The FORT Podcast: Moses Kagan – Part 1 | On Value-Add MF, A New Core Strategy, ReConvene, Los Angeles, and How He’s Looking at The World
Moses Kagan is the Co-Founder and Head of Adaptive Realty, a Los Angeles-based development, and property management group. Since 2018, Moses has overseen the repositioning of 80 properties in Los Angeles and grown Adaptive from $0 to $110M of property under management. Moses joins Chris for his third appearance on The FORT Podcast.
In this two-part episode, they discuss the decision to not deploy a fund he raised in early 2020 and his new core strategy. They also explore rent control vs non-rent control. How he talks to his family about wealth and potentially taking over his business, learnings from ReConvene, and where we go from here…
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(02:35) – Moses’ Journey Through ReTwit
(04:08) – What do you think the next 2-3 years look like for you in this online journey?
(06:18) – How do you explain this Twitter world you’ve built to people not in the know?
(07:48) – What is your experience putting on ReConvene and what does it mean for the greater RE industry?
(12:37) – Was there anything that stood out from the feedback you got from the event that you’ll be implementing going forward?
(14:31) – Thoughts on ‘Quality’ When It Comes to Moses’ Expectations for Doing a Deal to Lead into His New Buy Strategy
(21:11) – Bank’s Attitude Toward Owning an Asset For a Year vs. Having a Loan on the Asset
(25:20) – Spreadsheets vs. Reality: Experienced Investors are Losing Out to Inexperienced Investors
(26:51) – How are you processing all of the craziness in the CA real estate market?
(29:35) – Moses’ Fund and The Investor Reactions to Not Spending Any of It Over Covid
(35:03) – Dealing With The Eviction Moratorium in LA
Episode Summary
Moses Kagan, acclaimed for his expansive knowledge and experience in the real estate sector, joined Chris Powers in a riveting podcast episode, unraveling his keen insights and perspectives on various facets of real estate investment and management. Kagan’s detailed understanding, derived from managing a diverse portfolio of stabilized buildings for over a decade, provided listeners with an enriched and comprehensive view into the intricate dimensions of the real estate realm.
Initiating the dialogue, Kagan emphasized the criticality of possessing reliable data on operating expenses in real estate investments. Highlighting the common pitfall of underestimating operational costs, Kagan underscored the resultant overestimation of yield, leading many investors astray. This discussion illuminated the essentiality of precise and informed financial planning and analysis, ensuring investment strategies are rooted in reality and practicality.
Progressing further, Kagan delved into the arena of renovation and construction, shedding light on the current exorbitant costs in the market. Sharing his on-ground experiences and challenges, Kagan revealed the prevalent underestimation of renovation expenses by many investors. This miscalculation, as Kagan elucidated, culminates in unforeseen financial burdens post-purchase, impacting the overall investment viability and return on investment.
In the subsequent segment, Kagan’s conversation traversed the path of real estate deal dynamics. Expressing his aspiration for a mechanism to short real estate deals, Kagan highlighted the absence of tools to financially express skepticism and caution in real estate transactions. This gap, as discussed, leaves room for potential financial losses, underscoring the need for enhanced financial instruments and platforms in real estate investment.
As the dialogue unfolded, Kagan brought to the fore the challenges faced by experienced investors in the current real estate market. Discussing the influx of inexperienced investors, Kagan highlighted the potential market disruptions and heightened competition, emphasizing the necessity for robust knowledge, insight, and strategic approach in navigating the investment landscape.
Transitioning to the topic of second chances in real estate transactions and rentals, Kagan shared his personal inclination towards offering opportunities for redemption. Despite his personal favor, Kagan outlined the regulatory and practical challenges in implementing such an approach, particularly with marginal applicants, underlining the complexities intertwined in the regulatory and operational frameworks of real estate management.
Delving deeper into the regulatory challenges, Kagan elaborated on the difficulties in navigating the current regulatory environment. Highlighting the default requirement for co-signers, Kagan illuminated the resultant disparity and inequality, benefiting individuals with affluent backgrounds and leaving others in a disadvantaged position.
In the latter segments, Kagan discussed his responsibilities and commitment as a real estate manager. Balancing his personal inclinations with the obligations towards investors and property owners, Kagan underscored the imperative of ensuring safety, compliance, and maintenance in property management. This discussion reinforced the paramount importance of ethical, compliant, and responsible real estate management, ensuring the welfare and interests of all stakeholders involved.
In the concluding sections, Kagan summarized the key insights and takeaways from the conversation, reiterating the need for informed, balanced, and strategic approaches in real estate investment and management. The episode wrapped up with an emphasis on understanding market dynamics, navigating regulatory challenges, and ensuring sound and informed investment decisions.
The FORT is produced by Johnny Peterson & Straight Up Podcasts