David Ellebrecht
@davidellebrecht
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Investing in Value Add Multifamily Real Estate in the Western US. $250m AUM.
Los Angeles, CA
Joined April 2011
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Last Seen Profiles
TIL
The US Forest Service rents out dozens of its old, remote fire lookouts now that they have infrared tools / planes as an alternative.
These cabins have 360 degree views, and some even have kitchens, desks, beds, etc.
One is located in near Evergreen, CO and costs $80,
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Was scouting neighborhoods today thinking about why some felt nicer than others:
- 3ft sidewalks vs. 4ft (or 5ft).
- visible power lines or not
- fences on the front property line or not
What else makes a neighborhood feel nicer than others?
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The best hotels have:
- a large property to explore
- classes / experiences to encourage you to stay on site
- multiple restaurants of different styles
- phenomenal customer service
Staying at Enchantment (Sedona) for the last few days, here’s what stood out:
- golf carts
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What real estate play has made me think the most recently?
DOG PPL in Santa Monica.
A huge dog park with wifi, tables, coffee / full bar / snacks where dogs can run off leash all day while being monitored by “rufferees”, allowing their owners to work.
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This one chart encompasses so many things wrong with America right now:
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San Diego has the best quality of life in the US.
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Buy RE in irreplaceable locations!
George Clooney’s compound cost $8m when he bought it in 2002(ish) and is worth $150m(ish) today.
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The best long form essay I've read in a while, from
@david_perell
"Commitment happens in stages, and only by embracing it can you stop hugging the X-Axis and climb the compounding curve."
What CAN'T you apply this to?!
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@realEstateTrent
St. Louis?
Cold winters, no snow.
Hot, humid summers.
No oceans, no mountains.
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@NipseyHoussle
This story goes both ways - I did recruiting for a well-known VC who preferred people who had stories of struggle in their lives because he thought they’d work hard. Immigrants, children of immigrants, people with atypical backgrounds, etc.
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From a broker with whom I reviewed 5+ deals very quickly last week, and spent 2hrs on the phone with earlier this week:
-
David,
We have shared a lot of off market opportunities with you.
I appreciate your prompt feedback, but you are not a real Buyer.
It sounds like you
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This video was sent to me by a contractor.
This is a building that was “fully gutted” with permits, but the contractor who did the work didn’t connect a drain line.
This is why I don’t buy buildings that other groups have renovated, unless:
- you know the group and the
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Northern San Diego has unbelievable potential. No where else in CA makes me as excited as this area.
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Santa Barbara / Ojai design is some of my favorite in the world.
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“I really like these grey floors, let’s use them for the backsplash also”
- the Phoenix Flipper
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Sourced doors on Alibiba at a fraction of the cost of domestic options.
We've had no problems with them, and our installer said they are the same quality he's used to for domestic brands.
Sharing our success here as Artem, who taught me about this process, always shared with
@Cribdilla
We have!
Two sets of sliding accordion doors. 25% of US market pricing.
We’ve had 0 issues. Quality was great.
Artem taught me about this process a while ago over lunch.
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Just closed -- 50 units in Denver! Can't wait to get going on this clean 80s asset!
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Wallace Neff, the architect who’s largely responsible for developing the “California” style, pulled inspiration for Spanish and Mediterranean designs.
You’ll find his work scattered around Southern California, where he created most of them between 1925 - 1970.
Since these
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Bought a 40+ unit value add building with more than an acre in the back.
Broker said I might be able to build a few units, but he wasn’t sure. It wasn’t part of our original strategy.
Just got confirmation I can get it rezoned and build up to 90 units 😍
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One of the many creative ways I’ve seen people handle squatters:
I know an LA owner who had gang members squatting in a building of his.
He went to HD and got a suit / sprayer that pest professionals use. Showed up on site and let them know the building was infested & they had
A story through videos of some squatters who repeatedly broke into one of my properties in Portland.
With no legal consequences.
Eventually leading to the house going up in violent flames.
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Just closed on this 34 unit in PHX. Bids / contractors already lined up, and demo starts Monday!
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@Nerd4Cities
Union Station has been under redevelopment for years to try to maximize the space. The hotel, restaurants, and new soccer stadium nearby are a great steps in the right direction.
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@JoePompliano
You should put together a chart comparing this to other professional stadiums, like ballpark Village in St. Louis, etc.
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One of my business partners had gang members squatting in a building of his in Long Beach 20+ years ago.
He went to HD and got a suit / sprayer that pest professionals use. Showed up on site and let them know the building was infested & they had to be out for 24hrs while they
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Top amenities renters are willing to pay for & their premium:
- Washer/dryer in-unit ($54.73 monthly premium)
- Air conditioning ($54.73)
- Soundproof walls ($46.21)
- High-speed internet access ($47.93)
- Walk-in closet ($43.46)
From Grace Hill.
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I didn’t know that Opportunity Zones were the brainchild of Sean Parker, the founder of Napster (amongst other outstanding investments).
Is this common knowledge?
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I’ve been absent from Twitter for a while as I focused on closing the biggest deal of my life. Not taking investors on this one, sorry!!
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@BarryRoland19
Curious to hear where this lands! I’d guess $350k?
We’ve offered tenants $100k to no avail. And they were NOT in BH…
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Unreal morning hikes today.
Please pardon my divergence from real estate while I’m in one of the most beautiful places in the world.
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LA’s first no-alcohol bar, Stay, is opening in Chinatown.
Is this going to be a hit or a dud?
(Photos from TimeOut)
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Any recommendations for protein powder that is clean and doesn’t taste awful?
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A couple photos from one of my favorite neighborhoods:
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Wrapping up the year with our 3rd closing in the last week...
42 units in Denver!
Why do I like this one? -->
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Large deal ($40m+) just dropped out of escrow.
Why?
They didn’t get insurance quotes before tying it up…
They underwrote $500 / unit (or so) based on T12.
Didn’t take into account that:
- insurance prices are skyrocketing
- the owner had a significant portfolio allowing
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@FritzTheDev
@ulkar_aghayeva
“Three sisters” planting is one of the more genius agricultural developments.
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Significant multifamily broker in PHX just told me on a call that he thinks the market is down 25% - 30% since January.
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Best burgers in LA:
My list so far:
- Father’s Office
- Hinano
- Hi Ho
- The Win-Dow
What am I missing?
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Best ways to use CoStar:
1) find the most active brokers in a market by going to menu / professionals / deal makers. I select all brokers in my market that have done more than 1 MF transaction in 18 months, and I work my way through the list regularly.
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Another gem from the same broker, in the previous email:
“Only the real ballers are winning deals now. Cheap talk and gossip are for the lookie loos watching the real players from the nickel seats.”
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In 2024:
WE ARE BUYING!
Multifamily + Built to Sell / Built to Rent Communities
- $5m - $75m+
- AZ, CO, or SoCal (OC / SD)
- age agnostic (full guts to new construction)
Why work with us?
- we will provide feedback within 48h
- we are transparent
- we can be on site
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What’s the cost?
- $120 / month for access + $25 for an additional dog.
Why do I like it?
- makes $$
- creates a community for dog lovers with events (live music, food trucks, etc.)
- seemingly low barrier to entry
- could do many variations (higher end, etc.)
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Where are the best places to try save money in multifamily real estate?
Where are the worst?
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Learned about this as I was taking off and had a few hours to think about it on the plane.
Had lunch with him a few months ago, and in addition to being incredibly motivating and generous, he provided me with tangible ideas to improve our business immediately. Was always
Am writing w incredibly sad news:
Our friend
@ArtemTepler
is no longer w us.
Will post a link to GoFundMe below to help his partner & young daughter. Hope you will join me in giving what you can.
Pls like, RTs, etc. for distribution, so we can raise as much $ as possible.
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@shawngorham
You are lucky the police actually helped! We’ve had many times that the police tell us they can’t do anything.
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I spent 30 days in the Talkeetna Mtns of Alaska:
- no phone
- I saw less <20 people the entire month
- food / trash was brought in / taken out by plane
- we dealt with: bears, moose, snowstorms, insufficient food…
…and it was one of the best, most important months of my life.
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Just spoke to a friend who’s working on a deal on PHX.
I asked him how he’s possibly finding sizable deals in PHX that pencil right now, as I haven’t had any luck and we underwrite deals similarly.
- 10yr fixed seller carry
- 80% of PP
- full term IO
- 2.65%
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Going to Sedona for the first time next week - what recommendations do you have?
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A first for me this morning:
Woke up to a CoStar notification that a building of ours was for sale.
It’s not, and we don’t have any kind of listing agreement signed.
Called the “brokers” phone, asked who she was / what she does. She told me she’s a wholesaler who could put
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If you’re new to real estate acquisitions, one of the most important skills you can build is the ability to quickly determine which deals to spend time on, and which to skip.
Early on, I built a simple “Quick Property Assessment Model” that took me >5 minutes to fill out and
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@Camp4
This entire documentary is outstanding. V cool to see ALL the powerhouses in music at the time come together so quickly and collaboratively.
Couldn’t help but doubt anyone could come close to pulling this off today…
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Introducing myself to my new followers:
I run acquisitions for Turnstone, a real estate operator focused on providing B/C apartments in markets with significant growth tailwinds.
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I’m getting a dog in 6 weeks. I’ve never had one before. What do I need to know?
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WE ARE BUYING!
Multifamily + Built to Sell / Built to Rent Communities
- $5m - $75m+
- CO, UT, AZ, SoCal (OC / SD)
- age agnostic (full guts to new construction)
Why work with us?
- we are flexible and open to creative structure
- we will provide feedback within 48h if
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Quick math from this morning:
We've purchased 1.5% of the deals we've fully underwritten, and that doesn't include the many deals I've quickly ruled out doing back of the napkin underwriting.
Lesson -- don't give up if you can't find deals, and keep underwriting!!
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Scoping the lines is one of the lowest cost / highest reward diligence item you can do on any new purchase.
If the lines are in bad shape, it could be $100k+ to fix.
Sending a plumber with a camera to scope the lines costs less than $500.
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@shawngorham
Have you ever bought a car through Costco’s dealership partners?
They’ve beat the best prices I can find, even from people I know who own dealerships!
Pretty cool.
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Every deal I underwrite, I save in a “Reviewed not Purchased” folder organized by geography.
If a deal hits the market again, I can easily see what work has been done / how rents have changed since my original underwriting.
1/x
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Reviewed an OM this afternoon.
Brokers are advertising that a local PM underwrote the deal and provided the underwriting for the OM.
I know the PM well, so I called them, and they sent me their underwriting in excel.
The PM's underwritten expenses were 30%+ higher than the
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It’s pretty wild — depending on where you are, it reminds me of some of the best parts of South Bay (beach vibes), Brentwood (lux, walkable neighborhoods), Agoura Hills (more rustic, open land with stables, etc), Pasadena (very green, manicured, beautiful homes).
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My favorite chicken sandwich.
Bonus that there’s one in every market we buy buildings in, so always a solid bet for meetings.
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Two new hotels going in on Abbot Kinney, famously called “the coolest street in America”.
Hotel
#1
- Venice Pl
- 78 room boutique hotel
- 2,000 sqft of office
- 6,500 sqft of retail
- two restaurants, Felix and Ayla
- it’s been 10 YEARS since it received approval from the
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When you see the first deal in 6 months that pencils, you do whatever you need to do to see it the next day (incl. getting up at 3:45a…)
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Holy smokes Tel Aviv is an amazing city with amazing food.
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One of the best burgers in LA is only served for a few hours a night, and only on Sundays and Mondays.
The only food on the menu is a burger and fries.
The rest of the time, it’s a bar hidden behind one of the trendier Michelin-starred restaurants in town.
Another unique
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Today:
- Received a call from a broker regarding a possible deal he shook loose from cold calling,
- Underwrote the deal. Had a quick 2 minute feedback call with broker.
- Submitted LOI to broker
- LOI submitted to seller (with me CC'd) within 45 minutes of his initial call.
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@shawngorham
Definitely lucrative. MANY add ons also (inspection / camera, alignment, new chimney cover, etc.) Many people know 0 about chimneys, so they frequently get away with it.
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Why is value add multifamily so important?
Of the 21.3m apartments nationally, 46% were built before 1980.
By renovating the existing stock, we can provide quality, affordable housing where it’s desperately needed.
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Whenever I come back to LA from STL, I call my favorite BBQ spot, Bogarts, and ask them for pulled rib meat and burnt ends to take back.
They vacuum seal some of it for me, pack the rest in 1lb bags, and freeze it for me.
I put it in a “cooler” and haul it home.
TSA stops
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@evanmr
Sounds like a recipe for disaster.
“The fastest way to starve a horse is to assign two people to feed it.”
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47% of adults under 50 now say they’re unlikely to ever have kids. This is up from 37% in 2018!
Oddly, affordability is the 4th most common reason with “they just don’t want to” as reason
#1
.
This will have a massive impact on housing, economic growth, military, etc.
Why is
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@realPhilLanders
You are the second person to say this, but it has never occurred to me as many of my favorite neighborhoods have cars parked on the street.
Perhaps this is more of an issue if you live near a really busy area where people are just looking for an open parking spot, or you are in
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Broker just listed a $30m listing in one of our markets.
He’s been taking to the owner / their family for 30 years, and they just decided to sell due to a death in the family.
The family doesn’t own any other assets in his market! He spent 30y building a relationship, adding
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In Q1:
- Colliers - net loss of $20.2M
- C&W - net loss of $76.4M
- JLL - net loss of $9.2M in Q1.
- Marcus & Millichap - net loss of $5.8M
- Newmark - net loss of $10.35M.
- CBRE - $116.9 in net income
5/6 largest brokerages posted losses in Q1.
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⁃Not playing well
⁃Got an LOI accepted during the round
⁃Sunny and 70
I’ll take it any Sunday.
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@pdelaguardia
Mature landscaping is most important. This takes time though. Was driving younger neighborhoods thinking how amazing they’ll be later.
Distance between houses is nice, but not imperative I don’t think. I was driving some coastal cities where the neighborhoods felt great, but
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@Camp4
Thanks for this, Kevin. I just sent this to my wife. So many of the things you mentioned are false indicators. And I have seen many kids who are pushed too hard in those categories and burn out.
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@moseskagan
@ArtemTepler
Had lunch with him a few months ago, and in addition to being incredibly motivating and generous, he provided me with tangible ideas to improve our business immediately.
Incredibly sad.
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Want more deals?
Don't email brokers. Don't text brokers.
Call them!
Want even more deals?
Spend more time meeting brokers face to face!
You'll build deeper relationships, learn more about them, and learn more about what they're working on.
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If you’re new to real estate acquisitions, one of the most important skills you can have is a sense of urgency.
If you don’t have it, acquisitions isn’t for you.
There’s no learning it.
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@FluentInFinance
Have a friend who lived aboard a cruise ship for a year or two as a kid as her dad had a position managing the ship.
Says it was an outstanding experience as a kid to meet people from all over and see different places.
Not sure it’s be the same as an adult…
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Hunter's breakdown of this transaction is second to none and demonstrates how insanely knowledgeable he is.
Highly recommend for anyone (earliest beginner to most advanced) if you're looking to constantly improve your RE knowledge.
You're going to want to have your first coffee ☕ before diving into this one.
Blackstone's AIR Communities Acquisition and the Limitations of Cap Rate Analysis
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@JeremyGlantz
@moseskagan
- Justin Kivel’s courses
- Axios has newsletters specific to each market - good to teach to follow market news, not just RE news
- Podcasts on different business strategies, not relating to real estate, and how they get started. Always good to bring learnings from other fields.
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Moving from LA to OC in two weeks.
My car insurance will go down by 10%.
My personal property insurance will go down by 22%!
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Another day, another “fully renovated” 60s deal = new everything but mechanical, electric, plumbing, which is original. Might as well say, “we get the rental upside, you get the headaches.”
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“Your proposed pricing is less than their basis, so that’s a non-starter”
I’m hearing this a lot more now than 6+ months ago.
Watch these deals like a hawk! And check in on them frequently.
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A few reasons why I’m LONG on Denver / Boulder:
1) POPULATION GROWTH: 18% population growth over the last decade vs 7% nationally
2) AEROSPACE: more aerospace employees than any other state (>29,000 employees!). Lockheed, Boeing, United Launch Alliance, RTX, BAE, Blue Origin,
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