Los Angeles, CA – In a recent discussion, prominent real estate operator Moses Kagan outlined critical strategies for young investors seeking to enter and succeed in the highly competitive Los Angeles real estate market. His insights, shared during a lunch with a young aspiring investor, focused on how newcomers can find opportunities despite the presence of more established and experienced operators. Kagan emphasized the importance of unconventional approaches and a strong work ethic to carve out a niche.
Kagan, co-founder of Adaptive Realty, manages approximately $200 million in Los Angeles apartment buildings and is a recognized voice in real estate, particularly on platforms like X (formerly Twitter). His firm is known for its long-term holding strategy rather than quick flips, focusing on acquiring, renovating, and managing properties in the competitive LA landscape. His advice stems from years of navigating this challenging market.
One key strategy highlighted by Kagan involves seeking out "off-market" or "weird situations" where direct competition is minimal. As he stated in the tweet, "> There are always off-market / weird situations you can find where you're not really competing with anyone." Finding such properties often involves extensive networking with agents and brokers, direct outreach to property owners, or identifying distressed assets not publicly listed on the Multiple Listing Service (MLS). This approach allows investors to bypass the fierce bidding wars common in Los Angeles.
Kagan also pointed to a generational shift in risk tolerance among operators. He observed that as operators mature, they tend to become more risk-averse, potentially passing on deals that are not "absolute slam dunks." This aligns with broader industry trends where older generations often prioritize wealth preservation and stable, income-generating assets, while younger investors may exhibit a higher tolerance for risk in pursuit of growth.
Furthermore, Kagan suggested that older, more established operators can become "lazier," losing enthusiasm for the "schlep" of smaller, less glamorous deals. He noted, "> Even though our business was built on accepting the schlep of doing lots of little deals, when I look at one now, I find it pretty hard to get excited, even when the numbers are somewhat interesting in percentage terms." This creates an opening for hungry, diligent new investors willing to undertake the effort required for these smaller, potentially lucrative transactions.
Ultimately, Kagan's message underscores that a willingness to hustle and pursue less obvious opportunities can enable young investors to find deals even in saturated markets like Los Angeles. While acknowledging that building a substantial business solely from such deals presents its own challenges, he affirmed that consistent effort can yield results.