Complex Systems with Patrick McKenzie (patio11)

How real estate investing works with Moses Kagan

Oct 17, 2024

01:28:30

Snipd AI

Moses Kagan, co-founder of Adaptive Realty and an expert in real estate investment, shares rich insights into the intricate world of property management. He discusses the challenges landlords face, from financing to tenant dynamics, and highlights the profound impact of the Internet on capital raising. Kagan compares real estate markets across major cities, dives into the significance of cap rates, and explores how societal perceptions of landlords shape the rental landscape. His perspectives illuminate the complexities of rental dynamics and the immigrant contributions to the sector.

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Episode notes

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Quick takeaways

The podcast highlights the negative stigma around landlords, driven by misconceptions about their profits and responsibilities in providing housing.

Moses Kagan discusses the landlord spectrum, contrasting 'mom-and-pop' landlords with institutional investors, emphasizing the varying tenant experiences based on management styles.

Financing in real estate involves intricate capital structures, blending debt and equity, revealing how investments and regulatory conditions impact property values.

Deep dives

The Perception of Landlords

Landlords are often maligned in society primarily due to the perception that they profit excessively from the necessity of providing housing. Rent is a significant and visible monthly expense for tenants, making it a tangible reminder of their financial obligations. This recurring expense, combined with the complexity of understanding the true costs of homeownership, can create resentment toward landlords, who are seen as reaping the rewards without visible diligence. The discussion emphasizes how misconceptions about the landlord's financial landscape contribute to the negative stereotypes that surround this profession.

Intro

2min

Understanding Rent and Landlord Realities

15min

The Immigrant Perspective on Real Estate Investment and Property Management

4min

Understanding Adjustable Rate Mortgages and Their Implications

2min

Understanding Prepayment Penalties in Real Estate Financing

24min

Understanding Cap Rates in Real Estate

4min

Landlords as Enforcers: The Intersection of Real Estate and Law Enforcement

2min

Navigating Real Estate Equity Financing

14min

The Evolution of Signatures in Real Estate

9min

10.

The Dynamics of Privilege in Private Education and Real Estate

13min

In this episode, Patrick McKenzie (patio11) is joined by Moses Kagan, co-founder of Adaptive Realty, ReSeed, and Reconvene. Their deep dive into real estate investing and property management covers the different classes of apartment buildings, the challenges of property management, and the complexities of financing structures in the industry. They examine how the internet has transformed capital raising, the significance of cap rates, the effects of supply and demand on property values, and a comparison of the real estate markets in different major cities.

The episode is in many ways a follow up to Patrick’s conversation with Jim McKenzie and offers a window into the opaque world of real estate investment.

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Full transcript available here: https://www.complexsystemspodcast.com/episodes/real-estate-moses-kagan/

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Sponsor: Check

Check is the leading payroll infrastructure provider and pioneer of embedded payroll. Check makes it easy for any SaaS platform to build a payroll business, and already powers 60+ popular platforms. Head to checkhq.com/complex and tell them patio11 sent you.

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Links:

Moses Kagan's blog: https://kagansblog.com/
Reconvene Conference: https://www.reconvene.com/

Seth Godin’s book Permission Marketing: https://www.amazon.com/Permission-Marketing-Strangers-Friends-Customers/dp/0684856360

Bits About Money: https://www.bitsaboutmoney.com/
Jim McKenzie on Complex Systems: https://open.spotify.com/episode/6ocJirzGTStuf0K9ITM21X

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Timestamps:
(00:00) Intro

(00:25) Understanding the stigma of the maligned landlord

(04:07) Landlord spectrum: from mom-and-pops to institutional players

(05:29) Inside Adaptive Realty

(06:13) Owner vs. property manager

(07:34) Challenges and complexities of property management

(15:00) Capital stacks and loans
(18:17) Sponsor: Check

(26:25) The role of banks and underwriting in real estate

(40:28) Federal subsidies and small scale landlords

(44:26) Understanding commercial real estate classes

(46:20) Challenges of Class C assets

(47:13) Explaining cap rates

(52:20) Raising equity for real estate deals

(54:16) The syndication process

(56:30) The role of brokers and execution risk

(01:00:52) Legal structures and documentation

(01:10:52) The power of networking and reputation

(01:23:14) The impact of supply and demand on rents

(01:28:03) Wrap

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Complex Systems with Patrick McKenzie (patio11)

How real estate investing works with Moses Kagan