The Building Culture Podcast

#35 Moses Kagan: Building Generational Wealth with Generational Assets - "Indefinite Holds" in Real Estate

Feb 20, 2025

Moses Kagan, co-founder of Adaptive Realty and ReSeed, offers a wealth of knowledge as a real estate developer and investor. He dives into the advantages of 'indefinite hold' strategies, emphasizing long-term ownership over traditional flipping. Kagan critiques typical investment metrics, advocating for sustainable practices that foster community wellness. The conversation highlights innovative capital raising through social media, the significance of trust in investor relationships, and the importance of focusing on post-tax returns for true wealth generation.

01:19:07

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Moses Kagan

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Quick takeaways

The indefinite hold strategy in real estate focuses on long-term ownership, yielding better outcomes than traditional IRR-driven flipping models.

Transitioning from IRR metrics to post-tax returns emphasizes sustainable practices that benefit investors and enhance community environments.

Establishing capital partnerships relies on building personal relationships with investors who prioritize long-term value over short-term profit maximization.

Deep dives

Indefinite Hold Strategy

The concept of indefinite hold in real estate is centered around the long-term ownership of well-located properties rather than focusing on short-term financial metrics like Internal Rate of Return (IRR). This approach is influenced by the success stories of families that have accumulated wealth through resilient property ownership practices over decades. The strategy contrasts sharply with traditional real estate private equity, which prioritizes rapid flippings and IRR-driven goals, leading to potentially unsustainable business behavior. By promoting a philosophy of holding properties indefinitely, investors may foster stability within their portfolios while contributing to long-term community development.

Intro

2min

Investing in Indefinite Hold

15min

Navigating Real Estate Investment: Tax Strategies and Investor Mindsets

5min

Innovative Real Estate Investment Strategies

27min

Navigating Investments and Innovative Design in Real Estate

4min

Building Trust in Real Estate Capital

21min

Navigating Real Estate Challenges

5min

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