I love buildings built in the 1920s, but I rarely buy buildings built before that. Why? It has to do with how the buildings were built. By the 1920s, Los Angeles construction practices were not that different from today’s. Layouts, door width, ceiling height, spacing between studs, size of lumber used – all are quite similar to … Continue reading “Why we avoid pre-1920s buildings”
Category: Buying
What happens when a sub-market gets hot
Here’s one of the irritating things that happen when a neighborhood gets hot: Amateurs jump in. Someone puts a good deal on the market. Amateurs, seeing the kind of rents we get but not how much it costs to get them, bid the price up. We lose the auction. The amateur wins the auction but fumbles the … Continue reading “What happens when a sub-market gets hot”
All about earthquake shut-off valves in Los Angeles
Was at an inspection yesterday and got an interesting question from the listing broker, which I think deserves an answer here. The building in question, which was built in the late 1980s, had one earthquake shut-off valve installed on each bank of gas meters. For those who don’t know, an earthquake shut-off valve is a … Continue reading “All about earthquake shut-off valves in Los Angeles”
Why it all comes back to judgement
One of the under-appreciated qualities that go into doing what we do is judgement. Almost every project brings with it unanticipated problems, from the trivial to the potentially severe. At this point, I think it’s fair to see that we’ve seen the majority of these problems before and know the solutions. But, even now, after … Continue reading “Why it all comes back to judgement”
Why I’m no longer a seller
Back when we started, Jon and I needed to sell renovated buildings. The reason was pretty simple: We needed the dough. When you’re in the money management business, you generally don’t see much in the way of money yourself until you make your partners money. They don’t take it on faith; they want cold hard … Continue reading “Why I’m no longer a seller”
Dealing with contingency removal anxiety
Yesterday, we removed contingencies on the second deal for Adaptive Realty Fund 3. No matter how many times I do this, I still get a major hit of anxiety during the days leading up to the contingency removal. I obsessively check and re-check the diligence. I harass the contractors about their bids (Is this included? … Continue reading “Dealing with contingency removal anxiety”
What I want to buy
I’m always looking to buy screwed up buildings in interesting areas for reasonable prices. What does that mean? Well, by screwed up, I mean buildings with: Below market rents Deferred maintenance Obsolete layouts Because I intend to renovate these buildings, I don’t care that much about the existing income or expenses. Instead, I care about … Continue reading “What I want to buy”
You can’t juke the operating expenses
There’s another broker with whom I’m acquainted who always seems to have amazing deals to show her clients. Every week or so, I see her pitching deals with 8-10% cash on cash returns. Eventually, I started to get curious. After all, this is a tough market. I have every advantage in the world, and it’s not easy for … Continue reading “You can’t juke the operating expenses”
What I’m a sucker for…
I have a deep, embarrassing, long term addiction to low price per sq ft deals. There, I admitted it. Do you know why I’m addicted? It’s pretty simple: 1. On the tenant side, buying for a really low per sq means that you can offer large apartments at relatively low, per sq ft rents and … Continue reading “What I’m a sucker for…”
A well-run sale process
We’re currently participating in an interesting sale process, so thought I’d share the details. The seller and listing broker have chosen to run their process differently than most and will, I think, achieve better than average results. To understand what they’re doing differently, you first need to understand how a normal process works. In a … Continue reading “A well-run sale process”