Category: Buying

The math underlying the apartment repositioning business is simple: It comes down to the relationship between the price at which we can buy buildings and the rent we can achieve for renovated units. Because we started doing this pretty much at the bottom of the last recession, for our entire career, both prices and rents … Continue reading “Buyers beware”

We just cancelled escrow on a deal that I thought was pretty likely to end up a 7% unlevered return. How do you pass up a deal like that, particularly in this market? I know this is going to sound crazy to long-time readers, but, sometimes, it’s not about the numbers. On this particular deal, … Continue reading “Who passes on a 7% unlevered deal?”

Tomorrow, am headed to RealShare, which is the premier LA multifamily event. Why?   A huge part of doing deals is having the relationships necessary to get your offer picked over others’. Those relationships generally get created during deals. The more you close, and the better you behave, the more brokers like you. But it’s easy … Continue reading “Heading to RealShare tomorrow”

The diligence process for a multifamily building is complex. In essence, you are buying a small business, often using a lot of debt. And, if you’re buying the kind of beat-up buildings in which we specialize, often you’re doing the deal with missing / incorrect information from the seller. To make sure you don’t miss … Continue reading “The importance of a diligence checklist”

Someone asked me this weekend what, exactly, I do all day. The truth is, many days, I don’t do much more than read. Sure, people come into my office for guidance on how to handle tricky issues. But, in those cases, I try to get the person asking the question to make a recommendation, which … Continue reading “What I do all day”

I love Quora, the question and answer site. But, multiple times per day, people post questions like “Is buying an apartment building a good investment?” or “Should I buy stock?” or whatever. These are dumb questions, because whether an asset is good to buy is 100% determined by the price. For example: Imagine a run-down buildingon a … Continue reading “There are no bad assets”

One of the key insights in Howard Mark’s book, The Most Important Thing, which I love, is that you can’t predict a recession with any certainty. All you can do is (i) know that the pendulum always swings back; and (ii) observe where the pendulum is currently. It’s pretty clear that the pendulum is currently … Continue reading “Thinking about the next recession”