When I re-position a building, the numbers often look something like this: I buy the building for $1MM, spend $500k on renovating it, and then ask a lender or buyer to believe that the building is now worth $2MM, based on the rents I am achieving from the new tenants. Now, obviously, the lender or … Continue reading “How you get them to believe a $1MM building is now worth $2MM”
Category: Development
Inspection Day and Closing Day
Busy day today, so I thought I’d keep it kind of brief and just give you a run-down of what I’m up to: 1. Am helping clients with inspections on a beautiful 1920s fourplex they’re thinking of buying Boyle Heights using an FHA loan. We’ve been at this one once before, but one of the … Continue reading “Inspection Day and Closing Day”
LA’s crazy Metro system
Want to see something really insane? Check out the location of the Gold Line Extension stop at Pico / Aliso (the little red “A” on the map below): Can you figure out why I hate the placement of this station? Here’s a hint: Look at the use of the land on the north side of … Continue reading “LA’s crazy Metro system”
Grandfathered zoning in LA
What does “grandfathered zoning” mean with respect to apartment buildings? To understand that, you first need to understand that zoning in Los Angeles has generally become stricter over time. For a long time, there wasn’t any zoning. You could just buy a few single family homes, rip them down, and put up an apartment building. … Continue reading “Grandfathered zoning in LA”
When a deal goes bad
If you make enough deals, eventually one goes sour. Here’s one that went sour on me… We were looking into developing some small-lot sub-division homes in Silver Lake. We found a lady selling a house on a properly-zoned piece of land. We contacted her next door neighbor, whose duplex wasn’t for sale, and convinced him … Continue reading “When a deal goes bad”
Here’s a worthwhile strategy
Got some cash and looking for a strategy? Here’s one I like but don’t do myself: Buy a REO single family home on a 6,000 sq. ft. lot zoned R3 or RD1.5 all cash for maybe $300k Rip it down Build 4,000 sq ft fourplex made up of 4 2 bed / 2 bath units, … Continue reading “Here’s a worthwhile strategy”
Good reading on zoning and sprawl
Happy Monday! Have recently read two great, short pieces on the effect of terrible zoning on cities, in general, and LA, in particular: David Leonhardt’s interview with Matthew Yglesias in the Times. Yglesias talks about how parking requirements and artificial limits on density conspire to drive up the cost of housing (and, thus, living) in … Continue reading “Good reading on zoning and sprawl”
Introduction to Los Angeles Zoning
Get it through your head: The land is important! Too many buyers don’t understand that the land component of a property is potentially it’s most important aspect. Why? Well, buildings all fall down in the long run. But land is unchanging and often has potential. What do I mean by potential? Well, in the absense … Continue reading “Introduction to Los Angeles Zoning”