Today I want to talk about a major gap I see in the lending market. As a real estate entrepreneur, your choices for loans generally boil down to: Bank loans, which cost in the range of 3.5-4.5% but are painful to get (because of the underwriting process) and take 30-60 days to close; or Private … Continue reading “A gap in the lending market”
Category: Buying
Genesis of a great deal
Today, we’re closing on a 4plex that warrants some special attention. It’s in a good neighborhood, it’s ~4700 sq ft, and we’re buying it for $810k, or $172 / sq ft. That’s a great deal in a neighborhood where the cheapest comp I can find in the last six months sold for $300 / sq. … Continue reading “Genesis of a great deal”
Should I buy a condo as an investment?
Had two conversations with people interested in buying condos for investment purposes yesterday, so figured I’d repeat what I told them here. The first thing to understand about buying condos (and single family homes) in Los Angeles right now is that doing so is not really an investment. Why? Because prices are so high relative … Continue reading “Should I buy a condo as an investment?”
Yet another irritating appraisal issue
Just had an annoying issue pop up on an appraisal one of my agents commissioned and thought I would share. This is a deal where we are representing the buyer of a somewhat run-down fourplex in an improving area. The buyer intends to spend some money upgrading the property post closing. However, the appraiser is … Continue reading “Yet another irritating appraisal issue”
Something I’m pretty bad at
I’m pretty bad at doing deals for myself and my family (as opposed to doing them on behalf of investors). Why? With investor deals, we’re not capital constrained. We raise all of the cash necessary up front and are therefore in a position to make optimal choices vis-a-vis renovations, etc. With family deals, I’m always … Continue reading “Something I’m pretty bad at”
When will I be done?
Someone asked me last week when we have enough units to be “done”. The question threw me for a loop, because it’s something I’ve never really considered. That’s weird, right? I’m on a journey to build a big business investing money in apartment buildings and I’ve never really considered what the end-point is. I couldn’t … Continue reading “When will I be done?”
Why we pull the permits and how we share them with clients
Here’s an annoying catch-22 in which we often find ourselves in the brokerage business: Obtaining permits for a client. To understand why, you first need to understand how important it is to pull the permits on any building before buying it. The idea of the due diligence process conducted during the contingency period is to … Continue reading “Why we pull the permits and how we share them with clients”
Remember to do this before inspecting a property
Our agents have got pretty busy helping people buy apartment buildings, so I have been spending more time than usual advising on deals. One of the issues that keeps popping up is around inspections. As a buyer, it is imperative you personally inspect each and every unit in any building you intend to purchase. After … Continue reading “Remember to do this before inspecting a property”
Why we haven’t done commercial deals
“So, why don’t you guys do commercial deals?” I get asked that question a lot, so I figured I’d answer it here. The first thing to say is that we absolutely would do a commercial deal given the right balance between risk and reward (and investors who wanted to follow us into it). But I … Continue reading “Why we haven’t done commercial deals”
Do single family home rentals work in LA in 2015?
One of our clients asked an interesting question yesterday that I think worthy of some discussion here: “Has Adaptive done any single family home deals where the rental numbers would work out to at least cover PITI after fixing up the property?” In other words, can you buy a single family home as a rental … Continue reading “Do single family home rentals work in LA in 2015?”