Larry Taylor on Los Angeles Real Estate Investment & Development
Guest: Larry Taylor, a seasoned real estate entrepreneur specializing in Los Angeles real estate. Born and raised in a coal mining town, Larry’s journey took him from Pennsylvania to California, where he forged a successful career in real estate investing. As the founder of Christina Development Corporation, he has navigated the ever-changing real estate landscape, thriving in markets where others see challenges. With decades of experience, Larry shares his insights, spanning from the 1970s to the present day, revealing a wealth of knowledge about syndication, value-driven acquisitions, and the power of innovative thinking.
Big Idea: In this episode, Larry Taylor delves into key themes of real estate investment. He highlights seizing opportunities during economic shifts, crafting innovative investment models, and the importance of value-based property purchases. Taylor’s success stories, like acquiring historic West Hollywood properties, emphasize the significance of market timing and visionary insight. His focus on long-term partnerships and wealth preservation over quick returns adds a valuable perspective for investors at all stages.
Larry: The significance is that’s when Christina was founded. It was the outgrowth of a company that was founded years earlier by myself and a classmate at the University of Southern California. We started our own company as students to take advantage of the opportunities that presented themselves during President Nixon’s wage and price level freeze and the Arab-Israeli war, which caused the oil to go from two to $10 a barrel. It was the great recession, and it was an opportunity to be able to buy income-producing property, where rents had been frozen for years. So, we were learning about this in school as students, and we said, “Well, why don’t we just go out and try to do that?” And we did, and we were successful.
And then my classmate decided that he wanted to become a homebuilder when we graduated college. He went off to be a homebuilder, and I went off to become a syndicator, specializing in buying income-producing properties on the west side of Los Angeles.
Dan: Nice. Tell me about your relationship and the inspiration that you derived from the former deceased LA Lakers’ owner, Jerry Buss.
Larry: Well, it was a very fortunate and opportune moment when I got to visit a friend of mine that was operating in his property management department. Jerry Buss, for people who don’t know, was an aerospace engineer. And with a couple of partners, Frank and Bob Mariani, they founded a real estate syndication business. It was focused on buying apartment buildings only on the west side, and it was based on the aerospace engineers that needed write-offs. Because aerospace engineers in the 60s and 70s in Los Angeles County were some of the highest-paid professionals, federal income tax rates might have reached as high as 70%. So, Jerry and his partners formed the syndication business where they were buying apartment buildings and putting their fellow engineers into them and creating tremendous tax losses which they could use to offset their ordinary income.
When I met Jerry on that one particular day, he said, “So, how do you do your deals?” I didn’t know what he was talking about, and I said, “Well, I see an opportunity to buy a great building that’s undervalued, and I buy it, and then I use a combination of long-term and short-term financing. And then I go about figuring out how to add value to it. When I complete that, I sell the building, and then I look for another one.” He said, “Well, how many can you do in a year?” I said, “In a year, it takes me like a year and a half to do one. But I’ve been doing really well. I’m averaging more income on each building than the President of the United States is getting paid, which was 200,000 a year at the time.”
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Resources mentioned in this episode:
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Larry Taylor & I Discuss Los Angeles Real Estate Investment & Development:
- Adaptation to Market Cycles: Taylor underscores the importance of adjusting strategies to different market phases, capitalizing on downturns and optimizing strong market periods for exits.
- Strategic Syndication: Syndication, as Taylor exemplifies, empowers smaller investors to join larger real estate ventures, pooling capital and expertise for mutual success.
- Value Buying Strategy: Taylor’s approach emphasizes the significance of acquiring properties at favorable prices, reducing reliance on labor-intensive value-add methods and enhancing overall returns.
- Understanding Tax Benefits: Exploring tax incentives, such as the Mills Act for historic properties, can notably impact a property’s performance and elevate investor returns.
- Focus on Long-Term Wealth: Taylor’s preference for partnerships with high-net-worth investors and institutions aligns with a long-term wealth preservation strategy, prioritizing property performance over immediate distributions.
Relevant Episodes: (There are 226 Content Packed Interviews in Total)
- Larry Steinhouse on Buying Houses with NO Money or Credit & Finding Deals Using Real Estate Agents
- 100+ Unit Apartment Syndication with Stephanie Walter
- Passive Investing in Apartment Syndications with Camilla Jeffs
- Real Estate Development with Karl Krauskopf
- Dave Foster on Avoiding Taxes Using 1031 Exchange Real Estate Investing
The transcript of this episode can be found here.
Transcripts of all episodes can be found here.