It’s really not that hard to update the MLS on the status of your listings. It takes about five seconds to tell them to switch your property from “active” (in other words, available for someone to buy) to “pending” (in other words, under contract to be sold). And yet a small but non-zero number of … Continue reading “Forgive me for venting”
Category: Buying
When a deal goes bad
If you make enough deals, eventually one goes sour. Here’s one that went sour on me… We were looking into developing some small-lot sub-division homes in Silver Lake. We found a lady selling a house on a properly-zoned piece of land. We contacted her next door neighbor, whose duplex wasn’t for sale, and convinced him … Continue reading “When a deal goes bad”
What happens if you refuse to remove contingencies
When you go into contract to buy a piece of property, you typically get a contingency period during which you have the right (and obligation!) to perform a thorough investigation of the condition of the property and title thereto. Usually, the stuff you’ll find is tolerable and you can negotiate a price reduction from the … Continue reading “What happens if you refuse to remove contingencies”
Multi-Family Millions: The book that started my career
If you’re interested in making money from re-positioning apartment buildings like we do, you should read Multi-Family Millions, by Dave Lindahl (that’s not an affiliate link; I don’t get paid if you buy it). A few warnings: The book is cheaply made. It feels like someone self-published it out of vanity. I recommend getting the … Continue reading “Multi-Family Millions: The book that started my career”
Who to bring with you to an inspection
Once you get a property under contract, the clock starts on your physical inspection period (also called the “due diligence” or “contingency” period). This is the period, usually 10-14 days, during which you check the physical condition of the property. But most buyers aren’t experts in looking at all of the systems (foundation, roof, electric, … Continue reading “Who to bring with you to an inspection”
Avoid problems with the Los Angeles Housing Department
Pro tip: You don’t want to buy a building, only to find yourself in the middle of a war with the Los Angeles Housing Department (LAHD). Under the standard California real estate sale contract between seller and buyer, the seller has a duty to disclose any on-going issues that may effect the value of the … Continue reading “Avoid problems with the Los Angeles Housing Department”
How leverage (debt) magnifies outcomes
You heard me say in numerous pieces that leverage (debt) magnifies outcomes. What do I mean by that? Well, let’s examine two identical fourplexes with different capitalization structures. First, here are the operating details: Acquired for $600,000 Annual rents of $60,000 Assume costs of 35% or $21,000 Annual Net operating income (rents minus expenses but … Continue reading “How leverage (debt) magnifies outcomes”
Why do people hire dumb brokers?
Buying a home or income property is a big deal. You’re committing a chunk of your (or your family’s) hard-earned capital, plus taking on an enormous amount of debt. All kinds of things can go wrong, from structural problems, to tenant issues, to badly structured loans, to city inspection concerns, etc. So why do people … Continue reading “Why do people hire dumb brokers?”
My problem
I have a problem: I find good deals every week but I don’t have the money to buy them all myself (even though I want to!). So my solution is to find like-minded people who want to own apartment buildings and help them buy the deals I find. But how do I find these wonderful … Continue reading “My problem”
Mortgages: Borrowing to save
With a mortgage, you borrow to save. Sounds weird, right? Let’s take a look. Do you know what actually happens with a mortgage payment? Sure, you send it off to the bank each month (or, more likely, it’s deducted from your bank account automatically). But do you know what’s really going on? The easiest way … Continue reading “Mortgages: Borrowing to save”