Recently, I’ve been mulling the idea of buying an industrial building and cutting it up into affordable artist studios. I have observed that these kinds of deals can work pretty well if you get the property very cheaply and keep your renovation costs low. You obviously also have to be in an interesting area… but we … Continue reading “Creating an arts space”
Category: Development
Overbuilding in Glendale
Big developers make money by building huge projects. Therefore, they make choices about where to build based more on where they can, as opposed to where they should build. In LA, the result of this kind of thinking is the apartment building boom currently going on in just three neighborhoods: Hollywood, Downtown, and Glendale. There are … Continue reading “Overbuilding in Glendale”
Crime and design
Our go-to moves when we renovate older buildings include radically expanding the windows and adding sliding doors. Check out this picture I snapped in an eight unit project of ours nearing completion: It’s pretty obvious why we do this: More light (which is why the rest of the shot looks so dark!) and creating a flow … Continue reading “Crime and design”
Boyle Heights
One of our agents created a flyer last week inviting renters downtown to a bike tour of Boyle Heights, a close-knit, working class, majority Spanish-speaking community east of the Arts District, with the intention of showing people the neighborhood so that they could possibly buy homes or small apartment buildings there. The flyer ended up circulating … Continue reading “Boyle Heights”
How we think about rents
Probably the most important part of our renovation projects comes at the very beginning, when we need to estimate the rents. Why? Because we think about deals backwards: Start with the estimated rents at completion This allows you to estimate both the stabilized yield (for a buy-renovate-hold play) and of the exit valuation (for a flip) … Continue reading “How we think about rents”
Rent vs. buy
This article in the Times is worth reading. The argument is basically that we’re entering bubble territory in single family home pricing in the main coastal cities. I think the rent estimates they’re using may not reflect the rents that are actually getting paid. That said, when I see small houses on small lots in … Continue reading “Rent vs. buy”
What’s wrong with downtown?
I just came from a conference called the “Future of Downtown”. Onstage were a whole bunch of the key players in the development boom downtown, including the head of Mack Urban, the West Coast guy for Brookfield, the head of EVOQ, etc. All the talk was about how great downtown is / will be. Cool … Continue reading “What’s wrong with downtown?”
3210 Bellevue is done
Signed the last lease on Monday. We’re at $122,160 / year gross, a bit better than I expected when we bought the property last summer. I’m estimating the unlevered yield at around 8.7% / year… not amazing, but definitely a big win in today’s market. If lending markets were rational, I’d be able to refi … Continue reading “3210 Bellevue is done”
A terrible, terrible feeling
Was looking through some public records yesterday and came across this little bit of heartbreak: 1516 Micheltorena LLC was us, through our old entity, Better Dwellings. We purchased the property from Kinsling in September of 2010. We bled and sweated over that property, transforming it from a beat-up old dump into a beautiful place to live. … Continue reading “A terrible, terrible feeling”
Why did I sell?
That’s how I feel about nearly every one of the deals I’ve ever sold (16 so far, 13 renovated through Better Dwellings and three completed through Fund 1). Why did I sell? Because I’ve always done deals with investor money, and investors always (understandably) want to get paid. And, because we don’t really make a … Continue reading “Why did I sell?”