We just finished leasing up the front structure at 807 N Madison, our most recently completed renovation project. Leasing the 10 units took us something like 31 days. We began construction in mid September of 2014, so the entire process took approx. 300 days (a little longer than we would like, due to some unanticipated … Continue reading “807 N Madison is leased up”
Category: Income Property Benchmarks
You can’t juke the operating expenses
There’s another broker with whom I’m acquainted who always seems to have amazing deals to show her clients. Every week or so, I see her pitching deals with 8-10% cash on cash returns. Eventually, I started to get curious. After all, this is a tough market. I have every advantage in the world, and it’s not easy for … Continue reading “You can’t juke the operating expenses”
A pretty amazing success story
Yesterday, I got a call from one of the first people for whom I ever brokered a deal. He is in the process of refinancing the mortgage on the small apartment building I helped him buy. He was calling to see if I had any tips for his upcoming appraisal. As I always do before an appraisal, I … Continue reading “A pretty amazing success story”
If I were a broker…
…who didn’t also renovate tons of apartment buildings, I would: Run rent surveys across all relevant neighborhoods, all the time Constantly poll my clients about construction costs for different finish levels and unit sizes Constantly poll my clients about eviction / tenant relocation costs Why would I do all these things? Because, without the above … Continue reading “If I were a broker…”
Taking apart a deal: An East Hollywood Duplex
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”
How Adaptive thinks about valuing apartment buildings
The first time someone asked me to come in to talk to them about listing their property for sale, I was pretty unsure about how to handle the meeting. Of course, I had my own ideas about the value of the property. But I was also concerned about the possibility of losing the assignment by … Continue reading “How Adaptive thinks about valuing apartment buildings”
We’re not charging enough
One of the advantages we have in this business is that our units tend to command top-of-the-market rents. The reason is pretty simple: We spend a ton of time and money making each unit we renovate into the kind of place that we, ourselves, would want to live in. But I’ve been doing a lot … Continue reading “We’re not charging enough”
When a foot isn’t a foot
I’m mostly a price per sq foot buyer. Because I always renovate, I’m not very interested in the income of the building prior to acquisition. I am, however, extremely interests in the structure I am buying, since that structure is the raw material we will work with to produce the eventual product we are selling: … Continue reading “When a foot isn’t a foot”
How following one dumb rule of thumb cost me thousands of dollars
When I first started buying buildings, I needed a quick and dirty way to estimate operating expenses. I hadn’t owned any buildings long enough to have historical data upon which to base assumptions. At the time, I was using an accountant who knew just enough about real estate to be truly dangerous. I asked him … Continue reading “How following one dumb rule of thumb cost me thousands of dollars”
What is a good NOI?
I see what people search on Google that brings them to my blog. This was a question yesterday that I thought begged for an answer. First, let’s review what “NOI” is. It’s “Net Operating Income”, or what’s left over after you take in your rents and pay out all of your expenses, including property taxes, … Continue reading “What is a good NOI?”