Innovative Real Estate Investment Strategies

This chapter explores innovative approaches to real estate investment, emphasizing the importance of direct relationships with accredited investors over institutional funding. It critiques traditional short-term strategies and advocates for long-term ownership to build generational wealth. The discussion also addresses the dynamics within family offices and highlights the complexities of managing long-term investments while maintaining trust and investor relationships.

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Moses Kagan has a unique take on real estate development and investing – and he’s influenced my thinking substantially over the past couple of years.

He is a highly successful syndicator, investor and developer with over $200 million in assets under management. He runs Adaptive Realty, having renovated over 100 multi-family buildings in Los Angeles, managing them in-house while specializing in the "indefinite hold” strategy for long-term wealth building.

He is the Co-Founder of ReSeed, a platform offering long-term GP and LP capital, along with mentorship for emerging real estate operators nationwide. He also hosts Reconvene, a highly regarded annual “unconference” for real estate operators and passive investors to connect and share knowledge. I attended last year, and it was awesome!

And lastly, he is a Twitter personality and avid blogger, sharing valuable insights on real estate and business. I highly recommend you follow him.

This is an excellent conversation about practical investment and real estate development philosophy, and I hope this conversation has as big of an impact on you as meeting Moses has on me!

TAKEAWAYS

Holding real estate indefinitely often leads to better investment outcomes than IRR-driven flipping.

Traditional real estate models incentivize risky short-term decisions, while sustainable strategies benefit both investors and communities.

Investors should focus on post-tax returns rather than pre-tax IRR, as tax considerations play a crucial role in long-term profitability.

Wealthy families and patient capital partners are more aligned with indefinite hold strategies than institutional investors.

Unlevered yield on cost and all-in price per square foot are key financial indicators for long-term real estate success.

Building direct relationships and trust at scale is essential for securing capital, especially for indefinite hold investments.

CHAPTERS

00:00 Introduction to Real Estate Development Philosophy

06:06 Understanding IRR and Its Implications

11:55 The Importance of Long-Term Thinking in Real Estate

17:59 Finding the Right Investors for Long-Term Strategies