Today, I’m going to try something new: Taking a look at a deal in one of our neighborhoods so that we can get a sense for what the numbers look like for the new owner. So, let’s take a look at an East Hollywood duplex that sold yesterday. I should start out by saying I didn’t offer … Continue reading “Taking apart a deal: An East Hollywood Duplex”
Category: Due Diligence
A terrifying Craigslist post
Just ran across this while checking up on the competition on Craigslist: We obviously run all our applicants’ credit checks ourselves, so we’re not particularly vulnerable to this kind of behavior. But many landlords will take a credit check form provided by the tenant and that’s definitely unwise, given the above. With rent control … Continue reading “A terrifying Craigslist post”
Just missed
I was trying to buy a small office building in East Hollywood. Because it was a former gas station, we were concerned it was contaminated. I spent an enormous amount of time trying to structure a deal that would put the risk on the owner, not me. Eventually, it became clear I couldn’t do it … Continue reading “Just missed”
The tenants are important
“When you’re buying a rent controlled building,” I said to the buyer during an inspection yesterday, “the tenants are at least as important as the physical condition of the building.” This is kind of counter-intuitive, right? After all, tenants come and go, but you plan to own the building for a long time. But, under … Continue reading “The tenants are important”
Banks and rents in LA
Right now, one of the biggest problems I see across multiple deals is the total lack of understanding of LA rent control among bank underwriters. Underwriters are the guys (and gals) who review the property and the borrower to help the bank decide whether- and how much- to loan on a given deal. Because they … Continue reading “Banks and rents in LA”
How apartment investing can turn ugly right now
When I buy apartment buildings (or help other people buy them) I am ruthlessly focused on the cashflow they generate in year one. I don’t factor in rents increasing, nor do I factor in price increases stemming from rent increases. I want to know what the cashflow is RIGHT NOW. Many buyers to factor in … Continue reading “How apartment investing can turn ugly right now”
Grabbing talent where you find it
Almost forgot to post, which would have broken my streak! We’re in the process of selling a 16 unit building we rehabbed over the past few years. The buyer brought along an inspection company we’ve never seen before. After watching them work for an hour or so, without planning it, both Jon and I separately … Continue reading “Grabbing talent where you find it”
Mold inspection?
Am doing an inspection today on a building where the owners’ disclosures indicated that they previously had a mold problem. They also gave mold disclosures to some tenants. So we’re bringing a mold inspector to the inspection. Here’s how they work (I didn’t know this until yesterday): You pay an inspection fee (they quoted $750 … Continue reading “Mold inspection?”
To foundation bolt or not to foundation bolt
When you inspect the foundation of an older apartment building in LA, probably 7 out of 10 times, your foundation inspector is going to tell you that the foundation isn’t bolted and that you should bolt it after you buy it. Should you? To answer the question, you first need to understand how these older … Continue reading “To foundation bolt or not to foundation bolt”
One way to spot un-permitted electric
Have seen this on two buildings recently, so figured I’d share. On modern buildings, all of the electrical meters are grouped together on one big panel, called a “combo” panel. It’s usually in the front of the property near where the electric wire drops from the nearest utility pole to provide power. Back in the … Continue reading “One way to spot un-permitted electric”