working primarily with investors. It's a spec build, carbon copy. You know, maybe the colors on the front change, but it's uh your team knows what they're going in and doing. They don't need a homeowner. I think specifically on the deal you were working on. FHA through the build process was the problem. Like the established actually specked out is great. Oh, yeah. uh and they'll and they're able to lend on it. But the way that I want to get into some of the like actually how do people go and purchase them upon entry and idea of like I want to buy a new group duplex. You're 25% down on the front end before the build even starts. Um and the timeline's like five, six monthsish for build. Yeah, we're looking at six months right now. Um back to the FHA and Quill, that was I mean so early on. and I wasn't even working for Ed at the time, but uh at the beginning stages, you just don't know what you don't know when it comes to FHA. So, I I believe that these are obviously good for an investor, especially someone who is dealing with a lot of maintenance costs and headaches that come with it. But I mean, even for people FHAs who are younger, I think this has fantastic opportunity to house hack. And as we've moved along, that's something that I've been pushing more and more, especially the spec cuz I mean, a lot of times they don't want to wait 6 months and go through this new build process. They barely know what a home mortgage is, but a spec is like perfect. Yeah. It's hard to get someone with an FHA, they haven't had a house for two years to be able to qualify for that either, right? And it's hard to get the the money up front to be able to put down through the build for you guys because it's the way that you fund the you know help help fund the construction certainly doesn't pay for all the construction by any means but knowing that you are spending for somebody to come buy and it be an FHA that uh a spec build where somebody fell out and it's like oh here's the next best thing. It's great for house hackers. We've uh our team has been fortunate enough to bring quite a few house hackers through. Well, and I think that they might see the sticker price and be like 475 or 400,000, but you're forgetting you get to count 75% of their rental estimated income towards your uh debt to income. So, actually to qualify, it's more like buying a $300,000 house, which most first-time homeowners making, I don't know, 70 or 80% huge. Yeah. So, it's like and you're going to get a new construction. And so it's not like, hey, I'm going to have to go replace my roof or AC unit first two years of owning a home. It's it's a different experience. So I think more house hackers should be looking into this. Yeah, the sticker price is high, but it's actually less risky in a way once you kind of get into it. If you look at the overall inventory in Indianapolis for duplex inventory in particular, they're all 100 years old. So for somebody that's brand new, just trying to get started in that space, okay? You know, everybody starts out looking for the I don't know about you guys. The first one I bought was the cheapest thing I could find. I didn't know that area know if it was good or bad or whatever, but that's all the money I had. So, I bought the I bought the cheap one. Then afterwards, I learned the lessons, right? All the things that come along with, well, the water and sewer wasn't hooked up. $15,000. I got to dig up the street. So, things like that that you all of a sudden go, wait a minute, I can avoid all that. Um, I mean, I've been investing now for 25 years. So, the things that I've been able to learn, and hopefully we can lend some of that experience to a brand new buyer, is here's the things that are really going to be important to you down the road. Once you get somebody to move into that, you you want them to stay, right? You don't leave. So, if someone moves in and typically you sign a what, a one-year lease. So, a year from now, what are they going to do? They're going to look for how they're going to upgrade their living conditions. But if they start out with brand new, there's nowhere to go, right? They've got the best they can get. So there there's going to be a brand new unit. That means tenant retention or resident retention. So they're going to stick around longer. The other thing that we've done is we've provided extra insulation. So we've got thicker walls than normal. We didn't have to do that, but instead of using a 2x4 construction, which is what all the major builders do, you can look at we're building with 2x6 construction. That allows us to put more insulation in. You know what that means? Lower energy bills. So, if that resident that's living with use in a brand new home has low energy bills, why would they leave? Mhm. So, the plan is to keep it there as long as possible. We've tried to eliminate all the headaches and heartaches that we've had. I personally still own some older duplex inventory that I'm gradually selling off and replacing that money with brand new homes. M sold one last year on New Jersey uh that was built in 1910. So I had to do everything to it. Mhm. So to purchase brand new, all the windows are new. They're energy efficient. You got a brand new roof. You got a 10-year really bumper-to-bumper warranty. So those things help and now you can really enjoy just that true passive income cash flow and not worry about, oh well, I got to find a guy that's going to go fix the hole in the roof or problem with the ceiling and my furnace broke down or whatever the case might be. And I would venture to say nine out of 10 times someone gets into real estate investing and then leaves. It's because the maintenance is annoying. Absolutely. It just it's unpredictable. It's stressful. I got to go find the right contractor, then they don't show up, then I have to go to the next one. Oh, the price is too high. At this point, you're just like, I want this to be a number on my phone on my cash app, you know, uh or you know, a Fidelity account. You don't want it to be this 3D thing. But, uh I think in and I want to get into a little bit of my journey and experience, but the reason I got into this is I had a quad. So, a partner approached me, a friend. He had $80,000 he wanted to invest. I was like, great, let's get four units. We can cash flow like crazy. We get in and we actually the first two months we did cash like crazy. Literally was like the first 3 months and then everything started breaking because it was built in 1915 and then it's a class C area with like a median an average rent of like 900. Well, these tenants lives are crazy. So job switch fired. Uh one of them went to jail literally in the middle of his lease. We're like where where' the guy go? Why is he even paying? He went to jail. Like didn't even tell the property manager. Uh so at a certain point I was just like I can't handle the grind of this thing. I saw this saw this Brookside lot which was probably one of the better lots. It's a class A A minus lot uh near Brookside and I was like that's exactly I think what I would prefer. Um I'd love to Well, you would probably live there if you I would I could easily. It's better than my first two homes unit. You had families asking you to buy it and live there. House hackers wanting it. I had clients who were like touring it as I was showing them what it could look like do one of these and they were like, "Oh, we actually want this one." That was like their preferred neighborhood. Yeah. So, I mean, the neighborhood it's in is kind of the Windsor Park, uh, Brookside area, which they just redid Poges Run. North Mass Boulder came in about four years ago. Amelius Can came in. So, like that's the reason I bought it was and we can get into the cash flow projections. I uh I love cash flow, but I think cash flow is just what greases the wheels. I'm not expecting this to be something I buy groceries with or whatever. Appreciation, low headache. It's totally just like I think it could be worth 600, 700 within a few years because that's what the single family homes are starting to go for that are new builds there, right? Um if not more. If not more. I would love to kind of we haven't given like the full breakdown on what what the duplex I know there's triplexes and quads coming out what the duplex investment actually looks like. So I'd love to hear from you guys. You can explain it. Maybe Ryan can. We haven't given you the mic that much. What is the purchase price? How much down? Uh you know if I'm looking to do a primary residence move, can I put less than 20% down? If I'm an investor, what do I have to put down? And then what is kind of the cash flow, the rents? What what was the kind of the high level here with these? Yeah. So, when we were starting out, we weren't doing any FHAs at all or really trying to limit it to just one if it was a spec build. Now, you're looking in the ballpark of 425 to 475 purchase price. 3D, two bath, um 1250 ft. Multiply that times two to get the entire purchase of what you're getting. Um yeah, so that that's the outline of what you're looking at for these. The triplexes and quads, a little bit different. uh triplex not so much different. You're kind of just stacking one on top. We already touched upon how they are stacked. Think of like a Chicago town home appeal uh when you're looking at these. And then our D or quads. Um we have two builds that we're looking on right now, just depending on the size of the lot, what an investor is looking for. But one of them is going to be one one on the sides, two ones in the middle, and then the other build's going to be two two with two two and a half in the middle. Um, so for me, I think that those are really good when you're looking more toward your short-term and midterm rental because then you have that ratio of a one-1. Traveling nurses always want the bed bath. Um, the triplex for me though, I know you've said this, but I think it's going to be our best seller, especially when we start getting our feet under us with it, start getting off of the hiccups or roadblocks because you're just adding in another unit of the duplex. If you're buying the duplex for 475, the triplex is selling for 575, you're paying a h 100red grand for an entire unit of income coming in. That income's looking in the ballpark 1,800 to 2,200 because that doesn't change your monthly payment by that much versus the rental income. So, just it's all cash flow. It changes your cash flow, your cash on cash. I mean, you're looking north of 10% on them. Talk talk to me about the rent rates and before you do how like I pick up the phone, I call you. I'm like, I want to buy a new group duplex. Well, you pick up the phone, you call me or Tyler, and we'll pick up the phone and call Ryan. Um, but somebody gets to you somehow some way with a roots buyer agency agreement and ask that they want to, you know, build. What does a down payment look like? Timeline, all of that. Uh, just for duplexes to make it simple. So, I always try to look at what the buyer is looking for. In my head, I think it's awesome. You have all these different parties involved, but it is it is all about the investor, giving them the best experience possible. So, they're an FHA. I'm looking for the spec build. I'm keeping my ear, hey, if there's a mutual release, I know bang, bang, bang. I have three people looking for those. Um, sorry, what was your question? What's the process? Standard investor. What's the process? So, their standard process is you're going to go to our inventory page. You have lots available there. It's pretty self-explanatory. Financial analysis, street views, uh, neighborhood writeups. But from there, you're basically putting $10,000 down. I always put air quotes dibs. I call dibs on 123 Main Street. That's what that $10,000 does. By the time that we breaking ground, we have our permits and we're ready to rock and roll. We ask for that difference of the 25% deposit. We don't sell them at this price anymore to put numbers easy and make it easier for the viewers. You have $400,000 purchase price putting 10,000 down. That 25%'s 100,000, but you're getting deducted 10 grand on the purchase price or deposit for or I mean to make it so it's like you're 125 to 150 down as permits breaking ground in I think there's two answers to that. One of them if for an FHA buyer, a house hacker, they're going to put their three and a half% down, right? Coming in for a spec build just like you would in any spec neighborhood and and that could be hey either we have something that's in inventory that might work or maybe we're mid build that's not spoken for yet. They may step into that. If not, we got to work with them to um and we'll provide whatever we've got future inventory lots that are coming available. So, that's one buyer. That's your FHA buyer. Yep. The second one's going to be a non-owner occupied, which would be their investor. Okay. And those are going to be uh for the most part, I think they're all 25% down. You may be able to find a lender that does 20% down, but I think you're going to count on 20 to 25% down on the whatever the purchase price is. Yeah. And I mean my numbers were 120 down and I got that. We got my partner put in 80. We bought the quad. It appreciated 50k and then we sold that. We didn't actually do a 1031. However, I think a 1031 for many of the investors that work with us is a phenomenal play. If you have two to three or even one maybe um well, you know, equity position investment um that is older and you're like, I'm sick and tired of this. I have big expenses coming down the pipe. Sell it and then, you know, talk to your agent, get a 1031 um setup, uh escrow set up to do this process. But mine was 120 down. And when I ran the numbers, I think, you know, you guys have said it's what, 8% cash on cash. I ran the numbers and I'm probably a little more conservative. Um, and it was probably a five%ish cash on cash. But then I'm looking at that's the I like to frame it as like that's realized gain. That's actual cash, you know, cash on cash. But then there's the unrealized gain, right? Tenants paying down the mortgage, the inflation, hedging, and the appreciation. That's more what I'm focused on. Uh, I think that 5% that's that's a pretty small margin somewhat. I mean, even 10% it's like things go wrong and hopefully your warranty kicks in. However, that can vanish as we know quite quickly with vacancies and and this and that in the market. Uh but the unrealized gain I think is cuz these are being developed in what I would describe as pretty up and coming areas and transitional neighborhood gentrification and in fact you guys are the force really doing that doing entire blocks. I mean well there's always a reason why we pick an area. So your mcom we see the city putting in money for a sidewalk. I mean, a pretty big sidewalk. We heard rumors of the grain mill coming down. Um, there's a lot of land over there, so we're always looking for builders to come behind us. I mean, more often than not, we're following people like Onyx and East and kind of catching on their tailwinds. So, we're looking and listening to stuff that's going on in the city to kind of beat everyone else to the punch on that market. And then, funny enough, every time that we leave an area, there are always builders, always people coming in doing fix and flips because they see what's going on. Yeah. M. No, I have a I have a property listed on State right now. It's a single family and around there there's been a couple new groups done and I was just looking I'm like this single family was 120K 3 years ago and it's like selling for 160. That's 100% on the back of you guys and what you've done there. Uh to put it simple on yours, the whole realized gain is it appreciated or appraised before closing for over 500. No, it did not. Yeah, it did. I thought you told me it didn't. No, I think that was self appraisal. Maybe somebody was willing somebody was willing to pay for which is not disclaimer anything close to an appraisal but that would have made for a good story. Some of them I think have appraised over I mean because it's a six month process a lot of times there is equity. I yeah I think you could have gotten we easily could have but you know these appraisers sometimes they just go in whatever it's contracted for they just write it off that which is what they're doing because they're new construction and they're they're all the same thing. Well we're getting the appraisal on the front end too. So that helps us a lot and also gives the buyer a little bit of a safety net knowing, okay, this is I'm I'm getting what I'm paying for with this. And over the course of six, nine months, a lot can happen. And I mean, you could, like you said, where you're having a buyer come to you and they're paying over what you paid for it. Yeah. And I think I I do want to get into some of the nitty-gritty here. I think the one uh I want to hear from you guys on what have been the challenges either for your own company or investors. I think the one thing I'm looking forward to is I just closed last week, a week or two ago. It's on the rental market and it's now late July. The renter market pendulum has swung a little bit to I'm hearing across the board downtown leasing is a little slow. You could be listening to this podcast in the spring of 2026 and it could be totally a whole different market at this point, but it is slower and I haven't gotten as many inquiries as I was hoping for. That's not to scare people away. Hey, these are these are great products. I think they're very appealing. The the downtown market is very uh hit or miss at times. I mean, for the example of MCOM or a couple of the others where so many of these have been built right next to each other, they complete and you've got uh property manager number one on the end of the street, property manager number two on the other end, and three, four, five, and six in the middle. And you've got a total of 36 units across the street with six different property managers. Of course, there's going to be this competition because they're they're rinse and repeat. Like the units are identical. So, I have noticed a couple where it's like, uh, one person has theirs out for cheaper than the next person. Why wouldn't you go rent that one, right? Um, what is some of the kind of feedback through the rental on this like second wave two years? I think that's some of you when we're building one on an infill lot and there's only one lot in that neighborhood, right? Usually, we're seeing those those are going to lease up quick, right? So, uh, in a situation where we did build 11 of them in a row, we've got about 25 in that neighborhood altogether. So, there's, if you think about that's close to 50 rental unit, an apartment complex almost. Exactly. He says that all the time. And when you're, if you talk to an apartment community, they're going to lease those up over time, right? So, they don't get stabilized immediately. I mean, I a typical small investor, okay, all of us, right? The second I put mine on the market, I want to lease it up that day, right? I want I'm looking for that passive income to come in day one. Trying to beat the first mortgage payment. Hey, I want to interrupt this episode. We have no sponsors on this show. It's completely free. Just Max and I trying to teach people how to build wealth through real estate. However, we do have an ask for you. The best way that you can support us and growing is by sharing this to a like-minded individual. All right, that's it. Back to the rest of the episode. But the reality is remember this. We're investing for the long term. So those of you that have been you guys have been doing it for a while now and I've been doing I know I'm the oldest guy here but been doing it longer than anybody else. So the real benefit is going to come over time that 5 to 10 years and sometimes we just need to remind people hey you didn't get in this to get that passive income check day one. We're going to help with that because you're not going to have any deferred maintenance or expenses going to come along with that money you put in the bank should stay there. It's not going to have to come back out of your pocket in order to pay for a furnace repair or that type of thing. We're going to help you with that. But remember that over the next 5 to 7 to 10 years, you're really going to see some significant appreciation. We deliberately are buying in areas where we know the city's spending money. Yeah, I can see that intentionality for sure. Yeah. I And that was I don't know if you got time, I'll tell you a quick story of how that happened. I think I may have already told you, Tyler, but the very first forplex I ever bought in Indianapolis is the quarter of 24th of Delaware. Well, now it's very nice. It's called Fall Creek Place. Prior to that, it was called Dodge City. So, I had a uh investor buddy of mine. He was actually a former police officer and I tried to convince him to buy with me and he wouldn't do it. I kept bugging him and bugging him and finally like I go, "Scott, what's the matter with you?" He goes, "Ad," he goes, "When I was a rookie police officer," he said, "I got in a gunfight at that corner. I'm not going to." He said, "That's just, you know, it's a it's a mojo thing, whatever you want to call it." So, he wasn't willing to do it. I go, "Okay, I get it." Well, what happened for me, I bought the forplex, called the city because there's a duplex across the street that was up for sale by the city of Indianapolis, which is kind of odd. I called and said, "Hey, I'm interested buying." They said, "Will you live there?" And I said, "No." So, I've got another home. They said, 'Well, we won't sell it to you because this has to be purchased by an owner occupant. And that was kind of the beginning of what now is they call them great places or an area where the city is developing in a small concentrated area. That was Fall Creek Place. So, they said uh I go, "Okay, I get it. If I I'm not going to live there. So, I have one across the street at whatever the address was." And she said, "Yeah, we know. we're gonna tear yours down." And I kind of panicked because it was my very first investment and now I'm being told by the city that they're going to tear mine down. So I asked, "What do I do?" And she said, "Well, we're going to appraise it and we'll give you fair market value for it." So I immediately got off the phone, called the painter, and said, "Stop." So I didn't want to spend any more money. And a few weeks later, they appraised it, came in for more. I bought it from a bank. So, and I was able to sell it, make some money. But the real lesson was and what I learned afterwards is if you look where there's um new sidewalks are being put in or they're changing up the curbs or there's new street lights going in, that's an area where the city's spending money. You can also get on any website, look at a 10ear master plan and now they're all over the city of Indianapolis. But what I realized is I don't need to be part of that as long as I can just be alongside what they're doing because that future growth that forced appreciation is what's going to carry me. So I've done that ever since then. Well, yeah. Yeah. And I think that these are uh unique in that they are new construction and there's just so little new construction downtown that is under the $500,000 price point cuz all the new builders, H Homes, uh you know, Redevelopment Group, they're doing mostly single family homes and they're mostly going for like the near north side where they can get crazy high margins where cuz it's expensive to do new builds. I mean, all of it, the land is expensive, the materials, the the labor costs are obviously hugely expensive now. And so, they normally go luxury single family homes, right? There's very few developers doing uh market rate rental development. It's mostly like, you know, guys like us just renovating homes and recycling our cash and all that. Um, I think another thing that I'll point out to people is if you're looking for an area to buy one of these, which neighborhoods have a consolidated um, cohesive neighborhood um, association. Um, so Cottage Home Place and Brookside both do. Um, they have like this yearly get together that's like super popular. There's also commercial areas. But I think about Monanon Yard and I think about um this Windsor Park area as two places that are desirable places to live. I think those two are two examples of places that are just going to see enormous appreciation and that any of those investors that have bought them are going to people will be saying that they were geniuses. I honestly think in like 10 years they're be like, "You were a genius." And it's kind of obvious. It's like they have all of the ingredients that makes for a strong investment. I am very curious. I'm not going to say they're bad investments on some of these that are on like the west side and some of these areas that you wonder why would someone choose to live here. You know, you see there's close to downtown, you know, close to Lucas Oil and all this, but like there's not a neighborhood group, there's not many events or local establishments. So, I'm curious to see how some of those other neighborhoods that are a little more transient, how those go. I think the comparison to make though, like to combat with that is they can go into Fountain Square and rent and they're going to have brown cabinets, a white stove, and a white fridge. Cuz you don't have to have nicities in Fountain Square. You're going to have fiberglass. Like, it nothing's going to be nice or luxury in the home. Your area is going to be walkable and that's great if that's what you want. A lot of people want tile and they want granite and they want LBP flooring and they want new, right? Because they look at the old house even same way that we look when we're buying like you know buying the old the only thing I would push back in there is I don't know how many people are willing to live in a bad area for that long. None of my friends are talking they all I have friends that would rather live in a dumpy Fountain Square place that is walkable. So, I just like I personally don't have anecdotal experience with someone willing to live in I think a borderline, you know, bad neighborhood. I think it depends on the person, too, because like Ed said earlier, they're not going to have anywhere else better to go when it comes to cosmetically. Um, yeah, area though. I agree. I have friends both ways. I'll have some that want the nicest thing, but they're not in the best area or all they care about is the area. It's easy. It's walkable. Um, so I think it just depends on the tenant and person. Yeah. No, absolutely. Yeah. No, that's totally fair. my single families would tend to be very similar neighborhoods to what you guys are building in and I have no problem finding tenants um because of all the the facts of they're just nicer than anywhere else and has a good tenant retention. So, I don't know. I think it's to each their own of what you're looking for and and everybody has their own desires. Um you guys are helping with the like vacancy though. We've seen some promotions where it's like paying for some of the property management for the first year as an example or you know helping support and those things. Um so I seen the the effort there. I just had an investor call me that had bought one. He's like can't find a can't find a ding tenant because the guy next door to me just dropped the rate. He's like do I drop the rate? I'm like sit still. Reminded him of some of the things that you were talking about. I don't know the area which home that's at in particular. But what I've seen is the local property management companies, if they're using a lock box basically to allow people, that's how they're showing them. Yeah. Those are not fairing nearly as well as someone that's willing to meet people personally and have that face-toface eyeball contact. Yeah. And those are getting leased up. Okay. I personally own four units, two buildings, four units on Moncom. So, and I did not drop my rent. So, I think you just got to pick the right manager, too. Yeah. Well, you got to talk the talk, right? So, I wasn't going to tell people, hey, you know, you can rent them for this, which is $1,800 a month, but yet I'm dropping my price. It wasn't fair. So, I didn't do that. I left it high. So, and we were able to uh secure those buildings. I did end up matching uh somebody else that was next door. I already lost two tenants because they ended up taking a look at mine from our advertising. We met them and afterwards they called the sign down the street. They were able to get them leased up. So, um, good for whoever the guy was at in those buildings. But, yeah, I I think it's that face to face. You need to meet him. And I think it's probably a sign of the times a little bit, too. The market's not nearly as robust as what it was. So, you need to double down or do a little bit more personal attention. Make sure that if you're going to interview that property manager, how do they treat that resident and how they're going to move in? Yeah. Or you go to a quad. Try. Yeah, you can do that, too. I I do agree though. I mean, we're all in sales. I think a lot of people buy the person that they're with selling, not the actual product or service. So, I think that human element is a huge part. Uh the other thing is too, we've already talked about how these are you're wanting to hold these for at minimum 5 years. I always try to push upwards to 10 to really get the full effect of what these can do. Um, but if you're not being able to rent them for a call at $2,000 a month and you drop it to $1,800, you might lose a couple grand over one year, but by the time that next rollound comes or if you put them on a 9-month lease in June and then now it's March, everyone else is on 12 months. Well, now you're in the hottest season to get these leased up and no one else in the area is. So, I think that there's different strategies and just an overall awareness of there's a long-term plan, different things that you can do to kind of satisfy the setback of if you're in a big area where there's 20, 30, 40 of these units and people are just starting to price undercut each other. Yeah, I think tenant duration is something that I have a lot of curiosity with and I would love to see the long-term data of which we currently don't have because traditionally uh duplexes in Indianapolis but have gone in cycles of popularity to unpopularity over the course of many years. We're coming out of they were super super popular when interest rates are low to now they're they're modestly popular but we're we're kind of going down. New construction's kind of its own niche. So, I'm not comparing you to some of these hundred-y old ones, but I'm seeing more sellers like, eh, I tried it. I don't want to do it. So, the inventory is rising. That's just part of the market cycle. But one of the reasons why uh small multif family can be challenging is because there's not as many people that want to live in a multif family their whole life. A lot of times it's, hey, I'm going to sit here and rent and have a job nearby and then as soon as I can get into my own home, I'm out of here. There's of course exceptions to that, but have you h are you seeing um this trend with people staying in duplexes for a very very long period of time? Um or is it one of those things that you just need to be competitive with your rent rate and make sure you you know lease it up quick? Yeah, I don't I'm got I want to tell you a story that it's not really off topic, but here's a situation. We're now calling on various towns around municipalities around Indianapolis, the donut county. So, we're looking to expand our footprint, what we're doing, and our product really fits for walkability. So, it's needs to be closer to downtown. But, uh, we were up in the town of Fortville talking to the town manager and asking about their 10-year master plan and what what their projections were, what they wanted to do. So, after we listened to him for a while, we started to talk about our product. It was myself and my partner Kevin. So, and um while we're talking to him, we said, "Hey, we're building a duplex product." He said, "Let me stop you." He said, "I grew up in upstate New York." So, and where I live was a small town, and everybody up there in the New England areas, they all lived in what were called two flats. A two flat was my grandparents lived on the first floor and me and my parents lived upstairs. So, it had a lot of emotional value to him. So, what he wanted to see was for us to build that product in that area. So, um, and then he said, "By the way, I've just recently seen some online. Let me show you what it looks like." So, he took his computer and turn it around. And of course, Kevin and I looked at each other and kind of grinned because it was our product. Yeah. So, um, yeah. And ever since in that relationship, so we're starting five of them out in Fortville in the next probably 30 to 45 days. I think any smart investor would buy all five of those and own them because Fortville is just up and to the right. Um, no, that's awesome. I think the city of Indianapolis needs you guys and needs the idea of tries and quads. We have so many parking lots. We need those parking lots gone. Like everybody in the city of Indianapolis can park their car, but not everybody in the city of Indianapolis can live, and that's a problem. So, the housing units of bringing those quads to life Yeah. is going to be huge. Uh, and it's going to have a major impact. I want to shift gears a little bit away from uh current the last two years of project and uh Ed I know you have a huge background in real estate and you've been around for ever being able to invest and that's valuable that's people need to hear about it uh that's the gray hair of the no right audience stories tell me about your best deal you ever did and how much money you made from it or we can do favorite deal too I like that question I'll tell from a a sales perspective or or investing. Uh we'll go investing investing then right. So I here's one that just happened. I don't know if it's one of my best, but it was a good one. I'd sold um for years I was hosting people that would come in from Hawaii. So you know everybody every everybody lives in Indiana doesn't realize how cheap prices are, but the people live on the east coast and west coast they do. So I had a very good relationship still do with the president of the Hawaii Real Estate Investors Association. So this guy would have bus tours where he bring people in and we would basically immerse them in re Indiana real estate for a week. So and they would meet property managers and etc etc. So um there's a guy that um I worked with. He actually works for a radio station in Hawaii. His first name is Joy and he bought several properties for me. One of them was a duplex. So in the 20 I think this is the 2800 block of Rockle. Now, this goes back about 15 years ago. So, I sold him that particular property and among a bunch of other people. I actually sold several on that same street. And I'll be honest with you, when he left, I'm like, "God, I hope I didn't rip him off, you know, because I I just, you know, sometimes there's just not that confidence to know you're doing the right thing, but you want to do the right thing." So, he held on to for the long term. He called me the other day and I said, "Hey, you still got that duplex?" He says, "Yeah." I go, 'What do you think it's worth?' Now, keep in mind, I owned one two blocks away that I just sold last year. So I go, 'What do you think it's worth?' He said, 'I don't know. It's probably worth $120. I go, Joy, don't sell it. Okay, and definitely don't sell it for $120,000. You want to sell it? We need to talk, right? So, I mean, I sold mine for $320. He paid $65,000 for that duplex. What a ripoff, right? Yeah. I I ripped him off. Yeah. But um I think those are the kind of stories that I believe we're going to hear. Well, in 10 years, the projected uh value of a median home is supposed to be over a million and then in 30 years the projected value, and this I don't know how they get these algorithms, but John Murphy came in uh president of um MJW said that the the projected value of a median home is 1. 72 million in 30 years. So I mean it's currently at 432,000 I believe. It is that nationally or state by state? Nationally. So I mean it'll be less here. Of course we're usually 70ish% of that. But it's just like Yeah. I mean they they you can't because real estate is inherently scarce and it's only going to get more expensive to build it. You can't be frightened when you see, oh that new duplex is 475. I'm like that's a great deal. I'm surprised it's not 600 in that location. It's funny too talking to friends and people in the industry and I don't want to use the word complain but just talking about like how expensive real estate is and how it's unfair for like oh this generation I'm like it's not slowing down right it's not slowing down like I know that people were talking about like 6 n 12 months ago that there's going to be a massive crash going to start becoming more affordable year people talking about interest rates coming down I mean just look at history I don't it's not going to slow down at all there's not the inventory in Indianapolis for that to happen maybe in some states you know Florida there's 4x the amount of inventory. Sure. You know, there could be some sort of adjustment there. But here, I am genuinely scared for all of our first-time home buyers that are like, "Oh, I'm going to, you know, wait till the rates go down. It's more affordable." That's a phantom thing they're chasing, right? We know right now you should go grab a seller by the callers and ask for the lowest price and negotiate hard and you might get it in this market, right? Whereas you won't when rates are in the fives. So, think about what you just said. So, let's go back for me. I go back that 15 years ago. $65,000 is a lot of money. And he was kind of like, I don't know. He had to get it appraised. It appraised barely for $65,000. So, think about that. Then he also locked it in at at rates. Okay. And the cost of money 15 years ago. So, if you now take that number and you turn around and go, "All right, well, 400. Yeah, 400 450 sounds like a lot. But if it's worth $1. 7 million in when' you say 20 in 30 years you paid off your the whole idea is you paid off your mortgage to have $1. 7 million. So that's a $1. 3 million gain if you don't count any of the interest savings and etc. So how many of those do you want really would be the question. I I would going back to your story. Uh Max was getting into this. We kind of got off track, but um getting to the end here, but I would love to know what does it take to do the scale of operation you're now doing? You started by buying quads, duplexes like us. We're trying to do that. We're young. And yet now you are raising capital or at least taking on the type of debt to do huge builds and turning over that money quickly and have a brokerage. Um I guess my question there is like what are the keys to building that system? What have you learned from that? Any challenges? Just curious to hear about that. I you know I I don't think you know the hard part about being a real estate sales in general I would say is it can be emotional roller coaster right you got to go up and down so don't let your highs get too high and don't let your lows get too low surround yourself with the right people I already know you guys are doing that so just with the interaction that we've had over the last year so and I think that's important you gota you got to find the right people I'm currently listening to a book called good to great so books are good to listen to but it's not getting the the right people on the bus, okay? Or it's getting the right people in the right bus or getting the right people in the right seat. So, uh we're constantly working on that. I've found that we've had people that have come into our company and worked for a period of time and maybe they weren't um they weren't the right fit for the right place. Probably one of my best contractors now is a guy that used to work for me. So, and he no longer works for me, but he works for me. So he now does a lot of our foundations and at the time I had hired him uh he was in fact where I met him actually he was repairing a garage for me and I was outside. You guys know what a comealong is? Okay. It's a it's a it's something used to like pry open railroad doors. Okay. So think about this. You need a cable and like a wench where you got to wench this thing to open the door cuz they're super heavy. Well, he was using this in order to straighten up a garage that was falling. The garage was like this and he straightened it back up for me and then secured it. And I'm like, "This guy's pretty smart." So, I ended up talking to him. Then I ended up hiring me, worked for me for three or four years. So, and then eventually he left and went out on his own. And now he's doing a great job for us. So, it's finding those right relationships and sticking with them. They may not be the right fit for where they're at, but maybe there's a better seat. So I think what have you learned about um in terms of structuring a capital stack to do development at this scale? Um I think it's all about people. I think it's you know everybody's got different assets that they bring to the table and those assets sometimes can be intellectual assets or um sometimes monetary assets but just by continuing to meet and talk with those people and build the relationships. So um we now running into people that have land that are not sure what to do with it. that they're open to partnership. Um working with a guy now that um purchased um like a dozen duplexes, but he's got four acres behind it and he's like, I need to do something with the 4 acres. So, he already owns the land, so that's valuable, and he needs somebody that can step in and help build. Um, this morning I had a meeting with some guys that came in and they uh actually have a business where they're they work with not not forprofits and they have I think it's called second choice. Um, other words, people are coming out of the incarceration or maybe they're aging out of foster care, that type of thing. They're just not ready to be out on their own and they need a place to go. They need some structure. So, and they have an opportunity with some not for-profit things that they're doing. they want to look to see if there's a way to work with us. Um, we think that there's a lot of other people out there that um when you're building, you need a lot of people, right? You need a lot of different resources, whether it's someone that can either help find land or it's someone that um maybe has uh some skill set that you don't have. So, we're using a a lady that's doing all of her permits because she's much much better at it than we are. So, it's a little thing like that, but all of a sudden, it makes a difference. Yeah, relationships are always everything. That's what it comes back to. And allowing people to be great at what they are great at, just like living in it. Um, thanks guys for coming on. Before we wrap up, we have a couple rapid fire questions. I'll kick it to Tyler first. Yeah, I'm gonna go more specific. Uh, best place to grab a bypull, Ryan. Oh, Embroiderpull. Broaderpool. You just moved there, right? Yeah, near there. Um, I would My go-to is Union Jacks. Just pub. Yeah, there's a lot there. You can go sit on the patio. People watch from the outside. Um, yeah, a lot of variety of food there, too. Yeah, English style pub. Go there for the soccer games. Yeah, I'm a rugby guy, so didn't know that. I'll go over there for the rugby tournaments every year. There you go. Ed, what about you? Best play in Indie. Where's the go-to place to go play? I don't know. My wife's Italian, so we go to San Jui up at the 116th in um in the yard. Okay. Okay. I've not even heard of it. We're just getting this list going of places. We got to go on some District. Yeah, I haven't been there. Monterey, another seafood place. Slapfish is a good one, too. I don't know if you've been there. It's a small place, but man, it's really good. Lots of meat there. Yeah, I remember I could not finish that bowl I had. Kick it to you, Max. Uh, what's one area of life you're focused on growing? I would say health-wise, just physical, mental. Um, I'd say those are probably the biggest, too, cuz with that, I think it kind of bleeds into work, relationship, and health has always been my number one thing. Yeah, I think if that's at the tip of the spear, everything else follows, right? When we're unhealthy, we bring that weight everywhere mentally, physically, or whatever it is. Uh, Ed, what's one habit that's changed your life? Um, I I mean, I like to hit the gym three to four times a week. So, I just think it it adds mental clarity sometimes when I get the fog going on just to get away for a little bit. You can put headphones on, listen to a book or whatever you need to the Bible and do some working out. And I think that it helps to clear some things. I don't know anyone who would say that they don't have more clarity after they had a nice sweat going right just every time I'm the I'm in the midst of the 75 hard and I'm almost like uh tired of having to work out so much working out it's like 100x what I used that would ruin working out for me that's why I haven't done 75 hard which is just my copout cuz I don't want to do it but it's been a good it's been a great experience so have soft people need to look it up it's kind of lame but I didn't even know that was a thing it's a yeah you do you do one workout a day. It doesn't have to be inside, outside. It's whatever you want. 45 minutes for the 75 sauce. So, the rules are more loose. Yeah. It's the light diet version, you know. Okay. Yeah. People moving. This has been awesome. Where can people find out more about New Group? Our website, New Real Estate Group. Um, they want to get in contact with me or Ed, go through you, contact us directly off of the website. Probably we'll have links in the the, you know, below in the description for people to contact. But I would suggest I mean people obviously should reach re reach out to Ed, but you're especially on the sales side. And I would say you're 10 out of 10 at explaining that and then building the relationship to just add value to people. Like the minute you started talking to us at roots were like we got to get in one of these duplexes. And I would just encourage people to get in one of the duplexes. All this seems ethereal and uh you know like it's just a lot of numbers and you know details flying at you. Once you get in, you're like, "Oh, this is so simple. It just makes sense." Yeah. I obviously I prefer people who have land or have investors with them. But more than anything, what I think is the most valuable is, "Hey, let's sit down. Let's have coffee. Let's go get lunch. Let's go check out a duplex." Yeah. I get to pick your brain, you get to pick my brain, and then we'll go check one of those out. Yeah. Investors, house hackers. Yeah. Anyone should take Ryan up on that. Well, if you want to be like Tyler, like and subscribe this podcast and go buy a new group duplex.