As regular readers know, I do two kinds of deals: Deals with investors, where I am generally given discretion to make all decisions relating to buying, renovating, and managing the property in question; and Deals I broker, where I am simply an expert intermediary (hopefully) helping my client to deploy capital into the multifamily space. … Continue reading “Why being a broker is sometimes harder than being a buyer”
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How to think about debt on a single family house
Have been helping a few people make FHA offers on 3-4 unit apartment buildings. The lenders are very interested in making sure that the buildings are self-sufficient (in other words, that the cashflow from the buildings covers enough of the mortgage payments, taxes, etc. so that the building isn’t a drag on the borrower’s cashflow). … Continue reading “How to think about debt on a single family house”
What’s a prelim?
When you buy a property, you want to be pretty damn sure that you’re getting clean title. In other words, you want to be sure that no one else has any claim to the property you are acquiring. During the inspection period described in the purchase agreement, the buyer has the chance to review and … Continue reading “What’s a prelim?”
Knowing your potential tenants
People always ask me why I haven’t expanded our business into the Valley. After all, there are tons of buildings out there and clear opportunities to make money. The reason I haven’t is that I don’t understand the tenants in the Valley, so I’m not comfortable that our organization would know how to deliver a … Continue reading “Knowing your potential tenants”
What an inspection report looks like
Just had an inspection yesterday on a property and realized that most buyers are unfamiliar with the whole concept of an inspection report. An inspection report is a long pdf produced by a professional inspection firm that you hire to help you perform your physical inspection of a property you are considering buying. Depending upon … Continue reading “What an inspection report looks like”
The Magic Number for FHA Loans
12. That’s the magic number for FHA loans on 2-4 uni apartment buildings. It stands for 12x the annual rents. Why is 12x grm the magic number for FHA loans? 12x a building’s total annual rent (including the fair market value rent of the unit you will occupy) is basically the maximum price you can … Continue reading “The Magic Number for FHA Loans”
How to start a settlement negotiation
I remember when I first got started buying and renovating apartment buildings, a broker told me that if you haven’t been sued yet, you’re not really in the business. Fortunately for me, I’ve avoided being sued so far. But that doesn’t mean I haven’t had to discuss settlements with people. Everyone once in a while, … Continue reading “How to start a settlement negotiation”
The dispensary ban
When Lucy and I arrived in LA in 2007, we had never heard of a medical marijuana dispensary. They don’t exist in London, where we used to live. I distinctly remember thinking “19 year old Moses would have thought these were pretty cool.” Now, in what may be a symptom of growing up (or getting … Continue reading “The dispensary ban”
Disclose, disclose, disclose
Am doing a bunch of deals right now and keep running into the same problem: Buyers Sellers being slow to disclose issues with their properties. Bluntly, this is stupid. I’m not a lawyer, but I can tell you with 100% certainty that, by not disclosing problems with your property during the sale process, you are exposing … Continue reading “Disclose, disclose, disclose”
Today’s agenda
Here’s what’s happening today: Meeting a potential client for coffee in the morning Finding out if a second appraisal hits for some clients for whom I’m brokering a fourplex deal; either it hits and I get paid all the work I’ve done on the deal over the past month or it doesn’t and I get … Continue reading “Today’s agenda”