When liquidity dries up for supposedly liquid funds

When people invest with us, I always warn them not to expect their money back at any particular time. Why? Because real estate is a fundamentally illiquid asset (eg it takes a long time to sell). As long as you’re not a forced seller, you’l probably do very well… but you can get killed if … Continue reading “When liquidity dries up for supposedly liquid funds”

Losing a good deal to make a better track record

Am looking at a deal now that has an interesting problem: While ZIMAS and the county both show 12 units, the certificate of occupancy shows 11 units. The building only has 11 parking spaces, so it was pretty clearly built as 11, with the final unit added at some point along the way, most likely illegally. … Continue reading “Losing a good deal to make a better track record”

Bad news about open ceilings in LA apartments

Have some bad news for those of you who love vaulted ceilings in apartments… they’re almost always illegal in LA. First, what do I mean by vaulted ceilings? They’re the ones where you can look up and see the structure of the roof. Here’s an example: Beautiful, right? So, why should that be illegal? Two reasons: … Continue reading “Bad news about open ceilings in LA apartments”

How to research asking rents on Craigslist

If you’re going to do multifamily projects, you need to know your target post-rehab rents. In our business, we rely heavily on proprietary information from our existing portfolio. Since almost all our units are renovated to a similar standard and all our buildings are clustered in a few areas, we have very granular information about … Continue reading “How to research asking rents on Craigslist”

Why we pull the permits and how we share them with clients

Here’s an annoying catch-22 in which we often find ourselves in the brokerage business: Obtaining permits for a client. To understand why, you first need to understand how important it is to pull the permits on any building before buying it. The idea of the due diligence process conducted during the contingency period is to … Continue reading “Why we pull the permits and how we share them with clients”