We walked from away from a deal yesterday and it still hurts. This building looked like a winner for us: Huge units, high ceilings, incredibly cheap price, tenants who we thought we could buy out. But there wasn’t any parking and the neighborhood was improving but not great. There’s an art to evaluating these kinds … Continue reading “Walking away”
Category: Development
4443 Willow Brook – Sold!
We just exited another deal: 4443 Willow Brook, a 12 unit building in rapidly gentrifying East Hollywood. Here’s an exterior pic: Here are the numbers: Acquired for $925k in July 2010 Renovated for $700k All in for $1,625,000 Rent roll of approximately $217,000 / year when we stabilized it Extracted approximately $200,000 in cashflow while … Continue reading “4443 Willow Brook – Sold!”
Never, ever reduce unit count
One of the contractors I use a lot recently did a rehab of a small apartment building in Silver Lake. He bit a lot of our style, but that’s life. When I asked him about the project, what he told me shocked me. Apparently, the genius who bought the place paid my contractor to turn … Continue reading “Never, ever reduce unit count”
Down with CEQA
The NY Times had a great piece yesterday on the legislature’s attempt to reform California Environmental Quality Act (“CEQA”). When then-Governor Ronald Reagan signed CEQA in the 1970’s, it may have been a good law. Now it’s an abomination that allows anyone who believes any project will negatively impact the environment to sue to halt … Continue reading “Down with CEQA”
Knowing your potential tenants
People always ask me why I haven’t expanded our business into the Valley. After all, there are tons of buildings out there and clear opportunities to make money. The reason I haven’t is that I don’t understand the tenants in the Valley, so I’m not comfortable that our organization would know how to deliver a … Continue reading “Knowing your potential tenants”
Ground up construction rules of thumb
As you know, I’m not a developer; I do rehab deals. That said, I’m a curious guy and I used to spend a lot of time looking for construction deals. Pretty often, when I was looking at potential projects, I used to find myself wishing for some simple way to estimate the cost of building … Continue reading “Ground up construction rules of thumb”
Our latest project
We recently closed on a 5 unit property in Echo Park which we’re doing with a partner. They put up the dough and we’re handling all the work of buying out the tenants, designing the renovation, doing the actual construction, and then leasing the newly-renovated units. When all is said and done, our partners will … Continue reading “Our latest project”
Why there are vacant lots in Los Angeles
Have you ever wondered why there are vacant lots in Los Angeles? Blame Prop 13. Proposition 13 is an amazing law for California property-owners. Passed through CA’s referendum process in the late 1970’s, Prop 13 sets property tax at 1.25% of a property’s original purchase price and restricts increases to 2% per year (until the … Continue reading “Why there are vacant lots in Los Angeles”
What you do before buying land for development (part 1)
Little known fact: Under federal law, if you buy a parcel of land that’s polluted, you become responsible for cleaning up the pollution, even if you weren’t the one who polluted it. I once was in escrow to buy a huge, sweet parcel on Sunset to develop into apartments. It turned out to be the … Continue reading “What you do before buying land for development (part 1)”
What’s a NNN (triple net) real estate deal?
Mostly, this blog covers apartment investing. That’s because apartments are the easiest part of the real estate game for new investors to enter and also the part that I know best. But there are other parts, some of them pretty interesting. Take NNN investing, for example. NNN (“triple net”) refers to a kind of commercial … Continue reading “What’s a NNN (triple net) real estate deal?”