This blog is mainly about the rules and numbers underlying the Los Angeles apartment business. Regular readers know all about the whole process, from identifying deals, through renovating, leasing and management. I’m not going to sugar-coat it: This business can be a real slog sometimes. (All businesses are; no one gives you money for free.) … Continue reading “Want to see what we make?”
Author: Moses Kagan
Why every last dollar of rent matters
Sometimes people question why it’s so important to get that last dollar of rent. On a $2800 apartment, does an extra $100/month matter? After all, $100 is only 3.6% of $2800… no a big deal, right? Wrong. Here’s how we think about rent in our business: All buildings are worth some multiple of their total … Continue reading “Why every last dollar of rent matters”
Is it too late to buy?
A lot of people are wondering whether it’s already too late in the cycle to buy. After all, prices have bounced back up off the floor of 2009-10. For context: I sold a bunch of totally renovated buildings in 2011-12 for 10-10.5x the rents. I would get 11x all day right now, and possibly more. … Continue reading “Is it too late to buy?”
How CA residential leasing law hurts poor people
The courts have screwed up unlawful detainer (eviction) in California and it’s hurting poor people. Here is the current situation with leasing in CA: Courts won’t enforce a lease provision through which tenant waives jury trial (see this article for the background); and Courts won’t enforce arbitration provisions in residential leases (see here) (arbitration is … Continue reading “How CA residential leasing law hurts poor people”
Adaptive investor letter
Thought everyone might enjoy a glimpse into how we handle investor relations here at Adaptive. Per the terms of the Adaptive Realty Fund 1 operating agreement, we are required to share quarterly financial reporting with our largest investor. In order to be fair to all of the investors, we decided to make the same financials available … Continue reading “Adaptive investor letter”
Possibly the most important thing you can put in a residential lease
Here it is: “If any legal action is brought by Tenant or Landlord related to this Agreement, the prevailing party shall be entitled to recover attorneys fees not to exceed $500.00.” Why is this so important? There exists a class of tenant advocacy lawyers who make their living in the following way: Tenant fails to … Continue reading “Possibly the most important thing you can put in a residential lease”
Are you an investor or a speculator?
Market prices are up across the entire city. Where you could once buy stuff for 10x GRM, almost everything is now 12x+. If you’re looking at deals now, it’s important not to get caught up in thinking about buildings relative to each other. At any time, I can tell you what the best thing to … Continue reading “Are you an investor or a speculator?”
When do you need a lawyer?
I spend an awful lot of time negotiating relatively small/low value agreements with other agents, tenants, owners, etc. Pretty often, I find myself drafting contract language, because the matter at hand is small enough that its not worth spending thousands of dollars on a lawyer. That’s obviously ok for my own deals. After all, I … Continue reading “When do you need a lawyer?”
Construction at 1947 Clinton
Construction continues apace at 1947 Clinton St. in Echo Park, a 4plex we bought in December. Here’s a shot of one of the kitchens partially installed: These units are going to be amazing: All are 3 bed / 1 bath 3 out of 4 have parking All have private decks or big private outdoor spaces … Continue reading “Construction at 1947 Clinton”
The tenants are important
“When you’re buying a rent controlled building,” I said to the buyer during an inspection yesterday, “the tenants are at least as important as the physical condition of the building.” This is kind of counter-intuitive, right? After all, tenants come and go, but you plan to own the building for a long time. But, under … Continue reading “The tenants are important”