First LP Deal: How She Chose an Operator

Chris Lopez welcomes Seattle-based investor/author Leka Devatha to unpack how she built from flips to a diversified active/passive portfolio—plus what’s actually working in a high-cost, tenant-friendly market. Leka breaks down her first LP deal (why operator selection and interest-rate caps mattered), a 12-unit Seattle value-add that tripled gross rents, and the creative lending + multi-exit playbook behind her new book, Return on Real Estate. She shares a tactical framework for sourcing, underwriting, and operating in micro-markets—and how middle-housing zoning (ADUs, townhomes, duplexes) is shaping her 2026 pipeline.

Key Takeaways

• Operator first: In 2021–22 vintage deals, disciplined sponsors with interest-rate caps, tight PM, and no fee-grab mentality have fared best.
• Value-add or bust (in HCOL markets): Buy below market due to deferred maintenance; renovate only what’s required to hit rent and NOI targets.
• Operations edge: Strict tenant standards, vigilant expense control, and local PM who understands tenant-friendly statutes are non-negotiable.
• Creative capital stack: Build a lender bench (conventional, DSCR, hard money) and use tools like short-term cash-out refis with no prepay to bridge seasonality.
• Micro-market focus: Know the streets, views, and comps; Seattle’s middle-housing rules unlock ADUs/townhomes/duplexes on former SF lots.
• Stack exits: Example—flip the front house, build/condo-map a DADU, keep as a long-term rental, refi to pull cash while holding quality dirt.
• Active → Passive: If you’re newer, learn by placing small LP checks with proven, local operators before scaling your own projects.
• Next 12–24 months: Fewer “easy” wins, but more mispriced opportunities for operators who can create value and manage tightly.

Disclaimer

The content of this podcast is for informational purposes only. All host and participant opinions are their own. Investment in any asset, real estate included, involves risk, so use your best judgment and consult with qualified advisors before investing. You should only risk capital you can afford to lose. Past performance is not indicative of future results. This podcast may contain paid advertisements or other promotional materials for real estate investment advisers, investment funds, and investment opportunities, which should not be interpreted as a recommendation, endorsement, or testimonial by PassivePockets, LLC or any of its affiliates. Viewers must conduct their own due diligence and consider their own financial situations before engaging with any advertised offerings, products, or services. PassivePockets, LLC disclaims all liability for direct, indirect, consequential, or other damages arising out of reliance on information and advertisements presented in this podcast.