Got a call today from a guy who inherited control of a screwed up apartment building. I have a lot of sympathy for people in that situation, since it happened to my family back east. The dilemma is this: You know you have an asset which is not performing. You know that it will cost … Continue reading “Fixing a screwed-up building”
Category: How to
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!”
Right now, you need soft eyes
There are no perfect deals right now. Think about it: People don’t generally sell perfect buildings where everything is going great. They definitely don’t right now, when the alternative to owning the building is to hold the money in their money-market account earning 0.25%. Does that mean you shouldn’t buy anything? No. There are definitely … Continue reading “Right now, you need soft eyes”
How to start a settlement negotiation
I remember when I first got started buying and renovating apartment buildings, a broker told me that if you haven’t been sued yet, you’re not really in the business. Fortunately for me, I’ve avoided being sued so far. But that doesn’t mean I haven’t had to discuss settlements with people. Everyone once in a while, … Continue reading “How to start a settlement negotiation”
Ways into the apartment business: Leasing
Further to our earlier conversation about ways into the apartment business… Another good way into the business is through leasing. Technically, you are supposed to have a real estate license to lease apartments. However, many management companies use unlicensed leasing agents, in part because very few licensed sales agents are willing to work for the … Continue reading “Ways into the apartment business: Leasing”
Ways into the apartment business
I met with a reader of this blog last week (hi Christina!) to discuss how she could get started in the apartment business. I spent a bunch of time blabbering to her and then realized that some of what I had said might interest those of you who are also considering making a career in … Continue reading “Ways into the apartment business”
Selling notes
Here’s an angle on real estate that some lenders pursue: Selling notes. I was trying to explain this business to Lucy two nights ago as we were lying in bed. Needless to say, it put her to sleep. So please stop reading if you have anything important to do this morning. Anyway, here’s how the … Continue reading “Selling notes”
What is the Los Angeles REAP program?
Spend enough time looking at Los Angeles apartment listings and you will find one that says something like “Property in REAP. Looking for an all-cash buyer”. Or, much worse, you might get a letter from the Los Angeles Housing Department (LAHD) threatening to place your property in REAP if you don’t comply with their demands. … Continue reading “What is the Los Angeles REAP program?”
Should you hold real estate in an LLC?
Lots of buyers ask me about holding properties within an entity like an LLC, instead of in their own names. I’ll share the advice I give them with you, but only if you promise to remember that I am not a lawyer and this is not legal advice. First, let’s be clear about why someone … Continue reading “Should you hold real estate in an LLC?”
All about earthquake insurance
Potential apartment building owners occasionally ask me about earthquake insurance, which is not included in a standard property insurance plan. It’s kind of scary for owners with commercial mortgages, because recourse loans require you to pay up, even in the event of the building being seriously damaged or destroyed. I’ve never bought EQ coverage … Continue reading “All about earthquake insurance”