In the past two years, Mark Weinstein has quietly amassed a small real estate empire.
Apartment buildings in Koreatown and the San Fernando Valley, a mobile home park in Rosamond, garment manufacturing-showroom buildings in downtown Los Angeles and a shopping center in Santa Clarita all are owned by Weinstein. He says he’s invested $80 million in the last two years alone.
“I like being able to chase, figure out and close a deal on my own, as opposed to being directed by someone else to do something,” said Weinstein, president of Santa Monica-based MJW Investments, a property and asset management firm.
The Santa Monica-based investor is but one example of the local real estate entrepreneurs who wheel and deal without drawing much attention.
They’re bigger than mom and pops, but don’t have the name recognition of a Douglas Emmett or a Richard Ziman. But they are actively and collectively investing millions of dollars in local real estate.
“Any highly successful real estate entrepreneur is not sleeping much, is working a lot of hours and loves it,” Weinstein said.
John Kerin, a senior vice president and managing director at brokerage Marcus & Millichap, estimates that 80 percent of the investment activity in L.A. involves transactions under $10 million the kind of terrain in which Weinstein works.
In some cases, the players have gone from passive investors doctors or attorneys, say, who dabbled in real estate on the side to full-time entrepreneurs.
“In the ’80s, they owned their property and worked. You called them at night,” Kerin said. “This is their job now. They got so big in it, they quit their aerospace job and started their own investment company.”
Weinstein, 39, started in the investment business when he was a student at Loyola Law School. He got together several friends in 1982 to buy an apartment building in the Mid-Cities area near Venice Boulevard and Vermont Avenue that they fixed up, rented and sold. Weinstein formed his company, MJW, in 1983 with his sister as his first part-time employee.
He then moved to rehabilitating retail-office properties in Old Town Pasadena “the best bad business decision I ever made.” He learned all about the real estate market everything from the actual construction to getting all the necessary approvals. He eventually sold his interest.
After real estate took a downturn, Weinstein became a receiver for banks with distressed properties. This involved going into tough areas of town and working to increase occupancies and collections so that the bank could sell the properties for more than the loan. He got back into investing two years ago.
Weinstein tries to take advantage of every opportunity to turn around properties. When the Department of Water and Power and other utilities offered free low-flush toilets and energy-efficient light fixtures, he made arrangements to install the new equipment in his apartment buildings. He keeps vacancy rates low and says he has been able to deliver returns of 16 percent to 22 percent to his investors.
“I made a person a millionaire through investing with me,” he said. As he’s closed more deals, he’s also gotten more calls from brokers wanting to sell him properties. A few deals he finds simply by talking to fellow-entrepreneur friends who go to the same gym.
“Based on relationships in the community this is how I find out about deals,” he said.
Other boutique investors and developers also describe the nature of their business as “increasing value” taking a blighted or mismanaged property and turning it around.
“An entrepreneur has to be more than an investor. Plenty of guys are investors,” said Steaven Jones, chairman of Steaven Jones Development Co.
As is typical, Jones subscribes to a buy-and-hold philosophy for the nearly 30 commercial properties he owns. “They’re like annuities,” he said. “If you look at where real estate has gone in L.A., it’s appreciated tremendously.”
Many of the biggest names in local real estate started off small. Jona Goldrich, 71, began investing in real estate here in the late 1950s. Through his Culver City-based company, Goldrich & Kest Industries, he now owns 20,000 apartment units, 38 congregate-care or convalescent facilities and a couple of million square feet each of industrial and office space all over California.
One of his strategies is to invest in properties that are “not that simple,” such as a half-finished project investments that wouldn’t generally entice real estate investment trusts or pension funds. Goldrich said he has considered becoming a REIT, which would make it easier to turn over his business to his heirs. The drawback, he said, is that it would mean losing some control to stockholders which goes against his entrepreneurial bent.