Category: Uncategorized

Spent the long weekend in Jackson, WY at the wedding of one of my best friends from highschool. For the sake of this story, let’s call him “H”. H’s a super-successful dude. He started a hedge fund in his late 20s that did amazingly well, then provided all of the capital for my second through … Continue reading “An appreciation”

Being an effective acquirer of real estate involves two contradictory skills: Pattern matching. By this I mean: The ability to rapidly compare a new potential deal to others you have done and identify commonalities with the successful ones. For example: If you show me a picture of a building and a price, I can very … Continue reading “Two contradictory traits make a successful acquirer”

“I’m looking for a 15-20% IRR… can you guys get me that?” No. And not because our projects are incapable of delivering returns like that. Under absolutely optimal conditions (like we’ve had over the past couple of years), we can. But I’m categorically unwilling to quote IRR numbers to anyone. Why? Because doing so requires … Continue reading “What kind of returns do we generate?”

And…. we’re back. Want to talk today about partially renovated buildings. This is a business model we see a lot: Guy buys an older building with low rents He turns over, say, 1/3 of the units and gets market rents for them He markets the building at a very low cap rate (eg a high … Continue reading “Why I hate a partial renovation”

“I know you’re asking $2500 / month. But I really like this apartment and I can only pay $2000. Can we make a deal?” “Sure. You know what? We searched high and low for months to buy this building, risked millions of dollars to buy and renovate it, spent 12 months of our lives on … Continue reading “Why we won’t negotiate asking rents”

Have a small, new project opening up in Silver Lake shortly. We have: Two 1/1s Four 2/1s One 2/1 house The property is easily walkable from Sunset Junction (like, fall out of bed walkable). And the lot is elevated above the street and gated, so the property feels very safe and secure. The units themselves are special… fully … Continue reading “Sneak preview of a new compound in Silver Lake”

Have been doing a bad job of updating the blog – mea culpa. In my defense: We have a lot going on here at Adaptive I’ve grown somewhat weary of seeing people read the blog and then compete with me On the second point: I’ve always known the blog would inspire competition. That’s life in the … Continue reading “An apology and some thoughts on the future”

Right now: There is a ton of demand for apartments in LA; and There is a lot of capital seeking yield This represents an opportunity for entrepreneurs, like Jon and me, to make money by partnering with the capital to provide housing. Like most entrepreneurs in this space, we’re more or less agnostic about whether … Continue reading “The social implications of renovate vs. build”

We just entered lease-up on a new building and the rents are coming in too high. How on earth could I be concerned about rents coming in too high? Isn’t that a good thing for landlords? Sort of, except that it means I’ve been missing out on deals that I could have been doing. When … Continue reading “When the rents are too damn high”

Over the next few days, am going to spend a bunch of time revamping our standard lease. Why would I do this boring job? Aren’t all leases pretty much the same? The answer is, obviously, no way. First, landlord-tenant law changes over time. As new laws are enacted and new court decisions come down, what is … Continue reading “Project: New lease”