Recently, the question of when to order the appraisal has caused problems for us on two deals, so I thought I would address it here. Just so everyone is clear on what we’re talking about: When you use a loan to buy a building, the bank requires an appraisal be conducted. Depending on the size … Continue reading “When to order the appraisal”
Category: How to
Beware of setbacks!
Apologies, in advance, for a fairly technical piece, but this is very important information for anyone doing remodeling in LA. If you’re rehabbing a property, you need to be extremely careful about touching anything located in any setbacks. What do I mean by setbacks? They are the parts of any lot in which the city … Continue reading “Beware of setbacks!”
Avoiding a pretty painful “oops”
A reader wrote in to ask me a question about yesterday’s piece, which argued for refinancing and holding, rather than selling, completed repositioning projects. The question: “Only thing I don’t understand is why not refi on a LTV more than 60% to get back all of your original 2million dollars.” It’s a reasonable question. After … Continue reading “Avoiding a pretty painful “oops””
How a good contractor handles inspectors
By now, we’ve had a LOT of experience dealing with city inspections. And we’ve seen how many different contractors handle them. And here’s what separates the contractors who get their permits signed off from the ones who get endless streams of corrections: Good quality work (obviously); and Confidence. The nature of renovating old buildings is … Continue reading “How a good contractor handles inspectors”
Never lose units
Saw that someone arrived on the blog yesterday using the following search term “convert duplex into single family home”. Here’s my advice: Don’t do it. Or, at least, don’t do it with permits. Regular readers know I’m strongly in favor of using permits for every single construction project. It’s a bit more expensive, but you … Continue reading “Never lose units”
If I were a broker…
…who didn’t also renovate tons of apartment buildings, I would: Run rent surveys across all relevant neighborhoods, all the time Constantly poll my clients about construction costs for different finish levels and unit sizes Constantly poll my clients about eviction / tenant relocation costs Why would I do all these things? Because, without the above … Continue reading “If I were a broker…”
Taking apart a deal: An East Hollywood Duplex
Today, I’m going to try something new: Taking a look at a deal in one of our neighborhoods so that we can get a sense for what the numbers look like for the new owner. So, let’s take a look at an East Hollywood duplex that sold yesterday. I should start out by saying I didn’t offer … Continue reading “Taking apart a deal: An East Hollywood Duplex”
How DWP steals your money
If you manage apartment buildings, you can probably guess what I’m about to write about. If not, here goes: DWP is criminally under-staffed / incompetent DWP makes huge numbers of mistakes Getting someone on the phone to correct the mistakes and/or request normal service changes takes 30-90 minutes, each time For an individual trying to … Continue reading “How DWP steals your money”
Why we don’t announce closings
If you’re at all active in real estate, your email account is spammed daily by brokers announcing the closings of their latest deals. Why do they do this? Because doing so: Shows everyone in the market how active the broker is Keeps the brokers’ name in front of potential clients, increasing the chances potential clients call … Continue reading “Why we don’t announce closings”
Adaptive’s proof of funds problem
When you make an offer on a building, what you’re really saying to the owner is: “Please give me the exclusive right to consider buying your building at this price for the next 21 (or 30 or 60) days.” For an owner to accept, she needs to be ok with your price and, crucially, as … Continue reading “Adaptive’s proof of funds problem”