Results for ‘Buying’ category

Anatomy of a homerun

Thought I’d share numbers for a deal we just stabilized. Not going to share the address, because I don’t want to tip anyone off re neighborhoods, etc. Anyway, here goes: Acquired in Spring 2015 Stabilized approx. 13 months later All in for ~$2.37MM Stabilized rent roll of $262k Implied GRM of 9x (!) Forecast NOI of $190k

Trusting the process

One of my agents called me yesterday to see if I had any ideas to help her. She’s got a great client who has been making strong offers on single family homes and getting outbid. Everyone is frustrated. As it happens, my parents are in the market for a home on the Eastside (working with

Why people pay high prices

Had someone yesterday email me asking why I think people are paying insane prices for Los Angeles apartment buildings. By insane, I mean 15-19x annual rents. At those prices, there’s basically no cashflow; in fact, at the upper end of the range, it’s likely you’ll pay to own the asset each month (instead of the

A minor epiphany about valuations for larger buildings

Just had a minor epiphany while walking over to the office from breakfast that I thought I’d share with you. It’s kind of embarrassing, in a “slap-myself-in-the-head-for-not-recognizing-this-earlier” kind of way, but I’m all about honesty on this blog, so here goes… Regular readers know I spend a lot of time thinking about the components of value.

Thinking about the components of value

Lately, have been thinking about what we mean when we say, for example, that we’re earning a 7% unlevered return on a property. The math is pretty obvious: Say we invest $2MM in a property between acquisition and renovation (assume this is cash and that there is no mortgage). If we generate $140k / year

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