807 N Madison is leased up

We just finished leasing up the front structure at 807 N Madison, our most recently completed renovation project. Leasing the 10 units took us something like 31 days. We began construction in mid September of 2014, so the entire process took approx. 300 days (a little longer than we would like, due to some unanticipated … Continue reading “807 N Madison is leased up”

Thinking about expected value with Elon Musk

Just started reading the Elon Musk biography and am feeling inspired. In case you don’t know of him: Musk started and sold Zip2 and then PayPal, then started Tesla, SpaceX, and SolarCity. The latter three ventures push the boundaries of what is possible with technology in electric cars, space exploration and renewable energy, respectively. From a … Continue reading “Thinking about expected value with Elon Musk”

Closing on another one today

Today, we’re closing on a little fourplex deal in a neighborhood we really like. It’s a roughly $1.1MM all-in project, way too small on its own to be worth our time. However, it’s near a bunch of other stuff we’re renovating, it’s a simple project (no reconfiguration of the units), and we like the area … Continue reading “Closing on another one today”

What’s keeping me up at night

Do you know what’s keeping me up at night lately? It’s the following question: To what extent are apartments downtown and in Hollywood substitutes for the apartments we are renovating in East Hollywood, Silver Lake, Highland Park, etc.? I mean “substitutes” in the economic theory sense: “A product or service that satisfies the need of … Continue reading “What’s keeping me up at night”

Thinking about the effect of competition on our business

Just started Peter Thiel’s book about start-ups. Among the more interesting arguments in the book is about competition. Thiel argues that competition is a bad thing for businesses, because economic theory teaches us that, in competitive markets, profit is competed down to zero. Instead of entering into competitive markets, Thiel advises striking out into new … Continue reading “Thinking about the effect of competition on our business”

If you’re going to allow units without parking, allow lots of them!

One of the iron-clad rules I learned while doing the Better Dwellings portfolio is about to be turned on its head by the city council. Here’s the rule: Never buy a building with a non-conforming unit. I learned that rule the hard way at 2117 Clinton St., where we got whacked on a SCEP inspection. … Continue reading “If you’re going to allow units without parking, allow lots of them!”

Why I love density (it’s not what you think)

Last night, I walked over to the Last Bookstore, bought an interesting old novel for $6, walked home and read it. What does this have to do with real estate? Everything. Regular readers know I’m constantly banging on about density. I can’t stand the way city planning works in LA and I’m up on my … Continue reading “Why I love density (it’s not what you think)”

What we are doing here at Adaptive

Our business generally obeys a truism about investing: It’s relatively easy to generate market-beating returns with small amounts of money, but very difficult to do so with large amounts of money. Because we were capital-starved in the beginning, and needed to generate market-beating returns to attract more, we tuned the Adaptive model to generate market-beating … Continue reading “What we are doing here at Adaptive”