Regular readers have heard me bang on about the importance of estoppels for months now. But two brokers have recently asked me to have my clients remove contingencies before providing them, so I feel like it’s a good time for a reminder… NEVER REMOVE CONTINGENCIES WITHOUT SEEING ESTOPPELS At this point, new readers are probably … Continue reading “Estoppels estoppels estoppels”
Category: Brokerage
Who takes the appraisal risk on an FHA loan
Just had a client get a counter back from a seller with the following language: “Buyer has offered to purchase property over List Price. Appraisal is NOT a contingency of this sale. Buyer accepts responsibility between appraised value and sale price if any occurs.” What does the seller mean? What he’s saying (in language which … Continue reading “Who takes the appraisal risk on an FHA loan”
Why you can’t just compare LA and Santa Monica cap rates
Spent some time over the past few days looking at properties in Santa Monica and West Los Angeles for investors. As I looked at buildings in both places, I started to realize that you can’t really compare them easily. Why? Theoretically, you should be able to. After all, a cap rate is a cap rate, … Continue reading “Why you can’t just compare LA and Santa Monica cap rates”
How low interest rates are changing the multifamily market
Had a quick conversation with a loan broker last night about the loans available on 5+ unit apartment buildings right now. You can now get a 5 year fixed, non-recourse bank loan for 3.62% interest. Let’s take a look at what that means by using the example of a 5% cap deal, which is a … Continue reading “How low interest rates are changing the multifamily market”
Seeking an intern
Got such a good response from my post about needing introductions to hard money lenders that I figured I’d try again. This time, am looking for a part-time intern to help with data analysis and acquisitions. The work could be done from home or from my office downtown. I can’t promise that all of the … Continue reading “Seeking an intern”
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”
Due diligence questions
The due diligence period, also called the contingency period, is the buyer’s chance to learn everything he can about the building before making a decision about whether to buy it. If you don’t ask your questions during the diligence period, and something comes up later, it will be too late to back out. Remember: You’re … Continue reading “Due diligence questions”
Congrats, Chris and Cat!
Just closed an incredibly difficult fourplex deal in Boyle Heights, involving vacating tenants, a bunch of rehab, and re-negotiating the price a few times (due to appraisal issues), with Chris and Cat, two clients and (now) friends. Some deals are smooth. Some aren’t. This one, frankly, wasn’t. I learned a ton (I’m always learning) and … Continue reading “Congrats, Chris and Cat!”
How long should the contingency periods be?
As we’ve discussed before, when you write an offer on an apartment building in Southern California using the standard purchase agreement, what you’re really doing is handing the owner a proposed purchase contract filled out with the terms upon which you are prepared to buy the property. Theoretically, the owner could just sign the offer … Continue reading “How long should the contingency periods be?”
Managing risk
The more deals I do, the more I realize the importance of managing risk. Buying a property is kind of like a teenage seduction. Each side shows a little skin, then waits to show more until the other side shows some. First the buyer offers a price. Then the seller counters. Then the buyer accepts. … Continue reading “Managing risk”