PassivePockets: The Passive Real Estate Investing Show

Leka Devatha’s Playbook: Creative Exits, ADUs & Value-Add Deals

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Jan 13, 2026

Join Leka Devatha, a former Nordstrom corporate star turned real estate investor and author, as she shares her journey into full-time investing. Leka reveals her strategies for creative exits and value-add deals in the competitive Seattle market. Discover how her first LP deal thrived thanks to careful operator selection and interest-rate caps. She discusses leveraging middle-housing laws for new opportunities and offers actionable insights on sourcing, underwriting, and operational excellence.

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ANECDOTE

First LP Bet That Held Up

Leka invested her first LP check in 2021 with a Southern operator after months of underwriting together.
The deal was a 160-unit, $30M property near Orlando that paid consistent quarterly distributions despite rate headwinds.

ADVICE

Choose Sponsors With Rate Caps

Pick operators who structure caps on interest rates and avoid fee-grab behavior.
That discipline helped Leka's 2021 deal survive refinancing without capital calls.

ANECDOTE

Operator Challenges During Rate Spike

As an operator in 2022, Leka faced a last-minute bank pullout and higher rates but avoided capital calls.
She credits daily hands-on work and long-term debt with keeping the project viable toward a 2027 exit.

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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.

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