I’m a real estate guy. It’s in my blood. My great grandfather, Morris, owned apartment blocks in the Bronx and a building in Manhattan. My grandfather, Leonard, owned commercial and multifamily in Rockland County, NY and was also a broker. My parents own several small apartment buildings in upstate NY.
I grew up answering calls from prospective tenants and shoveling out buildings on snow days. My first memory of a hard day’s work is of pulling weeds at 1 Washington Place in Troy, NY, a building my parents still own.
In 2007, I moved back to the States from London, where I did my graduate work at LSE and worked in investment banking, to start a real estate business. After checking out the insane relationship between (high) prices and (low) rents on every smaller apartment building on the market, my brother and I found a developer, Felix, who had gotten into trouble renovating a 16-unit building. The building was almost finished. Best of all, unlike most older buildings, it had no long-term tenants paying below market rents.
Felix had to sell. We saw the opportunity to buy a distressed asset at a pretty great price. After a painful sale process, we closed in April of 2008. I was excited for about five minutes. Then reality set in.
I’ll never forget the moment I realized we were now the owners of a not-quite-finished apartment building with no tenants and a big mortgage payment to make. It was terrifying. But we finished the building and filled it with tenants. We never missed a payment. If growing up a Kagan was our introduction to the apartment business, this was like freshman year of college, and I felt pretty good about passing.
Through this blog, I hope to share my what I’ve learned from buying and managing that first building and the twelve other ones I’ve bought or sold since. I’ll tell the story of how we came to own more than 100 apartments in LA within the next few years. I’ll share the ins-and-outs of LA rent control, dealing with tenants, how to spot a deal, the pitfalls of renovating, how to re-finance, etc. In short, I’m going to use this as the place to download all I’ve learned about the apartment business.
I look forward to sparking a conversation with those of you who already own or manage apartment buildings and those of you considering getting into the business.