August 5, 2025 · 54 min
With Mike Seltzer — Multifamily Broker & Investor
The episode in one minute
Can you build a thriving real estate career without a team, a cold-calling center, or flashy marketing? In this episode of No Vacancy, Taylor Avakian sits down with Mike Seltzer, a solo powerhouse…
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Can you build a thriving real estate career without a team, a cold-calling center, or flashy marketing? In this episode of No Vacancy, Taylor Avakian sits down with Mike Seltzer, a solo powerhouse who’s transacted over 1,000 units and $300M+ in multifamily real estate. Mike shares how he went from printing flyers and answering Craigslist ads to becoming a go-to off-market dealmaker in Los Angeles. You’ll learn how Mike: - Developed a niche in 5–30 unit apartment deals - Built deep broker and owner relationships - Analyzes deals with a long-term buy-and-hold lens - Approaches risk, cash flow, and market cycles - Structures partnerships and manages investor trust If you're looking to close smarter, build real trust, and operate lean — this episode delivers Subscribe and Stay Ahead! Stay informed and empowered in the multifamily real estate market. Subscribe to the channel for exclusive insights, rental updates, and expert analyses on the Los Angeles market. 🔔 Don’t miss out on the latest trends and tips to maximize your property's potential: https://www.youtube.com/c/TaylorAvakian 📈 Connect with me: Website: https://www.thegroupcre.com/ Email: taylor@thegroupcre.com X: https://x.com/TAYVAY_ LinkedIn: https://www.linkedin.com/in/tayloravakian/
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How many buildings do you own right now? Myself about 25. I don't take investors. We just kind of run it very like family operation. I didn't even have enough to buy 10% of the building. I still own that 9%. Kept that building. It's kind of like my roots, my starting point. It kind of took me to the next level because I bought them well. The market shot up right afterwards and the values went, you know, went went up a lot
on those.
Stay alive. Yeah, you got to stay
alive. Welcome to the podcast. My name is Taylor Avakian and I'm here with my esteemed guest Mike Seltzer. Mike, thank you for being here. I appreciate it. Thanks for having me. Of course. How many buildings do you own right now? About myself about 25. And what when do you say yourself? Do you have partnerships in some deals? Yes, I do. What's like family or like other friends?
Well, I I have really just three other people I've ever bought buildings with. One is um a guy named Steven Doran who my father and him have a business together that they started in 1971. So, I bought just three buildings with him. And then I have another buddy of mine who sadly just passed away. I own one building with him, but he's a guy I went to kindergarten with. So, I've known him basically my whole life. And then um a guy Ma, everyone knows him from Xenon Investments. Um he's a guy I went to boarding school with. Oh, that's how you guys And that's how I know him.
We were roommates in boarding school actually.
And you both play hockey, too.
Yeah, we both play hockey. Still, which is crazy to me. Still play. But you know, you can't Once an athlete, always an athlete, as I
say. Exactly. But I'm I don't take investors. It's an equal partnership. Yeah. You know, he has some of the buildings he manages. I have some I manage. Um, and we just kind of run it very like, you know, like a family operation.
How did you get in the business?
Well, my father was in the business. My father was a developer back in the 70s and 80s. And uh, he was developing and I always took a liking. I always was interested in it. And in when I was 16 years old in 1986, I spent a summer going to work for my father and he was building 110 units out in Kenoga Park. Wow. On Gresham Gresham off of Dodto. Mhm. And my job was doing waterproofing. I spent an entire summer Oh my gosh. working in the hot valley sun doing waterproofing from 7 in the morning till 4:00 in the afternoon. And it was a good life lesson. It was hard. It was hot. It was smelly. But it was just a good way just to understand how tough and what life is really about at a young age.
Mhm. Um my father's been a big influence on me. Um I grew up I don't want to say privileged, but I grew up you know I grew up in Beverly Hills and uh my father's from Brooklyn. He grew up very poor, but he made it always instilled in me, if you want something, you have to go out and do it yourself. You have to earn it. You know, I'm not going to give you anything. It just doesn't work that way. If not, you it's it's not going to be good for you in the long run. And um I took that, you know, from from an early age. And I saw that and I also saw when we were young how he struggled, you know, he before he got in the building business, he was he sold typewriters and adding machines. Wow. So, it was it was it was tough.
It was a tough and I would watch I saw how he watched his money and uh and it stayed with me. It still stays with me.
Yeah. I'm still like that. Why did he get into the real estate development business opportunity? He saw it. I mean, this was in the 60s and 70s7s
' 80s. He he was working he was doing two jobs. He was always had his sales job, you know, typewriters, adding machines. He worked for a company called Smith Corona. They're no longer around. Okay. And uh he met a guy, an Italian guy, I want to say in the early 60s and they started um he worked for him and they've developed some buildings. In fact, one is on Fairfax just off of Sunset. Still there. Wow. I think he did that in 1964. Does he own it? No. No, he was working for the guy. Oh, so he was just doing like general contractor work or Yeah, the he was working for a general contractor and that's how he started
to learn the business. What was he doing specifically? Um I don't know exactly what he he just he was working with the guy who was doing the development. So he wasn't a part owner.
No, he didn't own any No. He didn't own anything. Okay. In 60 I think this was 1964. So he was 30 years old then. Okay. 2930. So he he had no no ownership. He didn't even know what you know where what direction he was heading in at that
time.
Geez. And then how did it compound to then Seltzer Dorne which is the company that that he founded in 1971 with my dad Sheldon Seltzer and Gerald Doran. They grew up both of them grew up in Brooklyn. They were actually both captains of their basketball teams, high school basketball teams. They were rivals. They maintained a friendship. They both moved out to California and they started this this company in 1971. And it was more Jerry was more the property management side and my father was more the development side. So they'd go out, they'd find land, they'd develop it. Raw land. Yeah. Raw land in the valley.
Okay.
You know, cheaper at the time. Yeah. And uh some stuff they sold and they tried to keep as much as they could and they would then when they were done with the project they would finance it or refinance it and a lot of times over finance it to raise money for their next project. Got it. And it was like a cycle and it just kept spinning and
spinning. So they and and these were all their own products or were they doing GC work and stuff? They were just building for themselves.
Wow. Geez.
And I'm sure at the 70s in that time like that's when LA I mean I I've of all the historic family offices in Los Angeles a lot of them bought and built properties 70s 80s 90s. Exactly. LA wasn't LA as it is today.
Right. No. Like it was not it was a lot easier. It was more simple. I mean my as my dad says you know he built boxes.
Yeah.
you know, it's a lot more complicated now, you know, but he's kept he had a tough time in the early 90s, but he's, you know, still owns these buildings and he kept a lot of town homes. Got it. And he's kept them and he's just rent them out, though. Yeah.
Okay. And then how what was your transition to then get into the business yourself?
Well, I was so in ' 86 I was 16. Then I went away My last years of high school, I went to boarding school. I came back. I went to USC for college. Um, I uh studied real estate, real estate finance. Um, in college, I always had a liking. I always had a feeling that's was something I was going to do because when I was young, I'd go to a lot of the job sites with my father and I was watching him build and I always took a liking to it and I always always wanted to build, right? But when I graduated college, it was 93 and I went to work for my father at that time when things were terrible. Mhm. You know, we uh at that point we had probably 120 to 150 vacancies.
Jeez. And about 50 to 60 UDs a month. It was it was really tough. Goodness. Money was tight. And it was a good time to get into the business. And you couldn't rent stuff. It was just very challenging. And uh it was a good time to learn. And I worked for my dad for about five years. just working on the property management side. And then I just one day I just told my father I was like, you know, I don't want to work for you my whole life. I I I can't do that. I want to do my own thing. I left my father and I got a job as a mortgage
broker.
Oh, I didn't know that. Yeah. So, I think this was around 19 97.
I was around 27.
Okay. I was one. Let's see. Let's see. 93. Yeah. Around 97 98. And I went and worked for a guy. I did single family residence. I worked for him for about a year. I got fired. Then I worked for another company. They did multifamily financing. Worked for them for about a year. I got fired. Then I started an internet company with a friend of mine who I actually own own a building with today. Yeah. And we started doing uh encoding. It was we were encoding video at the time doing live stream.
What?
How did you get had a company called Digital Farmhouse this was back in 19 we started in
1998 which is like right around the dot. Were you seeing what was happening in the.com and you're like these companies are getting you know huge valuations. Exactly.
With just starting the idea. So we started this internet company and we we had accounts. Our biggest account was probably Playboy. We'd go to all the Playboy parties live streams. It was actually pretty cool. And I was looking at the numbers. The numbers showed that not that many people were were really watching it, right? It just didn't it did didn't make sense to me. Yeah. And whatever money I was making doing that, I was saving it. And I was like, I want to buy apartment buildings. All the people in that industry was telling me, "Why don't you buy internet stocks? We're making 10% a a month. You're going to make 10% a year." They basically told me I was an idiot. Yeah. I was like, "Yeah, but I just feel comfortable." Happened to still own those buildings I bought back then today. But
there we go.
I uh I started buying buildings and then I just transitioned
from the internet business to buying buildings and managing it and just snowballing. But the first building I bought I bought in 1997. I bought a building on Kelton in Westwood. I bought it with Ma the Xenon guy. And all all the money I had to my name was $33,500 was only enough to buy 9%. And I didn't even have enough to buy 10% of the building. I still own that 9%. Wow. I kept that building. It's kind of like my my roots, my starting
point. Token, the first
one. Yeah, my first one.
And it took some time. Were Were you guys making good money in the the internet business?
Um, decent money. Okay. But I knew it was it was going to be shortlived.
I knew it wasn't going to be sustainable. Got it. You kind of saw the writing on the wall of what was happening.
Yeah.
Quickly. And so was your philosophy or what you thought at the time I was going to get the money from the business, buy these buildings, and then and do what a lot of people do, which is then refinance and go use that money to buy more. Like was that your philosophy then?
Yes. To get the rents up, buy buildings, get tenants out, buy tenants out. It was a lot easier back then. Yeah. Get the rents up, go refinance it, over finance it, take that cash taxfree, and go buy other
properties. And how much were you able to pull out on the refinances? because now it's like you're lucky if you get 65%.
Were you getting 100% 110%. No, but I'm saying, you know, you were also leveraging more. Okay. So, you know, if I bought a building, I'm trying to I don't remember the exact numbers, but I remember buying a building um I want to say in Shannondoa, I still own that building today. It was nine units. I think we bought it for about a million dollars and we put a loan on it of maybe it was like an $800,000
loans.
20% down. Yeah, something like that. Maybe maybe 700,000. A few years later, we refinanced and got all our money back. Maybe a couple extra hundred grand. But still, that helps to go leverage into the next deal. Got it. In the beginning, it was very slow. It wasn't like I was buying a building every month. Yeah. you know, I bought I bought a building in 97, then I bought a building in 99, then I bought a building in 2001. So, it took time in the in the beginning and then I just then it just started to roll a little bit. I was also not spending my money. I was living very modestly. Um, I was just saving every dollar I had because I knew every dollar I spent would be a dollar less that I could spend buying a building.
Was there an income that you had when you switched from um the internet business to doing the real estate stuff full-time or did you have other jobs in between there too?
I didn't really have any set job. Uhhuh. So, it was it was it was difficult. It was because managing the buildings was taking a lot of time. You were self-managing them?
Yeah, I was self-managing it. Do you still self-manage them?
I have a management company now. Okay. But back then I was pretty much doing everything. Wow. Right.
I didn't I didn't h I didn't have the money to hire anyone at the time. So, you were taking the phone calls at at 2:00 in the morning for the toilets and doing the leases and you were showing the units. Showing the units.
Oh my goodness. Yep.
Showed a lot of units. That's so interesting because it feels like to me in today's market it's the buildings are very expensive. To buy a million- dollar building, you basically need like 300 grand if not more to if you're going to renovate it too. Just for the down payment, you need at least 30 40% 400 grand. Like that's a lot of money in today's market.
And it's hard to get that money now. Yeah.
Money's tight. Do you think people can build wealth or build portfolios like they did back then? Is it is it different environment?
I think it's a different environment. I just think, you know, I don't want to say it's reminding me of the early 90s, but it's like it's just a time you just got to kind of hold on, buckle your seat belt and ride it out. You know, things have to change. The insurance has to, you know, loosen up a little bit, right? Rates, you know, I don't think they're going to come down so quickly, but, you know, rates need to come down. You know, I stopped buying. I I did buy some buildings the last few years, but I kind of stopped buying because I wasn't convinced on where the rates were. thought the rates could only go up, right? And and the GRM were too high. The price nothing was making sense in my own little world and it kind of stopped me from from buying.
Now I look back and I was totally right. But it was more just a feeling and a guess.
What What do you look for when you're acquiring a deal? Like what are the met metrics or numbers that you feel comfortable where you're like, "Okay, I I want to buy this
deal." Well, I I like to see location, right? the condition of the property, right? I'd really like to see the the tenants, you know, the type of tenants, you know, if you can potentially get somebody to move, which is almost impossible now. Just I just look for like a silver lining somewhere where I think I could reposition the property to get the rents up, then go and refinance it and just pull my money out. The trick is to just turn your money over.
Got it. Try to try to whatever you can do to add value to then pull as much money out as fast as
possible. Exactly. So, so you're in the building for none of your own money and yet you're making money on the
building.
Got it. Right. That's the trick. But my philosophy has also changed where I started making money and the interest rates were going so high I started paying off debt. So, I've kind of taken a different approach lately.
Interesting. What's the current LTV on the portfolio? You know, I don't know, but it's pretty low.
Yeah.
So, you've paid off a lot of your debt.
Yeah. And have decided not to debt, but I paid off some good. Yeah.
Just not not financing right now. You're doing you're you're going for cash flow at this
moment. Yeah. Cash flow. I just want I want to sleep at night. I want to be conservative. Yeah. You know, I just have a totally different approach because my confidence now is is not Yeah. It's just not there in the market. It doesn't feel like you can execute a business plan that historically has worked for you and that's what you know. Yeah. But my business plan now I don't I mean it's just not there. My business plan is telling me not to do anything right now and just wait it out. But now I'm in my mid50s so it's you know I'm coming to the kind of I don't want to say the end of my career but
you know I'm on the other side of it. I mean you got 25 buildings right? That's a that's a pretty good income stream that's coming every month. It's not it's not like you have to buy another building. I guess for depreciation or taxes if you wanted to do something like that that I guess that's the only reason that people continue to buy is because they they want the tax shelter when it comes from depreciation, right?
But then the depreciation runs out and say say I bought a building for a million dollars, right, years ago.
Yeah.
And it's worth $4 million now. Well, if I sell that building, right, and go buy a building for the four million, the the I have to recapture the depreciation, but the property tax is going to be based on 4 million. So, the low property tax is not so
bad. So, Prop 13 really is a huge benefit for long-term owners. Good. You think about that. I mean, it makes sense. And and it is it's the building is worth more to someone who's owned it longer in California because of Prop 13, right? It's the benefit of of I think one of the main benefits of buying in California is that savings and property taxes the longer you own it. It just it compounds the effect of it over
time. It does. I just feel like now it's I don't even know how to advise someone what to do right now.
It's hard.
Yeah.
I mean, you have a lot of friends who are still active and doing things. Like what are they saying? What what do you talk to them about?
Well, like for example, um the Xenon guys, they're really not doing much right now. They're not buying really. No, no, but we have a lot. We also have, you know, all these loans are starting to reset. You know, I'm talking to the banks. I'm doing some refinancing. I'm actually because I was low leverage. I'm going to get some cash out. I'm going to take it. Yeah. But I also have another building actually in Beverly Hills where I was talking to Bank of America and they're telling me I got to come up with a million bucks.
What? Really?
That's crazy. But then I But I'll probably go go to Chase. They'll probably give me a better debt coverage ratio, underwrite it. But, you know, you do that a bunch of times. You got to be careful. Yeah. So, you can't really go out and spend.
Yeah. You don't want to be overlevered and get all your refinancing in line if you can. What's the best deal that you've ever done?
The best deal I ever done was I bought these three buildings in Beverly Hills. Two were on Crescent, one was on Oakurst. I bought them with I partnered with the Xenon guys and we we actually I know the date I bought them 1111. Wow. And that was that was like the turning point of my career.
I was already 41 at the time.
Uhhuh.
What do you mean turning point?
It kind of took me to the next level because I bought them well. The market shot up right afterwards and the values went, you know, went went up a lot on those buildings.
Do you remember what you bought them for?
Yeah, I actually do.
27,900,000. 27,900,000 for 97 units. And Wow.
Okay.
And so what do you think those are worth today?
I think they've come down in value, but I mean at the time, what was that like 260 something a unit? You could do the math. So what what is stuff what is stuff selling for in Beverly Hills? Ones and twos or studios? No, no, no. Ones and twos.
I mean, let's say it's conservatively
500,000. I would say more, but yeah.
Yeah. Conser conservatively. Yeah. So, it's worth at least 50 to 50 to $70 million. I mean, and they're adjacent
partials. Two two are
adjacent right next right next door to each other. Yeah. Which creates a huge lot. 50 to 70 million. Someone else to come in and knock them down and build them. You know, hopefully, you know, the zoning could change. And that was in 2011. That was 2011.
That's crazy to think it was only that, you know, 14 years ago that opportunity is there because basically what the the crazy thing about real estate is you didn't put $27 million to buy these buildings. You put in 20%. So you guys put in 4 million
bucks. We put in Shoot I forgot what we
put in.
6 million bucks, something like that. Yeah, it was either 4 million each, maybe 4
million.
Okay.
So, so that that's what's crazy about real estate. So, let's say you're 4 million each. So, at 27, you're 8 million total. Let's say it's doubled. So, your four turns into eight. And if it's if it's tripled, then that four turns into 12, right?
And you're using other people's money. Well, and we refinanced it.
I think about 5 years later, pretty much got all our money out. All your money out. And so, now you're no money in.
Yeah. And so, it's just cash flowing in that way. Yes. But now the loans are due. We're doing them now, but the interest rate went from three and a half to percent to, you know, just over five and a half percent.
Yeah.
Which, you know, which is a crusher. And the insurance is going crazy. And rents are coming down. Yeah. It's, you know, it's it's it reminds me of the '9s all over
again. Well, but hopefully that what happened after the '90s happens as well. It's Los Angeles, right? Do you think that LA is forever changed or do you think that we have
a path to be No, it'll it'll change and and things will things will start to change.
Do you think it's going to come back? Yeah. What makes you say that?
Because it's getting to the point where it's going to have to change. Things are getting so tough and difficult that it's going to something's going to break and and they have to they have to they have to help the landlords. I mean, everyone thinks the landlords gets a $3,000 rent, it goes right in their pocket. Everyone forgets a landlord. We employ I don't want to use the word the little guy, but the gardeners, the poolmen, the electricians, the plumbers, the real working, hardworking class people that make us.
Yeah.
Right. Yeah. We pay them with the money we take in from rents. We just don't keep all that money. Yeah. Right. We pay the banks. Then you have the escro companies, you have the retro. It's like a circle kind of starts with the landlord. and you take your take away from the landlord, then what?
We're not going to have the money to pay anybody. Yeah. So, let's say like on a $3,000 a month rent, right? You got, let's say, 35% expenses, so you're at a,000 bucks there. Then you got your overhead and other expenses that come there. So, maybe it's another,000 bucks. So, on that 3,000, maybe you're getting a,000 bucks. And then there's bank debt that's got to come with that, too.
So, it's not like you're walking away. Yeah. Yeah.
You make 300 bucks.
Yeah.
Couple hundred bucks, right? So, it's not it's not this uh money printing machine people think it is. When when it comes to the expenses and when your interest rate goes up, I mean, that completely wipes away a lot of profits for a lot of people. Insurance goes up, you can't raise the rents to keep up with it. It just becomes very difficult. Which brings me to a question for you is like what is the most difficult part about being an apartment owner?
It's like the the I want to say in the management side it's like it's funny because I joke about this like we get blamed for everything, right? Like I'm I make a comment like oh the the the couple in two or two are getting divorced. We're going to get their attorney bills. Yeah. Because it's our fault they're getting divorced.
I'm being you know facious but yeah I get it.
But I feel like, you know, the landlord has that reputation of the deep pockets all the time, you know. Oh, the landlord will take care of it. There's a problem. The landlord will take care of it. And it it is what it is. I'm used to it, right? I've been doing this a long time. You know, you have to have thick skin. You have to, you know, kind of just be calm about it. Yeah. And uh and just, you know, every day is, you know, a little different. You just move on.
What is uh we talked about the best investment. What's the worst investment?
I bought one building. It was the last building I bought. It was on uh Sherborn. I don't even want to say it's a bad investment. It's just actually I probably still would have bought it.
I just overpaid a little bit for it. Why? Why do you think?
Because the location. Yeah, I like the location. It was available. I was going after it. I happened to own the building right down the street. M. So, it made sense. I mean, in the long run, I'm I would still have bought it, but you're asking me what the worst
Yeah. Yeah.
Yeah. You know, deal I think it was that one.
How do you think about location when it comes to investing? Cuz your your properties are in pretty prime locations. I would say, you know, B plus A locations. Like, is that a big process for you? Because the valley is obviously different. you know, your father and and the family owns properties in the valley, but I would say that's a different tier than where a lot of your buildings are. So, how do you think about location when it comes to investing?
I mean, you know, I like the better locations. You know, I always say like, you know, when I take my kids there at night, you know, yeah, if I'm not going to go there at night, I probably don't want to buy it. Um, but, you know, I have some areas of h Hollywood changed a lot.
Um, how so?
I think it got, you know, I think the entertainment business has screwed things up. They've taken away from the entertainment business. You know, I have people people tenants are are are moving or tenants are asking for rent concessions because they don't they're not working. They're not they're having a tough time finding jobs. And I think the right now I'm not getting a lot of activity on vacancies. It's very difficult right now. Interesting. It's stale. It's very stale.
Go go go go go deeper into that. What?
Give me examples. Like if I have a unit and it's vacant, first of all, I'll lower the rent, but I'm not getting the foot traffic right now. So, it's hard to get the foot traffic.
Interesting. So, you're not getting inquiries about wanting to lease these units. No, it's very slow. What is the Give me Let's Let's dive into that a little bit. So, like onebedrooms in Hollywood in Hollywood, right?
Okay. I was getting say 24 for it. Right now I'm at 1,900 really. Right. And giving specials and I'm having a tough time. But you know that could be this month and then next month it could pick up again. And this is the time of year cuz you know we're in May. Yeah. Today's May 9th where you know people give their notice, people moving, school's ending. Yeah. Right.
And then it'll start to pick up again. But that 500 bucks is a lot. It's a lot. Is it is it are those renovated units like are they brand new flooring, kitchens?
Yeah. Well, this one is renovated, but not with a washerd dryer, but it's it is
upgraded. So, that's super. I mean, that's that is not that's, you know, 20%. That's that's no small joke when it comes to and and are other owners that you know feeling that too. Yeah, because everyone thought with the fires that leasing would just be, you know,
incredible. I think I think it did for a little bit, but you know, the fires, you know, you have people coming from these, you know, nice, beautiful homes. You know, I have a very modest apartment in Hollywood. you know, they're not they have a family. They're not going to go to onebedroom, you know, in deep Hollywood. Yeah. You know, this palisades in a house.
What do you what have you found to be the most attractive amenities andor um conditions for tenants right now? Like what do what do tenants actually care about when they come to you? What what units lease up the best versus the ones that are slower?
I think they really want washer dryers. They want, you know, hardwood floors. They want a new kitchen, new bathroom, and I think they're very price conscious, you know. They want they want to lower rent right now, so they'll probably give up some of those amenities. Interesting. You know, they want to make things easier for themselves, you know. Yeah. They don't want to go to the communal laundry room anymore, you know, at the building. They just don't. Those I have in my buildings because I have a lot of buildings in the 60s, but those are for my older tenants that are, you know, rent control and the rents are still very low.
Yeah.
Yeah. So, they're so happy, you know, with that low rent that, you know, they're not going to complain. Totally. If you have someone coming in paying a market rent, you know, they want it inside their unit.
I don't blame them.
Yeah.
I mean, what is the typical cost of a a renovation that you guys do?
It I mean, I guess Beverly Hills would be different than in Hollywood, but you know, it could be
Give me Give me each.
I would say could be 30 to 35 like say in Hollywood
or 45 in Beverly Hills. Okay.
And that's but that's washer dryer, plumbing, electrical, lighting, new kitchen, new bathroom, like a full gut
everything.
Got it.
Everything. So you're looking rip it apart. Yeah. You're going for market, you're going top of the market rate.
Yeah. And you have to pull permits. Yeah. Inspections and do you certain be licensed people?
Well, it's What's the timeline for what turning a unit? How long does it take typically?
I mean, you know, it depends if they show up every day fast. Yeah. But I mean, it probably takes 6 weeks to man
10 weeks, right? And that's in that time period, your rents are, you know, not occupied, right? So, your unit's down. So, you're not getting the rent from the unit over that time period. Exactly.
Yeah. Geez.
And that all compounds, especially when expenses keep going up. Utilities are trash just increased 30%.
Oh yeah, trash is ridiculous. Yeah, trash is something that people people are not super fond of. No. And then now that they have the what is it like the I forgot what it is like the organics.
Oh yeah. Uses that. That's like an extra
fee for nothing. How um how do you structure family assets to like pass them down to your kids? Is there special entities or how do you structure cuz you're you're you have a family office that was passed down some properties. You want to obviously pass down to your kids like are there anything that smart wealthy people do to structure entities and properties?
Well, I mean I have a you know I did a you know obviously a will and a trust. So in my trust I have everything kind of set up. Yeah. Probably need to re It's been about seven eight years so I got to go
revisit it again. Do you think about that? Do you think about the next generation?
Oh, yeah. I think about my kids. I I worry because I mean, how are they ever going to buy a house or how are they going to do it? Yeah. I worry about the the the young adults today, kids graduating college now. It's hard.
It's hard. If you were them, if you had to start over, what would you do?
I don't know. I've thought about that. I don't know where I would start right now.
Would you get into real estate? Would you do something else?
Well, I only know real estate, so it's, you know, Yeah,
I would probably say real estate. Would you go raise funds? Would you go do syndication? I mean, it's syndication's been super hot.
Yeah, I think I would try and do that. Yeah.
You know, at an early age, raise money from Yeah. family, friends, outside investors,
but then you want you raise money. You're young. You want someone with a track record. I mean, someone who's never really bought anything to raise money. Yeah. It's, you know, I've had friends that have always said, "Oh, I want to I just don't want to I don't want to take anyone's money. I don't want to take investors." Not that I don't want to, but if the market is not doing well and I'm out of town or on my vacation, I don't want to get the call. Things are so bad.
Why are you out of town? Why aren't you, you know, at the office dealing with everything?
I I don't want to hate to sound this way.
I don't want to have to answer to anybody.
Yeah.
Well, I mean, that's the way you set you set yourself up to be able to right run a business like that. And it it's it's something that I think about a lot, too, because, you know, I'd be I'd be silly not to own real estate and the tax benefits that I get from being a full-time real estate employee, right? The government gives me the benefit of depreciation on my ordinary income. So, like it I I get savings from buying a building versus someone who's a W2. So, I want to buy and am thinking about continuing to buy assets. And so, I question, it's like, okay, do I get to the point where I have enough cash where I just start buying these buildings myself or do I go out and raise money, where I have less ownership, but I have partners in it and there's
more responsibility where it's not all on my own, right? It's a it's a difficult situation that I have to think
about. You just got to look at the numbers. But, you know, I always say, you know, part of something great is better than all of nothing. So, if you have to do it that way, there's nothing wrong with
that.
Yeah.
If if it's a if the deal's good enough, you figure out a way how to get it done. Exactly. What do the best real estate operators and owners who you know, family, friends, people who you're acquainted with, what do they do differently that maybe some of the the people who are not as as great as they are?
I guess probably more their infrastructure and their, you know, just their employees. Employees are so important. You know, you have a you have good employees, you're going to have a good business.
It's like everything else. What do you mean by infrastructure? Can you can you go deeper into that?
The way they have the way they're set up, the way they operate, you know, your vendors, you know, I mean, it's it's like it's either your maintenance techs, just your little guys are so important. Yeah. You know, it's like if I have a problem at my house, I send one of my my maintenance texts, you know, and he's doing something for me, I'll be like, you know, here, come on in, sit down, and I'll give him a cup of coffee. I'll feed him. I'll talk to him for 30 minutes. Yeah. Treat them like family. Yeah. Cuz those guys are important. Those guys, they work their ass off. Yeah. Right. They deserve the respect, you know? They deserve to be treated properly and not looked down on or not be like, "Oh, he's the work."
I don't I don't do that. Did you ever make a mistake like with the way that you hired someone or structured it? Like how would you structure it? The reason I'm asking this is in detail is like, okay, if I want to build a big I want to have 25 properties, right? There's a lot of people that need to be in that. I can't just do it myself. I got to have tech. I got to have vendors. I got to get the best idea, the cheapest flooring. I got to, you know, be competitive on my pricing. I got my management's got to be tight. Good.
Right. I made mistakes tons. Tons.
Tons. Like what?
I mean, I've had bad air conditioning companies, bad plumbers. I mean, I've had Yeah, I've, you know, I've had my fair share of problems all the time. Bad techs, you know, employee stealing. I mean, we all go through
that. How do you vet a good vendor?
Well, now I have my maintenance supervisor. He's the one that goes out and finds him. But, you know, like he just found someone. We hired him and it's been about six weeks and he told me yesterday that he was going to let him go. It's just not working. I said, "Okay." Yeah.
You know, it happens.
It's hard to find talent. It's hard to find talent. And when you do, you you try and keep them. Mhm. You know, and you and you pay them.
You got to pay them well. What's the biggest mi misconception when it comes to buying, renovating, and and fixing up a property? Like what do people think it's like versus what it's actually like?
People think probably people thinks, "Oh, it's just easy. I'm going to go buy a building. I'm going to go and fix it up. It's just it's not that like everything else. It's just not that easy. It takes you know it takes a team. It takes you know experience, you know, takes some knowledge and you know, but in the beginning you know I was just doing it. I had no idea what I was doing you know I was just going for it and it just happened to work out. I was also, you know, I really started buying in ' 05. The market was just you couldn't miss. Anything you bought did great. Mhm. Now you just have to be careful or don't buy anything. I'm just trying to save money within the company. Try and cut costs, you know, renovate units if I have to. Try try and get rents up.
Yeah. Or just keep them stable, right? Keep your tenants happy.
You know what how many people do you have on the team right now?
or my office. I have a my office isn't very big. I have a just four people in the office. Okay. But then I have, you know, a bunch of maintenance tax. Then I have all my vendors and, you know, I I sub them in instead of carrying them on my payroll. Got it. Like I'll bring one of my guys to do my renovations and he'll come in with five or six guys. Got it. Which is better for me. Then I'll have to worry about I pay him then he handles his crew and I'll have, you know, three or four crews like that.
Got it.
working. I got my, you know, my gardeners. I have my electricians. I have my plumbers. So, I like to kind of farm it out in a sense. Got it. I don't I don't want to I don't need any money. I I want to keep less on my books as
possible. Are you running the Legacy Family portfolio, too? Are you in charge of those buildings?
You know, I just, when I say just started, beginning of this year, actually at maybe the end of December, I just started to step in and get more involved in my dad's stuff. I mean, my dad's 90. Um, his business partner is going to be actually 91 in a couple days, and he I don't want my dad doing it. Yeah. He can't do it, you know? So, I feel like right now I kind of have two jobs and it's and eventually I'm going to try and, you know, combine them to management company. Yeah, of course. But right now I'm, you know, keeping them separate. Okay.
And it's just it's a lot. Yeah. How many buildings or units are in that portfolio? I would say about a thousand. Okay. So then yours is a a thousand
too. No, less. Mine is I don't even know
exactly but but but less than that.
Okay. 500 or so or 300. Yeah.
No more than three but less than five.
Okay. And then the thousand from which is a lot of them in the valley. They're mostly except for about a hundred units.
They're all in the valley.
Got it. Okay. And that's a totally different market there. And they were all most of them were were really built by my father. Wow. Back mostly in the 80s. But so they're non- rent controlled. Well, you know, someone brought that up to me.
Isn't it rent isn't rent control changed now? Well, yes, but if anything built in the city of LA after 1978 is is statewide rent controlled versus city of LA, which is a stricter rent
control, right?
Isn't what 5% plus plus CPI at this point?
That's right. So, what is rent control? Yeah. I mean, the whole state of California is rent control except buildings that have been built after
78. No. Um, California is the last 15 years.
It's a rolling timeline, right? So, a if it's if it's within 15 years, you can raise the rent when you want. Yeah. Right. So, they're they're they're gravitating towards rent control. Yeah. I wouldn't be surprised if they put a cap on everything. They're trying to protect the tenants. I get it. Yeah. The landlords, we had a great run. Yeah. You know, a great run.
Party's over. It's it's frustrating when you think about it because uh to find alpha to find edge or or even like you didn't not to discredit what was done previously but like you didn't have to be a genius to make money in real estate
at all. Yeah. Like I said in ' 05 or whatever you whatever you bought
did great for the most part. Yeah. You know just buy it. And now it feels like you have to have a PhD to figure out how to make a deal work. It's like hard to make the numbers work. But also, the sellers and the buyers aren't really matching up. Right. You know, this the values really have come down and the sellers don't want, you know, but that's always it's always kind of been like that.
What what uh what do the numbers have to be right now for a deal to pencil for you? Like what are you looking at? a cap rate, JRM, price per unit, price per square
foot. You know, I kind of look at the overall picture, but cap rates one number I really don't look at because you can give me a building and I could show you five different cap rates on it. Depends who's running it. Look at these numbers. I was like, "Okay, there's no management fee. There's no, you know, if it's an LA building, there's no skeper. There's, you know, they're leaving all this out." Now, I say I make a joke. I'm like, now you have to put in a accounting uh for uh for legal cuz it's like, you know, every every building you got a legal
problem in.
Yeah. Yeah. You know, it's harder for sure. You know, capital improvements. These buildings are getting older. You know, they're going to need some upgrades, you know, especially electrical. I'm trying I'm starting to do a lot of electrical upgrades, but
that's what's it what's it cost for right now for you? because you got to replace the external panel and then the internal panels. What's this? Re and then then you should really rewire inside the units which is what's that something like that cost?
You've recently done any of those. I'm in the middle of one. I just forgot the exact pricing because I started it I want to say two years ago and I'm still not finished. Oh my gosh. The whole whole mess. But I'm going to be finished with it. I could probably I just don't want to guess because I'm not exactly sure.
We've I've been quoted um you know outside panels let's say for an 8-unit building maybe it's you know 20 grand and then each individual panel is about a thousand bucks in
the internal panels.
Yeah. Something like that.
Yeah.
You know in that range which is that's expensive. That's a that's a big chunk if your building's making you know netting 30 grand and you just all that at the end of the year for an 8 unit.
Like you're not making any money for a couple years. No. And you got a building you know if someone's paying low rent $1,000 their rent control. I mean, you know, you're not going to Yeah. You know, you're not going to get that back.
Crushed there.
Yeah.
It's so It's It's very frustrating. And when the city was proposing to make every unit electric, right? Or require air conditioning units in every unit. It's like, that's crazy. How does that even make sense?
Well, yeah. I mean, if these buildings don't have the power for it, I mean, you got to upgrade the power
now.
Yeah. You got to spend 100 grand to make your unit, right?
To get fixing unit.
I mean, I understand why and I get it, but then help us here. Yeah.
You know, there should be incentives, some tax credits, something.
It's not like we don't want to do it. We want to make the units better.
We want to make the tenants happy.
It's just the numbers don't work, right? Or the buildings are so old and they just can't handle
it.
Yeah. Goodness gracious.
What um So then what's next for you? What is um you know, looking if you had to look 10 10 years in the future, Mike Seltzer 61, right? No, I'll be I'm 55, so I'll be 65. 65. Okay. What What do you want the What do you want your life to look like? What do you want the portfolio to look like?
I would like I would like to continue, you know, adding to the portfolio probably for another 10 years or so. Okay. But only if it's there. If it's not, then I don't mind paying off debt and and just, you know, taking a deep breath and kind of holding on to what I have, enjoying life a little bit. Yeah, definitely. I definitely do enjoy life and I definitely do work hard, but with the phones and the way technology is now, it's so much easier to, you know, to be anywhere and you could be working. Mhm. You know, you don't have to be at your desk like you did in the 80s or 90s.
It's it's completely different. Do you find yourself pretty stress free or do you have some stresses in your life?
No, I have some stresses in my life.
How do you relieve those stresses? Like what what ways have you found to make your life a little bit smoother?
Um well, you know, I get out, you know, I like to exercise. I like to get my, you know, take walks. Just get my mind off of things for a little bit, you know, and it's there. I know it's there. I just have to, you know, handle it. I'm much better now as I got older and handling it, right? I'm also in a better financial position than I was obviously when I was just starting out, but you know, there's always going to be a problem. There's always going to be something. You just have to can't let it affect you too much. Mhm. You know, keep moving forward.
You got to keep moving forward. It's important. It's um it's something that I think a lot of young people there's a lot of external pressures and and seeing um how difficult it is to to survive right in this market and build things for yourself. That's why there's a lot more renters. It's just it's hard to build a legacy right now because everything is very expensive and saving is
difficult. So even if you have a great job and you're making great money, how you how you going to buy a house? Yeah. You know, I mean what are houses costing? They're expensive. Everything's expensive. And the upkeep on it and the property tax and then the insurance if you can even get it right now. Yeah. You know, it's it's hard. 100%. It's hard. I mean, I wouldn't That's why if I were to start now, I wouldn't even know where to start. You know, I definitely got to say I got lucky timing. I mean, it wasn't like I did anything extraordinary. I just had the balls to do it. Yeah. You know, in the beginning, I wasn't making anything for years.
It was hard. What advice would you give someone who's early mid20s who wants to make something for themselves, wants to be a property owner or wants to have a live a good life? Like what what advice do you give people when they come to you?
I mean, I guess I would say, you know, go work for a good company. If you want to do brokerage, do brokerage, mortgage broker, do that. Work for a bank. Just something to just follow the market and learn the market, you know? And the market's something you kind of, you know, have to just I I always had a feel for the market. That's how come how I learned it. And uh you knew what I get dealwise. Yeah. I just knew in my gut. I just knew. Yeah. You know, and she sent me the numbers. I took a quick look. I was like, I want that. Right. Or I look at it and be like, I don't want that. That comes from experience. Yeah.
I said that comes from experience.
Yeah. Seeing seeing running it, knowing what. But I would go look at deals all. It was like a hobby. I'd go look at every building, drive every building, look at all the numbers, you know, especially in the beginning. I would just do it, do it, do it. And then I started to understand the the Westside market and and when I started buying, I was just, you know, I almost closed my eyes and said, "Okay, I'm going to do it." And I would do it. In the beginning, it would, you know, wasn't doing well. And then rents started going up. The market was going up.
could have went the other way, you would have lost everything. Yeah. What um you've probably worked with a lot of brokers over the years. What makes a really good broker? What differentiates good brokers from?
Just honesty.
Long as they're honest. What do you mean by that?
Well, I could you know what it is that the more experienced brokers, the ones the seasons brokers, they just tell the way it is, right? The younger ones think they try and tell you what you think you want to hear. Just give us the numbers. Right? I This is what I used to say a long time ago. A broker can call me up and be like, "I have a building for you. I'm going to give you the numbers. It's terrible. I would never buy it, but here's the numbers. I'll look at it. I'll decide if I'm going to buy it." Yeah. Right. Yeah. And it could be the flip side where this is the best deal ever. I've never seen anything like it. So, we're getting so much activity on it, blah blah blah. I look at the numbers and I'm like, I'm not going near this. Yeah.
So, it's more like, present the deal, let me look at it and I'll know. And I'm not putting them down in any way, but the numbers don't lie. Mhm.
You know, the numbers are the numbers. Do you get How do you find deals? Do Do you Because the brokers they do have to call you or do you check your email? My email like do you see every deal that comes across your email?
I I really make a conscious effort to try and see every deal that comes across my email and I'll look real quick and I'll know I'll know it. Like I'll you know I'll just
know what's the best email if someone wants cuz cuz nowadays we got all these fancy emails, templates, all this stuff. Like what is the information that you want to see to make a decision if you want to dig into this further? Like what is should that what should be in that email?
Just really one page. Uhhuh. Right. like a setup. Yep. Right. A rent roll and some pictures.
That simple.
That's what you want to see. Yeah. That's what I want to see. And then from that, if I want if I like it, then I'll ask for more. I'll have I'll call and ask questions.
And what's that subject line got to be to get you to click to open up? It just could say, you know, new listing or And you'll you'll you'll do it.
Okay. I see a name I recognize. Okay.
You know, it's that recognition.
Yeah.
because it's, you know, it's funny. I I we track all the the metrics and stuff and people uh they're they don't open emails like they used to. And I get it cuz you're getting a million and one emails, but it's like I can't call every owner and tell them about a good deal. Like I really can't.
The only way that I can reach people efficiently is through the emails. And you don't want me texting you deals and stuff like that. Like that you already get
I like text. I don't mind text. You like a text? Yeah. Me personally, I'm really good with text. Emails. is I could get flooded with them and so they miss them and then you know I'll have a broker will email me something and then some junior broker will call me up and I'll be like well I already got it from the listing you know I don't you know and I'm very you know careful I don't you know
you know how does that work let's say that okay I have a scenario for you so you I send you a deal a week ago right you see it it's not on the market a week goes by you're interested but maybe you didn't maybe you didn't have enough time. You didn't see your email. A week goes by, it gets listed with another agent, right? He sends it to you. Are you going through that agent or are you going through the person who sent it to you first?
I like to go with whoever sent it to me first. Okay. Okay. Yeah. I like to be very My reputation is so important. Yeah. Right. I don't ever want to screw anyone over, right? I just because you guys all talk, right? And you'll know. Yeah. You know, and in the long run, I'll get more respect and be like, well, you know, Seltzer wouldn't do it because someone else gave it to him first. But if that ever happened with the guy Yeah. You know, later down the road, I'm going to do the same thing. He knows he respects that. Yeah. But, you know, a lot of times brokers will send me stuff that that aren't theirs. And I'll be like, "Is this your listing?" They're like, "No." I'll be like, "Whose listing is it?" You know, typically they'll tell me, "Yeah, I'll put it in.
I'll be like, "So and so send it to me on so and so date.
I have the email."
Got it. So I I can't do that. Yeah. Well, he's not the one calling you. He's not the But it's Yeah. You know, him emailing me and him having a relationship with me doesn't have to call me. Yeah. Totally. So, I just want to do things right. I don't want I don't want to screw anyone up.
It's not my thing. No. People People appreciate when uh when owners I I appreciate when owners stand by their word and they're the type of person who I know I can trust and who's not going to go around me and if I send them a deal, they're going to respect that and they're going to even if it comes to them in a different angle, they're going to they're going to find a way to to, you know, get me paid or pay me in some some fashion or
some form.
I really respect that and uh it is a small community. You realize it's it's very tight-knit the longer you're in
this. Totally. And I think the brokers it's it's hard for you guys. Yeah, you know, it's hard for everybody, but you know, you guys deserve and earn every penny, you know, you you do. I mean, it's not like, you know, you get a deal and you're selling it in one minute. I mean, it was like that at one point, but now it's so so much harder and the marketing and the time and this and you know,
sometimes it doesn't feel that way. Some sometimes people feel or treat us like we're commodities, which I get it. We can be, you know, um tenacious at sometimes trying to follow up
with people and whatnot, but job. Yeah.
Know you're doing your job. It's part of what we're our job is. That's why people pay us is because we're tenacious and we're going out there and shaking the tree and getting things done. Exactly.
And you want someone like that on your team. Totally. But you know, if it's a good deal and the numbers make sense, the deal is going to
sell.
Yeah. Yeah. You know, doesn't matter if it's a I want to say good broker, bad broker, ethical, not. It's just the numbers are going to be something you know people are going to want to buy it. The numbers are off.
It doesn't matter who you are. Yeah, that's very true.
To sell.
It's very true. Well, but the last question I have for you, Mike, LA, future of LA, do you believe in LA? Do you believe that we're in a place where LA is where you want to be invested and continue to invest?
I do. And because I know LA, LA's going to come back, right? Things are going to change. LA's a great place to live, right? I know everyone talks about the weather. It's just a nice lifestyle. You know, it's my home. Been here my whole life. And I just think, you know, we'll have hiccups along the way. We always have. And things are eventually going to straighten out. And I think, you know, the market's going to get better. Hopefully, interest rates are under control. Insurance changes, you know, and things will get better. But right now, they're not.
And you just got to hold on.
Yeah. Stay alive.
Yeah, you got to stay alive. Mike, thank you very much for coming on here.
I appreciate it. Thank you for having me. Of course. I enjoyed
this. Me, too. It's great.
Thank you.