Just finishing a 4plex in a really cool, up-and-coming neighborhood that we renovated on behalf of an outside investor. Was reviewing the original pro forma and revising in light of what I believe the rents will be… and got an annoying surprise. Based on the original pro forma, this was not a deal that we
Just had a minor epiphany while walking over to the office from breakfast that I thought I’d share with you. It’s kind of embarrassing, in a “slap-myself-in-the-head-for-not-recognizing-this-earlier” kind of way, but I’m all about honesty on this blog, so here goes… Regular readers know I spend a lot of time thinking about the components of value.
Spent some time this morning looking at rents in Silver Lake. When we started in this business back in 2008, a really nice 1 bed in Silver Lake was around $1500. Today, a similar apartment goes for $2200-2300. That’s an increase of ~50% in eight years… or around 5-5.5% / year (inclusive of compounding). But that’s
You may remember 363 S Leslie, a 4plex we recently completed in Highland Park. Here’s a pic to jog your memory: Am happy to report that leasing is done. Better yet: Our rents came in materially higher than we originally pro forma’d. So, instead of the 6.3% unlevered yield we expected out of the property, I
Here’s a question that’s been popping up all over the place: Why do developers only build apartments for the rich? The answer, as with most things in our business, is in the math. Imagine you can buy enough land to build 10 units for $1MM, or $100,000 per unit. Let’s say you have two options: