Right now, if you have the cash to put down a big downpayment, you’re almost certainly better off buying a larger complex versus a smaller one if the prices are the same.* Why? Like almost everything else in real estate, it comes down to interest rates, affect the market in two discrete ways right now: … Continue reading “Got cash? Larger buildings are better than smaller ones”
Author: Moses Kagan
Are LA apartment building prices entering a bubble?
Recently, prices for apartment buildings in Los Angeles have been increasing rapidly. 12 months ago, you could find buildings in improving neighborhoods for less than 10x annual gross rents. Now, the range is more like 10.5-11.5x for larger buildings and up to 14x for smaller buildings. Inventory in all asset sizes is also very slim … Continue reading “Are LA apartment building prices entering a bubble?”
One of the ways a bad broker kills a seller
When you list your rent-controlled apartment building for sale, your broker will almost always include what are called “pro forma” or “market” rents in the listing published on Loopnet and the MLS. These are the rents the broker believes the units would achieve were they available on the open market. Getting them wrong is one … Continue reading “One of the ways a bad broker kills a seller”
Buy what nobody wants
Am up to my neck in deals right now, which I’m not complaining about at all. So today’s post is going to be short and sweet. I want to impart an idea about investing, in general, and real estate investing, in specific: Buy what nobody else wants right now. By definition, if no one wants … Continue reading “Buy what nobody wants”
Passive real estate investing part 3: Funds
We’ve previously discussed why active real estate investing can be challenging for individual investors here. And then we talked about investing in syndicated deals. This post is about investing in real estate funds, also called “blind pools”. The kind of funds we’re interested in today don’t start out owning any properties (the ones that do … Continue reading “Passive real estate investing part 3: Funds”
Passive real estate investing part 2: Syndicated deals
As discussed in this post, one of the ways to invest in real estate without working on it full time is to put your money into a syndicated deal. Here’s how that works: A syndicator is a professional investor who finds a property to buy and then arranges to obtain both the debt and the … Continue reading “Passive real estate investing part 2: Syndicated deals”
How to invest in real estate passively (part 1)
A few people have asked me recently how you can invest in real estate without doing it full time. It’s a good question, because, as a part-timer, you are competing with other investors who have some built-in advantages, including: Ability to buy all-cash and close quickly A network of brokers who funnel the best deals … Continue reading “How to invest in real estate passively (part 1)”
What’s a “short-sale”, and should you offer on them?
Recently, I’ve been working with a lot of buyers who bring me short-sale deals to potentially write offers on. Thought I’d take some time to explain what a short-sale is, how the process works, and what the pitfalls are in offering on them. A short-sale is a listing where the price asked for the property … Continue reading “What’s a “short-sale”, and should you offer on them?”
Reunions!
Today’s post is short and sweet (at least, sweet for me)… I’m back at Princeton for the weekend for my 10th Reunion. I plan to catch up with some old classmates, drink some really cheap, awful beer, and bore the hell out of a few people by droning on about real estate while they’re just … Continue reading “Reunions!”
Why you always ask for a detailed rent roll
If you spend a lot of time looking at apartment building listings on the MLS, you will eventually notice an extremely annoying trend: Brokers who list the total amount of rent generated by the building but not providing a detailed, unit by unit breakdown. Why do they do this? It’s probably some combination of laziness … Continue reading “Why you always ask for a detailed rent roll”