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Taylor Avakianat 23:00

I don't remember what prop it was or what what which is the property taxes. Keeping the the property tax. Oh, I'm sorry. the rent control. Rent control. Yes.

Larry Taylorat 36:39

…two, three, four buildings in their entire life. Mhm. And these buildings are aging and the capital improvements that are required are expensive and rent control has locked in people in their apartments for long periods of time. I have I have apartment buildings where tenants have been there 40

Larry Taylorat 38:39

…know, Chicago and New York that are built to withstand time. These buildings basically would need to be maintained significantly to be productive. Rent control became a disincentive for landlords to reinvest in their properties. So when you think about it because they can't be removed ultimately they are going to become more

Larry Taylorat 39:33

valuable because while you can build a new building on any property that was zoned commercial but if you try to build a new building on a property that is already an apartment building that's under rent control you can't do it.

Greg Hebnerat 1:06:17

…program at every level, and it's done exactly the opposite of what somebody who doesn't work in real estate thought it would do. I think I think the rent control is going to have the exact same thing. So, I think the the resi market is you know, it's going to have a fight for the next 12 to 18 months. I mean, I think it's going to be It's going to be challenging. You know, there's still a massive number of people that are stuck with an existing mortgage, and there's

Jeff Gleibermanat 17:07

…is what we believe is right in the regulation and in the market. But it's really difficult and you know, there is the prop that almost passed for rent control which that was a big fight and you know, luckily we won. Yeah, so and I'm sure there'll be many many more to come. Um just even investor interest in California has been going down as well. So you I just number one thing that I hear from investors is we prefer not to invest in California. And these aren't necessarily real estate experts. They're trusting us…

Taylor Avakianat 21:27

market. That's a rent control market.

Henry Manoucheriat 40:00

…I mean, look at what Weinstein tried to do. Weinstein 1.0, 2.0. Hopefully, he's done. Mhm. It basically damped the the apartment business on the rent control side

Henry Manoucheriat 40:52

for the last 5 years. You know, people couldn't decide etc. But despite all this, so we redlined LA as a firm currently. We'll get to that. Okay. For the last 3 years, we were done. And we didn't buy anything. I think the last LA building I bought the last rent control building was 3 years ago. And then you look at what's happened to San Francisco. They destroyed San Francisco. But some guys got in and people get fed up. See that this lunacy is not sustainable. It's not working. Big firms left. Retail stores…

Henry Manoucheriat 42:32

the valley that is not rent control. We haven't yet dared to buy go back into rent control. But I know two groups I know in the city, young guys, you know, Orthodoxy was very bright. I don't want to mention the name. They have a thesis. And the thesis is that they're going to go buy these older character buildings, rent control in LA, really cheap. You could buy these deals for 250 a 2017 18. They could buy for 147 of those, 6 and a2 cap, maybe close to a seven cap, and go ahead and fix up the uh concrete…

Henry Manoucheriat 55:00

Cuz when I when I hear that, I think about hallelujah. my my job is going to be so much easier than it is now. You're going to see a nice pick up in volume. Yeah. Yeah. I think that proverbial four and a half cap rate is coming back. Wow. You know, I mean, right now you can buy buy at five and five and a quarter. I mean, you know, some LA rent control, let's just pertain to LA, you know, some of these contian guys buying rent control stuff, you know, they're buying at six, six and a half caps.

Jan Brzeskiat 25:36

of, you know, big projects in urban infill LA, I'm not expecting to see a lot of that in the years ahead. Yeah. Um I just don't know if you can do a big a big project, why would you choose LA to to invest large amounts of money when what if LA passes some rent control thing where or vacancy control worse? That's a that's a too much risk.

Jan Brzeskiat 28:25

…it. It popped up and then we had a reprieve. But long term there's a lot of reasons to think inflation will come back and that will lead to higher rents unless there's rent control, right? Mhm. And that will lead to higher values cuz ultimately the rent and the income are are the driver of the value and the cap rate as well. Sure. And I don't think cap rates are going to go way up from where they are. I mean, I don't know if it's a six today.

Jan Brzeskiat 32:10

Yeah. So, that was one signal. Um, and and then I think this whole rent control thing I again I don't know what's happening with that. You would know a lot more than I do, but there's a general feeling of us versus them that I'm that I'm feeling out there. And it feels like um a lot of voters would vote yes, even if the consequences are terrible for real estate investment. I think there's a lot of people that would vote in favor of some sort of rent control or even vacancy control. Mhm. And and there's not,…

Daniel Nagelat 19:34

We had rent control, but we knew how to operate within rent control. Rent control has been around in LA since 1979. Yeah. Right. And uh so it had been around for a long time and we we we we had kind of figured it out. Um but um the regulatory environment started getting harder and harder and what we came to appreciate at after you know we dealt with COVID, right? So, just so you know, we

Daniel Nagelat 47:22

…state that led the country in population growth every single year. That's not the case anymore. Um, the second thing is, let's say you do get that rent growth. California, I'm worried, is going to follow in the ways of New York and how the New York is handling rent control. Um, and it just eviscerated values there. Um, and the success of of owners and and developers is seen as a problem, right? If developers and and and owners can be successful, they'll be incentivized

Taylor Avakianat 1:05:52

…got to manage that and someone's got to deal with those situations. And there's nuances where if an investor from Georgia came and tried to buy a rent control building in Los Angeles, like they'd probably get their ass beat because it is freaking hard. It is very hard, right? And so you kind of need that special skill. And so my thought was, okay, there's this tokenization stuff, but you still need an operator

David Moghavemat 12:02

…Aros collateralized by multif family that's how we met met Jinx and uh great stories there and once that market dried up started reverting back to rent control La SoCal NorCal started expanding up the coast Farhan then also led the way to expand into Oregon and I think we were the most prolific buyer at one point in Oregon

Kamyar Shabaniat 28:40

do not think the current policies that are being passed or this being discussed are actually going to help those because they you can go look at other places they've done rent control and and and um um uh bacy control thank you yeah it never works look at the market where it has it it does not work and there is no mainstream Economist who will tell you it actually works yeah that's the crazy thing like Economist left and right will tell you these programs do not work to solve the problems you want to solve how do…

Taylor Avakianat 32:56

this in Argentina I think in article came out how they had super strict rent control the person I know this is four five seven years ago they got rid of rent control completely and the rents actually came down 30 or 40% because everyone started building again and it's like wait a second uh if you don't put restrictions then people will build and then the supply and demand fundamentals will be there and then the rents come down surprise right right how crazy is that a great example of that yeah which is just I mean…

Marc Menowitzat 13:41

stack basically has is we monitor everything from every single word that's spoken to a resident on a phone to uh I'm got I guess I'm considered a control freak. And then we manage every time a toilet's flushed and where every single employee is located within 15 minutes of where they are, so we know where everybody is. Wow. We have that kind of control over the you know, the operation. And we have a system called Rental Max, which is basically listens to every phone call when somebody calls in to rent an apartment…

Taylor Avakianat 22:46

They really do matter. Do you think that there could be because we we beat it LA um they were going to do something like the uh rent stabilized or trying to do something like vacancy control. Right. Clearly that's not a good way to go about it. Are they do you think New York is going to reverse that andor do you think that that possibility could come to Los Angeles if we continue down the path?

Hiten Samtaniat 55:13

…Williamsburg. Building is very generous term. This was like a twostory walk up brricked up thing that was home like every pretty much if you were a renter in Brooklyn in Yepy Brooklyn in the mid2010s, you were sending your rent checks to a building called 199 Lee Avenue. Okay. Tiny ass building. yet it was sort of a it was the mailbox for all the hidic landlords who control that slice of Brooklyn. So we did like a profile a character sketch of this building. You know we we looked at how it operated who was…

Jeffrey Jaegerat 0:00

7.4 million homes underserved in terms of housing in the country. Whoa. Right? And what that translates to is that 50% of renters in this country pay more than 30% of their income on rent. Jeffrey Jaeger is the co-founder and principal of Standard Communities. And for over 20 years, he has led more than $6 billion in real estate transactions, helping build one of the 50 largest affordable housing portfolios in the US with over 30,000 units across 22 plus states. My boss is here, the seller is here. This broker's…

Daniel Nagelat 20:00

…So, we have a we have a big portfolio here. CO was really challenging, right? the way that the city just reached into your pocket, gave you no rent increases for four years, you know, uh didn't cap insurance, didn't cap property taxes, didn't cap like kept on, you know, payroll from, you know, um um minimum wage increases that had a trickle down effect or trickle up effect uh at your properties. Um it was it became really really challenging really clear um that the barriers to entry story or the benefits of it in…

Steve Ludwigat 55:07

Correct. Right. And we also have control of the entire uh process for time. You know, let's just talk value. We buy the asset, property management company goes in, right? Works with our construction. Our general contracting team, they're getting the materials from Toro. And so we're saving our investors a lot of money and time. Uhhuh. And so we're getting that unit renovated online quicker, looks better, rents for more, costs less.

John Drachmanat 10:41

And they're not paying rent for So, one of my f favorite, it's not favorite, it's not the word, but one of the stories I had is we have a property in Glendale. It's a workforce housing project. We had a tenant show up to the management office, say, "Hey, can you watch my unit going to Hawaii for two weeks?" The manager said, "You owe $50,000 in back rent." She said, "I don't have to pay that." Right? And so, I mean, I have a litany of stories about that, people taking advantage of it. And so unfortunately when you…

Farhan Mahmoodat 7:09

control what we could control right you don't always see the you you don't or often don't see what's going to come but if you know the deal you understand the deal you know it's like uh we always talk about the unended yield on cost MH that's our North Star some people threw that out the window in 2122 because when the rents growth yeah yeah and made a ton of money doing it and you know David and I were just talking about it and we were you know at that time we were like are we the dummies not buying this stuff you…

Kyle Ransfordat 25:26

…first and then 30 or 40% return on the tax savings that have generated from the depreciation of it and then we split thereafter we let them be in control so they get to decide when to sell and when not to sell and we're not in the business of flipping that asset of saying hey been three years let's sell it instead we say just hold it just wait 10 years you know be being around long enough you go um you know two years out of every 10 rents go up like 15 or 20% and other years they float around a little bit one year…

Taylor Avakianat 25:15

right everything comes and goes and well in retail you know rank control um they're trying to they were trying to put something on the ballot to control commercial rents as well I don't I

John Drachmanat 48:31

…and I worked on a business plan in school to buy sub institutional multifamily and supply constrained markets where new supply is really driving rents and you have this older product specifically in Southern California. We have all this 50s60s and 70s product that was built um that you could draft off of that and if you could go buy a deal, really improve it that there would there was a great business plan around that. And specifically, I've been in Long Beach now about five years. I've been living here. I see all…