Here’s what I saw when I looked in the door of our latest project, a five unit deal in Echo Park, today: I know it looks messy in there, but that view gives me such a huge high! What you’re looking at in that picture above is the sweeping away of the old. All the … Continue reading “BAM! Back to work…”
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Private lenders are out of their minds
Am looking at buying a small apartment building and using a 50% LTV loan to do it. Why do I need to borrow money, when I have a loads of cash committed to my fund from investors? Because I’m judged by my investors based on the annual return I generate for them. Because return is … Continue reading “Private lenders are out of their minds”
One way to spot un-permitted electric
Have seen this on two buildings recently, so figured I’d share. On modern buildings, all of the electrical meters are grouped together on one big panel, called a “combo” panel. It’s usually in the front of the property near where the electric wire drops from the nearest utility pole to provide power. Back in the … Continue reading “One way to spot un-permitted electric”
An (almost) free way to stimulate the LA economy
Previously, we’ve discussed how an equation embedded in the Housing Department’s Primary Renovations program is responsible for perpetuating slum conditions in rent control buildings. Today, I want to suggest a simple change to the equation that would, I believe, kick off a large wave of construction in LA benefiting all of us while costing very … Continue reading “An (almost) free way to stimulate the LA economy”
My policy on meetings
I take them. With anyone who asks. Why? First, there’s a bit of altruism at work. I’ve made a ton of mistakes in this business and I am happy to share my experiences with people so they don’t make them, too. Second, I genuinely like talking to people about real estate (and lots of other … Continue reading “My policy on meetings”
One problem with leverage
Right now, with interest rates at historic lows, buyers are being tempted to use a lot of leverage when they buy apartment buildings. As we’ve discussed before, leverage magnifies outcomes, both good and bad. Today, I want to look at how one downside of leverage can manifest itself on larger apartment buildings. But you need … Continue reading “One problem with leverage”
The $100,000 eviction
I got a call from a regular reader the other day about his building in Los Angeles. I’m going to share his story and I hope he won’t mind. This guy has several great, normal tenants and one low-paying, rent controlled tenant who has a kid with pretentions to gang-bangerness. The kid has done all … Continue reading “The $100,000 eviction”
Walking away
We walked from away from a deal yesterday and it still hurts. This building looked like a winner for us: Huge units, high ceilings, incredibly cheap price, tenants who we thought we could buy out. But there wasn’t any parking and the neighborhood was improving but not great. There’s an art to evaluating these kinds … Continue reading “Walking away”
How one little equation perpetuates slum conditions
Dave C commented on yesterday’s post asking, in effect, what can be done about a rent control building which is deteriorating. The short answer is: nothing. The reason is one little equation. If you’re the owner of a rent-controlled building with below-market tenants in Los Angeles, your tenants are never leaving. You can’t raise the … Continue reading “How one little equation perpetuates slum conditions”
Rent control and slums
Spent a bunch of time recently talking to tenants in a 1920s building. They told the story of how their building turned into a slum. In a nutshell: The owner 30 years ago used to live in the building. He took a lot of pride in the building and fixed all problems immediately. Then he … Continue reading “Rent control and slums”