All the capital for my second through 12th deals came from one of my best friends from highschool. Once he forced me to start raising money from other people, I remember complaining to him that I hated raising capital. You should have seen the stupefied look on his face, right before he said: “You realize … Continue reading “How I quit worrying and learned to love raising capital”
Category: How to
A surprising admission from Mr. Fund of Funds
Was at a terrible conference early this week, when I heard something amazing. It came from a guy who runs a fund that invests in other managers’ private equity funds… in other words, a “fund-of-funds”. Someone in the audience, presumably an aspiring fund manager, asked Mr. Fund-of-Funds how much of a co-invest he wants to … Continue reading “A surprising admission from Mr. Fund of Funds”
Suddenly, everyone cares about insurance
The wild fires currently raging all over California have me (and some of my investors!) thinking about insurance. In general, the insurance premia Adaptive pays on our buildings can appear high, relative to premia paid by owners. Why? Most owners do the following: Buy an insurance policy when they first buy their building. Then, each … Continue reading “Suddenly, everyone cares about insurance”
A great capital partner
Yesterday, a long-time capital partner and I finalized the operating agreement for the entity for a new deal we’re doing and, because the process unfolded in precisely the way I like to do business, I want to highlight it here: We brought the deal to this partner about a month ago, after we had inspected … Continue reading “A great capital partner”
How we think about apartment design
When you’re designing apartment buildings, you need to resolve the following tension: You want the units to be cool enough to attract tenants today, while making them timeless enough to attract tenants for decades to come. We have settled on what I like to think of as “authentic Socal minimalism”: “Authentic”, because we avoid using … Continue reading “How we think about apartment design”
One bad habit I’m trying to kick
One of the bad habits I’m prone to falling into is failing to grow my network of capital providers. For any given deal, if we’re not deploying a discretionary fund, it’s easiest to reach out to the 3-4 families with whom we do the most business and get one of them to write the check. … Continue reading “One bad habit I’m trying to kick”
Why we’re sticking to our knitting
Regularly get asked the following questions: Are you planning to venture out to other cities? Start doing other product types (office, retail, etc.)? The answer to both is that I would love to branch out. Aside from the intellectual stimulation that comes from learning new things, expanding the pool of potential projects would allow us … Continue reading “Why we’re sticking to our knitting”
Some advice for new graduates
Recently, have found myself giving advice to some recent college graduates beginning their careers in business. Figured I’d share here, since plenty of my readers are in the early stages of their careers and this is the advice I wish someone had given me. As always, my advice is worth what you’re paying for it. … Continue reading “Some advice for new graduates”
The numbers are out of whack
Our business model allows us to generate yields which are consistently 200 basis points in excess of “market”. In other words, if any random ding dong can buy a 4% cap, then we can reliably create a 6% by doing what we do. But, right now, a 6% isn’t that great. Why? Well, interest rates … Continue reading “The numbers are out of whack”
Some thoughts on negotiating
Repositioning an apartment building requires obtaining the consent of a huge number of people and institutions, from tenants to contractors to city inspectors and on and on. This consent doesn’t necessarily have to be enthusiastic. But you still need it, because not getting it can screw up your project massively. So, a big part of … Continue reading “Some thoughts on negotiating”