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”
Category: Development
Another trip to SF and why I hate setbacks
Just got back from a trip to NorCal, during which I drove through San Francisco twice. Could not stop staring at the buildings, which are generally built all the way to the lot lines in the front and on the sides of the parcels. It’s just shocking how much better a city looks with no … Continue reading “Another trip to SF and why I hate setbacks”
A little taster from the front lines of LA’s parking wars
If you’re wondering why we have a shortage of housing in Los Angeles, I’m here to shed a little light. We recently bought a duplex with the plan of adding a second story and two more units. This is exactly the type of deal the city should love: We’re adding additional housing to a neighborhood … Continue reading “A little taster from the front lines of LA’s parking wars”
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”
Some before and after pics of our latest project
Just finished a fourplex on in Silver Lake for a fee for service client. Here are some before and after pics for your viewing enjoyment: Kitchen / Living Bathroom Exterior Parking area
Why we avoid pre-1920s buildings
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”
Another idea for real estate entrepreneurs
At the ULI discussion last night, I was asked about opportunities I see for young entrepreneurs wanting to get into real estate. I gave a fairly macro answer about the middle class returning to big cities and how that is going to continue to drive increases in rents and property values in urban centers. But … Continue reading “Another idea for real estate entrepreneurs”
Why I don’t talk about cap rates
About 10 times a week, people ask me what kind of cap rates I expect from our deals. In my answers, I strongly resist using the term cap rate, to the point that people think I’m a little strange. This is kind of weird, right? Any book you read about investment property is going to … Continue reading “Why I don’t talk about cap rates”
Adding value to apartment buildings: Sometimes more art than science
One of the problems we wrestle with is how much to spend on improvements to a building where the impact on rents in unquantifiable. With most improvements, we have internal numbers we use to predict how much additional rent we’ll get. These internal numbers derive, in part, from so-called “natural experiments” we have conducted in the … Continue reading “Adding value to apartment buildings: Sometimes more art than science”
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”