Periodically, I write pieces on here about how our knowledge of achievable rents cycles back into our acquisition process. Wanted to give you a concrete example. There’s a deal we looked at several months ago that sold in the $700-750k range. At the time, not knowing as much about achievable rents, we thought the deal … Continue reading “Looking back at a miss”
Category: Buying
Welcome to the week of short posts
We got a deal that I think I really like over the weekend. However, the diligence period is only three days. There’s an unbelievable amount to cover in these three days: Physical inspections Reviewing leases, estoppels, rent roll, etc. Reviewing the permit records Compiling a construction budget for the rehab Confirming our pro forma rents … Continue reading “Welcome to the week of short posts”
Will we give free advice?
Here’s a paraphrase of an email I got yesterday: “I’ve been working with another broker. I can’t seem to find any deals. Can you please give me some free advice about what I should buy.” I don’t mean to pick on the guy who sent it, but this kind of email drives us crazy. Why? We’ve worked long … Continue reading “Will we give free advice?”
A few new deals
Just removed contingencies on two more deals. One is a fee for service deal with a long-term partner. The other is the first deal with the new pot of money we’re putting out. Both are pretty classic deals for us: 10 and 8 units, respectively Interesting bones Tons of deferred maintenance Improving areas near to … Continue reading “A few new deals”
How we forecast the rents
One of our key advantages in this business is our ability to accurately forecast rents for renovated units. We’ve previously discussed the importance of this skill: It’s understanding the rents that allows you to properly underwrite deals. We are able to do such accurate forecasting because we are constantly leasing renovated units in the neighborhoods … Continue reading “How we forecast the rents”
Introduction to Phase 1 environmental reports
Some of the money we’re deploying on behalf of an investor right now comes out of a 1031 exchange. For those who don’t know, a 1031 is a way to avoid paying capital gains on sale of an investment property by immediately purchasing another property with your sale proceeds. Arranging a 1031 exchange requires the help … Continue reading “Introduction to Phase 1 environmental reports”
How we would enter a new city
Have been thinking about what it would take for us to learn a new city. Other people do this by reviewing research reports and then visiting a few times for broker tours. That is not how we would do it. We would start with research in order to narrow down the choices to those cities … Continue reading “How we would enter a new city”
The two sides of our business
One of the weird things about our business is how different it looks to Jon and me. On my end, most deals are almost abstract. I can tell from the location, the building, the existing rents, and the price whether we can make money and how much. For me, then, it’s mostly about passively looking … Continue reading “The two sides of our business”
Why we’re different buyers
Had an inspection today of a property we may renovate. The broker was reassuring me that the owner had partially re-piped the building with copper. Unlike almost any other buyer, this does not matter at all to us. Why? Because we almost always repipe during our renovations (and do everything else). In fact, very little … Continue reading “Why we’re different buyers”
Should I buy this Airbnb apartment building?
Sorry for the lack of posts Friday and yesterday; have been swamped with work, blah blah blah. Anyway: Have been getting a lot of questions about a for-sale triplex which is described by the listing broker as an “Airbnb ‘cash cow’ in the heart of Silver Lake.” (I’m not linking to the listing, because I … Continue reading “Should I buy this Airbnb apartment building?”