When you’re in a hot market, every second thing you get from brokers is a development opportunity. That’s generally code for “over-price land”. And I’ll tell you what your first impulse is: To see if you can maybe buy the land on either side and have that make the project work. (That’s called “assemblage”.) But this … Continue reading “How to think about assemblage”
Author: Moses Kagan
The kind of risk we take
Was talking with an investor earlier this week about possibly financing our next ground-up deal. He considered our proposed deal structure and said, basically, “You guys aren’t taking any risk”. Which is sort of true, because we proposed to not put our own money in the deal. Instead, we were offering to backstop losses, partially fund overages, … Continue reading “The kind of risk we take”
Building a platform
Here’s a sobering fact: The overhead at Adaptive Realty runs something like $45k / month. That means, before Jon and I see $1 in 2016, we need to bring in revenue of around $540k. Why have we set our business up like this, rather than just being “deal doers” who are lean and mean? The … Continue reading “Building a platform”
Some lessons from Skyscraper Dreams
Finally finished Skyscraper Dreams over the weekend. Lessons learned: It’s best to start a real estate business when it’s possible to leg into 20% caps (this is now impossible); Ideally, you would build your 20% caps in a city destined to become the world’s financial capital, so that you would also benefit from massive land … Continue reading “Some lessons from Skyscraper Dreams”
4443 Willow Brook is for sale (again)
Don’t get excited. I’m not breaking my prohibition against selling any more properties. 4443 Willow Brook is a 10 unit complex Jon and I renovated in 2010-11 via our old entity, Better Dwellings. We sold it in 2012 for $2.1MM, which was around 10x the rent. Whoops. We made a bunch of money on the … Continue reading “4443 Willow Brook is for sale (again)”
How to handle weather-related construction delays
El Nino is finally here and we’re pretty well prepared, at least with respect to the existing portfolio. But, unsurprisingly, construction workers generally don’t love working in the rain. And that confronts us with an irritating dilemma. We can: Suck up the resulting construction delays; or Bonus the workers (either directly or via their employing … Continue reading “How to handle weather-related construction delays”
Skyscraper Dreams
I don’t write about books much on this blog, but I’m a major reader. And, because I’m a real estate nerd, a lot of the books are either about real estate itself or related fields (like private equity, corporate takeovers, etc.). Am reading one now that’s got a ton of interesting anecdotes and thought I’d pass … Continue reading “Skyscraper Dreams”
2015 Year in Review
Thought I’d take this opportunity to let you all know where we are as 2015 comes to a close and what we hope / expect for next year. During 2015: We acquired 11 buildings in which we have ownership stakes (and helped other groups acquire a whole bunch more); As I write this, we’re in the … Continue reading “2015 Year in Review”
Why we’re going to build a lot of studios not one beds
As you know, Adaptive is moving towards doing more ground-up construction projects. As we do, we’re learning more and more about the zoning code and how it shapes what gets built here. And as I learn, I’m going to share with you. So, that said, here’s an interesting factoid: The LA zoning code makes it almost … Continue reading “Why we’re going to build a lot of studios not one beds”
A gap in the lending market
Today I want to talk about a major gap I see in the lending market. As a real estate entrepreneur, your choices for loans generally boil down to: Bank loans, which cost in the range of 3.5-4.5% but are painful to get (because of the underwriting process) and take 30-60 days to close; or Private … Continue reading “A gap in the lending market”