In basketball, a tweener is a player who’s between positions, like a slow, 6’6″ forward with a strong post game. He’s too strong for small forwards and too quick for power forwards. But, he’s also too slow to guard small forwards and too short to post-up power forwards. There’s value there, but it comes with significant … Continue reading “Tweeners”
Category: Buying
Checking in on the East Hollywood income property market
I’m on the record repeatedly extolling the virtues of owning in East Hollywood. I generally think owners there underestimate the achievable rents and that buyers can therefore occasionally find deals that makes sense, even at today’s inflated prices. Today, I figured I’d check in on the income properties on the market in East Hollywood to … Continue reading “Checking in on the East Hollywood income property market”
About to remove your appraisal contingency? Read this first.
You need to be very careful when you are considering removing your appraisal contingency, because it’s very easy to get burned. To understand why, we need to look at what an appraisal contingency is. Here’s the relevant language from paragraph 3I the California Association of Realtors multi-family agreement: “This Agreement is contingent upon a written … Continue reading “About to remove your appraisal contingency? Read this first.”
How security deposits are handled in a sale
Have had this question a few times in the past few weeks so I figured I’d answer it for everyone: How are security deposits handled in a sale? First, owner typically do not maintain a separate account for security deposits. When a tenant moves into the building, he gives the landlord a check for the … Continue reading “How security deposits are handled in a sale”
Bank error in my favor; collect $1400
It is customary, in Southern California, for the seller in a real estate deal to choose the escrow company. Generally, when I’m representing a buyer, and the buyer asks me if she should be concerned about the company chosen by the seller, I give a speach about how I’ve closed 30 or 35 deals over … Continue reading “Bank error in my favor; collect $1400”
How apartment investing can turn ugly right now
When I buy apartment buildings (or help other people buy them) I am ruthlessly focused on the cashflow they generate in year one. I don’t factor in rents increasing, nor do I factor in price increases stemming from rent increases. I want to know what the cashflow is RIGHT NOW. Many buyers to factor in … Continue reading “How apartment investing can turn ugly right now”
Remember the BATNA!
What’s a BATNA? Jabba tried to feed Skywalker to it. Just kidding. It’s the acronym for “best alternative to negotiated agreement”. BATNA is a term of art in the world of negotiations. It’s intended to represent your best choice besides taking whatever deal is on the table. For example: Let’s say you have only one … Continue reading “Remember the BATNA!”
Who takes the appraisal risk on an FHA loan
Just had a client get a counter back from a seller with the following language: “Buyer has offered to purchase property over List Price. Appraisal is NOT a contingency of this sale. Buyer accepts responsibility between appraised value and sale price if any occurs.” What does the seller mean? What he’s saying (in language which … Continue reading “Who takes the appraisal risk on an FHA loan”
Another reason I love multifamily: fragmentation
This observation comes from my friend Casey, who is also in the apartment business. (But, if I’ve somehow screwed it up, the blame is mine!). The Census Bureau estimates we have roughly 40,000,000 rental households in the United States. Multifamily Executive, a trade mag, estimates that the largest owner of multifamily units in the country, … Continue reading “Another reason I love multifamily: fragmentation”
Why you can’t just compare LA and Santa Monica cap rates
Spent some time over the past few days looking at properties in Santa Monica and West Los Angeles for investors. As I looked at buildings in both places, I started to realize that you can’t really compare them easily. Why? Theoretically, you should be able to. After all, a cap rate is a cap rate, … Continue reading “Why you can’t just compare LA and Santa Monica cap rates”