Real Estate Investing News and Advice!

Welcome to your source for real estate investing news, insights, and guidance.

As industry experts, we stay up-to-date with real estate market trends, and actively work to stay ahead of changing market conditions. We’re excited to share our research and analysis with you! With these market insights, and real estate investing tips, you’ll have a competitive advantage over other investors in your local market.

The topics we cover include real estate news, interesting market trends, buying and selling real estate, and managing rental properties. We also share company news from Gatsby Investment, so you’ll have the inside track as Gatsby continues to expand operations.

Want to learn even more? Click the links to view educational articles, press releases, and explainer videos.

Multi-Family Development vs. Multi-Family Rentals

Which is the better investment in today’s market: multi-family development or multi-family rentals?

In reality, one isn’t clearly better than the other; they each have unique benefits. But those benefits can make one or the other a better fit for you.

Plus, there’s a secret third option most investors don’t talk about: Multi-Family Build to Rent.

So, in this post, we’re going to explain the differences in these multi-family investment strategies. We’ll also provide the pros and cons so you can determine which type best serves your goals.

What Is Multi-Family Development?

Multi-family development is constructing a new multi-family structure from the ground up, with the intention of selling the completed development as soon as possible.

The goal of this opportunistic investment is to get in and get out, collecting returns quickly so you can reinvest in a new project and compound your real estate earnings.

What Are Multi-Family Rentals?

Multi-family rentals are long-term holdings of multi-family buildings, where the focus is on passive cash flows generated from rental income.

With this model, investors typically purchase existing multi-family buildings (either turn-key properties that are ready to rent or neglected properties the investor can add value to before renting).

Pros and Cons of Multi-Family Development for Investors

The benefits of multi-family development include:

Shorter investment timeline. Projects are typically completed and sold within 18–24 months, allowing investors to cash out and reinvest in new deals more quickly.
Strong return potential. The construction phase creates significant value, paving the way for stronger annualized rates of return.
No long-term headaches. Once the property is sold, the buyer handles ongoing concerns like maintenance, resident retention, and rent collections.

Possible downsides of multi-family development include:

Potentially higher tax rates. To earn lower long-term capital gains tax rates, properties need to be held in service as a rental for at least 12 months. Selling upon completion of the build means profits are taxed as short-term capital gains, which are typically taxed at the same rates as earned income (higher than long-term capital gains).
Time-sensitive sale. The goal is to sell quickly. This may create a challenge if the property is completed when the market is slow and finding a buyer is difficult.
No ongoing cash flow. Investors don’t hold the property long enough to benefit from recurring rent payments.

Pros and Cons of Multi-Family Rentals for Investors

The benefits of multi-family rentals include:

Tax breaks. Long-term rental investors may qualify for tax benefits like property depreciation and operating expense deductions, which reduce their tax liability. Plus, if the property is held in service as a rental for more than 12 months, the profits from the eventual sale will be taxed at lower long-term capital gains tax rates.
Ongoing rental income. Once the units are occupied, rental income starts flowing. However, mortgage payments, maintenance, and other ownership-related expenses will substantially cut into this income stream.
More selling flexibility. Since the property generates income, there’s less urgency to sell and more time to find the right buyer.

Possible downsides of multi-family rentals include:

Slower value growth. Equity builds gradually through market appreciation and debt paydown rather than the fast forced appreciation of new construction. However, you can speed up equity building by adding value through renovations.
Your investment funds are typically tied up long-term. It could be many years before you can cash out your initial investment to invest it in a new deal.
Ongoing maintenance and management. Older buildings may require more upkeep, and managing multiple units can be a difficult, time-consuming job.

The Best of Both Worlds: Multi-Family Build-to-Rent

With Gatsby Investment’s innovative Multi-Family Build-to-Rent (BTR) model, you can build value like a developer and hold for long-term gains like a rental investor. Without any prior experience or time commitment!

Here’s how Gatsby’s Multi-Family BTR works:

We construct a new building from the ground up. Just like our traditional developments, we force appreciation to create fast equity for investors.
We hold the property as a rental for at least 12 months. This allows the profits from the eventual sale to qualify for favorable long-term capital gains tax rates.
We manage the operations while sharing the rental income. You don’t have to worry about finding renters, collecting rent, or addressing maintenance requests. Our team does it all for you while still giving you your share of the rental income.
We have flexibility in selling the property. Since the property generates income, we don’t have to sell. If market conditions happen to be slow, we can wait until there are more buyers willing to pay higher prices.
We sell the property and disburse profits to investors. When the time is right, we sell the property and give you your share of the profits (which, again, are taxed at lower capital gains rates).

This hybrid multi-family BTR model is perfect for investors who:

Want to maximize gains through development,
Prefer lower taxes through long-term capital gains,
Don’t necessarily need monthly cash flow to live on but want strong after-tax returns, and
Appreciate a strategic exit rather than a rushed one.

Does this sound like the right fit for you?

Learn more about Gatsby’s Multi-Family Build-to-Rent investment opportunities and choose your next real estate investment today!

Why Does Gatsby Only Focus on the Los Angeles Market?

We often have investors asking us about branching out into other markets. Can Gatsby expand into Las Vegas, so I can invest there? Will Gatsby go bi-coastal and start buying property in New York? Is Gatsby getting into the vacation rental market in Florida?

While we won’t rule anything out, the fact is that Gatsby is deeply ingrained in the Los Angeles residential market. And at this time, we don’t have specific plans for expanding beyond LA. There are a million smaller reasons why the City of Angeles is our focus, but today, we want to share the BIG REASONS.

Here are the top three reasons why Gatsby only focuses on the Los Angeles market.

Los Angeles Housing is Consistently In-Demand

Do you remember the overblown “California Exodus” of the COVID era (the “event” hyped as Californians leaving the state in droves, while we actually lost fewer than 1%, most of which we’ve already regained)? Well, that didn’t really apply in Los Angeles. Even as headlines claimed thousands of households were leaving the city for more affordable rural communities, LA remained in high demand. LA lost less than .1% (yes, point one), which was immediately recovered within a year. And now, population projections are trending straight up.

Between the weather, job opportunities, beaches, recreation, community, diversity, history, and beauty of the city, this is where people want to live. As long as we can provide more housing (which of course, Gatsby is working on!), people will continue moving to LA.

Our Expertise and Network are LA-Based

Too many syndication companies expand into unknown markets, risking their investor’s profits on their learning curve. Gatsby has no intention of doing that.

We have spent decades learning the nuances of the Los Angeles housing market. Our local knowledge of demographics, building requirements, and market trends allows us to get ahead of market shifts and meet changing demand.

We’ve also spent many years developing meaningful connections with industry insiders who reduce our costs and increase our investor’s returns. From the real estate agents who help us find off-market deals to the mortgage lenders who provide favorable financing to the contractors who give us bulk rate pricing, every partner in our intricate system plays a role in serving our investors.

Before we could expand into another market, we would need to spend years learning the ins and outs of that market and establishing mutually beneficial relationships with local companies.

LA Offers Ample Growth Opportunities

Finally, Gatsby is focused on LA because the ever-evolving market continues to provide unique opportunities for growth.

When Gatsby started, home flips were big business. We could buy neglected houses at a low cost, rehab them, and resell them for substantial profits. As the need for accessory dwelling units (ADUs) increased, we added ADU builds to our flips for increased returns. But then, with rising home prices, lack of inventory, changing zoning laws, and greater demand for multi-family, we shifted to focus on multi-family developments to maintain the high rates of return our investors have come to expect.

This dynamic market is always changing, and since we know how to shift with those changes, we will never run out of opportunities here!

Gatsby is at Home in LA

We’re proud to be part of the fabric of Los Angeles and aim to improve our local community while providing strong returns for investors. In addition to adding housing inventory through new development, Gatsby recently launched built-for-you development programs to help local homeowners rebuild after losing their homes in the devastating wildfires. And our founder and CEO, Dan Gatsby, founded the Los Angeles Builder’s Association in 2024 to promote sustainable building practices in LA and foster industry collaboration.

As far as we’re concerned, Los Angeles is the greatest city in the world, and there’s nowhere we’d rather be!

Are We in a Buyer’s Market or Seller’s Market Right Now?

The real estate market is constantly shifting between a buyer’s market and a seller’s market, influenced by factors such as housing supply, interest rates, and economic conditions.

These shifts are a natural part of the real estate cycle, a recurring pattern of expansion, peak, contraction, and recovery that affects investor opportunities. Understanding current market conditions and knowing where we are in the real estate cycle is crucial for making informed decisions, whether you’re purchasing a home, selling a property, or investing in real estate.

Right now, buyers and sellers alike are asking: Are we in a buyer’s market or a seller’s market?

Here’s a quick and concise look at the characteristics of buyer’s markets vs. seller’s markets, and how we know which market conditions are dominating the US now.

What is a Buyer’s Market?

A buyer’s market occurs when there are more homes for sale than there are buyers. You’ll typically see:

More homes available for sale
Lower home prices
Homes taking longer to sell

This economic climate gives buyers an advantage in negotiations. In this type of market, sellers may need to lower prices, offer incentives, or be more flexible with terms to attract buyers.

What is a Seller’s Market?

A seller’s market occurs when there are more buyers than available homes. You’ll typically see:

Fewer homes available for sale
Rising home prices
Quicker sales

This gives sellers the upper hand in negotiations. In this type of market, buyers may face bidding wars or need to make competitive offers to secure a property.

Are We in a Buyer’s Market or Seller’s Market Right Now?

As of 2024 year-end, the US as a whole is still in a seller’s market, as evidenced by the following:

We currently have three months of housing supply, meaning it would take only three months to sell the entire inventory. For reference, a balanced market holds at least five months of supply.
The median sales price is up 6.1% year-over-year.

However, we’re seeing signs of the market balancing:

Homes listed for sale have increased by 12.2% year-over-year.
Home prices are not rising as steeply.
Homes are starting to take longer to sell.

However, real estate is a local industry, so market conditions can vary from one neighborhood to the next.

Why It’s Important to Invest Regardless of Buyer’s Market vs. Seller’s Market

Real estate investors need to remember that there are deals to be found under any market conditions.

A buyer's market is a great time to expand your real estate portfolio by using lower buyer competition to control negotiations and buy properties at a discount.

A seller’s market is a good time to develop new units to meet the increasing buyer demand.

Plus, when you have local networks of industry insiders and efficient workflow systems in place, you can reduce costs while increasing return potential whether you’re in a buyer’s market or seller’s market. That’s why it’s always the right time to invest in real estate with Gatsby Investment!

How Long Will It Take to Rebuild After the LA Wildfires?

In the wake of the most devastating wildfire season Los Angeles has ever experienced, at least 11,100 residential units have been destroyed, displacing tens of thousands of Angelinos.

The goal, of course, is to help these families rebuild as quickly as possible. But the reality of rebuilding on this scale is complicated. So how long will it take to rebuild after the LA wildfires?

As experienced real estate developers who have operated in the LA market for a decade, we’re going to try to answer that difficult question for you.

How Long Will It Take to Rebuild After the LA Wildfires?

Let’s consider the timeline in steps.

Step 1: Debris Removal and Environmental Testing - Estimated Timeline: 18-24 Months

Before we can rebuild, we need to clear the debris.

Unfortunately, this is a more challenging task than you may think. The amount of hazardous materials released in the burn zones is overwhelming. Asbestos, lead, and toxic ash all require specialized handling to avoid further contamination, particularly where water sources are concerned. This means the cleanup must be slow and methodic.

The good news is that the community and the government are springing into action. State and federal agencies began the process of debris removal on February 11, just 35 days after the fires started. For comparison, this is about half the time it took to initialize similar operations after the 2018 Woolsey Fire.

The bad news is that this process takes time. Even if the initial emergency cleanup can be completed in just 6-12 months, environmental engineers will need time to test the soil to confirm that it’s free from toxic contaminants and safe to build on.

Depending on the extent of the damage, it could take 18-24 months to clear the area for redevelopment.

Step 2: Infrastructure Rebuilding - Estimated Timeline: 1-3 Years

Restoring the infrastructure means rebuilding roads, sidewalks, and bridges, but it also means rebuilding the systems that bring utilities (electricity, internet, water, gas, sewer, etc.) to the affected neighborhoods. Additionally, it means reestablishing necessary local amenities such as schools, fire stations, hospitals, and police stations.

This is a massive undertaking, requiring many skilled workers and ample materials. Unfortunately, the current presidential administration’s policies could make it difficult to access and afford the labor and materials needed.

The President has stated intentions of mass deportation and tariffs with trading partners.

With over 40% of LA’s construction workforce being foreign-born, there is legitimate concern about their status in America. Even those who are legal residents have no guarantee of having their residency permits renewed. And those who are trying to navigate the path to legal residency and citizenship face excessive wait times and fees. Mass deportations would reduce the labor force, impacting the timeline to rebuild and causing costs to skyrocket.

Furthermore, the threats of tariffs and trade wars have already strained relationships with critical trading partners for the construction industry. Tariffs will make materials and supplies more expensive and less available, again resulting in delays and higher costs.

With the current workforce and global supply chains, this work could take 1-3 years. Without access to our current labor force and/or suppliers, the timeline could easily double.

Step 3: Permitting - Estimated Timeline: 6-24 Months

The LA permit office generally operates with a substantial backlog. This means it can take 6-12 months to get a permit under normal market conditions.

Following the wildfires, we’re expecting some conflicting changes in permitting. First, building codes may change to make structures more fire-resistant. This can increase the checklist and time for permitting. However, the department may hire more workers in anticipation of the increase in permit applications, which can speed things up. Furthermore, the current administration claims to prioritize removing regulatory burdens for homebuilders, which could remove some barriers and allow for faster processing.

Step 4: Residential and Commercial Rebuilding - Estimated Timeline 3-10 Years

Based on the prior steps, it will be years before we can begin rebuilding homes and businesses. Once the construction begins, the timeframe will depend on the availability of labor, materials, and supplies.

Building one house can take 12-24 months. But when we have over 10,000 homes in the queue, it’s going to take longer. Especially because we can’t afford to pause the normal rate of construction outside the burn areas. In 2023 alone, Los Angeles had an estimated housing shortage of 337,000 units. Prior to the fires, homebuilders were already preparing to increase residential construction in LA. And the need for housing can’t wait.

Step 5: Economic and Community Recovery - Estimated Timeline 5-10 Years

With the physical rebuilding complete, it will still take time for businesses to reopen, attracting workers and residents back at pre-2025 levels. The areas aren’t fully recovered until the communities have been restored.

Summary of How Long Will It Take to Rebuild After the LA Wildfires

All told, we’re looking at 16.5 to 27 years for a full physical and economic recovery for the neighborhoods affected by the LA wildfires. If political policies reduce the local workforce or availability of supplies, we could be looking at closer to 40 years.

How Gatsby Investment is Supporting the LA Community

Gatsby remains committed to developing in-demand housing throughout Los Angeles. Our goal is to balance attainable housing for Angelinos with strong return potential for our investors.

Dan Gatsby, founder and CEO of Gatsby Investment, founded the Los Angeles Builder’s Association in 2024 to promote sustainable building practices in LA and foster industry collaboration to make development more efficient. Dan and the Gatsby team will continue to support local builders, developers, architects, designers, and contractors as we work together to restore and improve Los Angeles.

Gatsby’s Investment Strategy for 2025

With interest rates projected to decline throughout 2025, we expect to see the housing market pick up a bit this year.

The rate declines are good for buyers and investors looking to increase purchase power, while also incentivizing property owners to sell (knowing that they won’t take such a big hit from trading a low-interest mortgage for one with a much higher rate).

So what is Gatsby’s plan to capitalize on lower rates and provide strong return potential for investors? Here’s a sneak peek at Gatsby’s investment strategy for 2025.

Increase Housing Inventory

The Southern California housing shortage continues to be problematic for locals and for those who want to relocate to the area. As of May 2024, experts estimated that Los Angeles County alone needed nearly 500,000 units to accommodate the population, with specific emphasis on attainable housing for low-income households.

Of course this was before this month’s wildfires, which devastated families and communities across the area and destroyed more than 1,400 residential structures, resulting in a greater strain on current housing inventory.

While a lack of inventory tends to drive property values up, Angelinos don’t want to see home prices artificially inflated by purposely withholding inventory. Rather than creating a real estate bubble that could burst, we’re looking to build sustainable growth that balances housing attainability with strong returns.

That’s why Gatsby is committed to developing new housing units.

Multi-Family Developments

Multi-family developments are in high demand by renters who have been priced out of the housing market or prefer the simplicity and flexibility of renting over owning. These buildings are also in high demand by investors willing to pay top dollar for new-construction apartments already stabilized with new tenants.

Having completed dozens of developments in Los Angeles, Gatsby has the systems and teams in place to build these structures quickly and efficiently. The comparatively short build periods help us bring new units to the community while providing fast returns for investors.

Built-for-You

Our new built-for-you product provides a unique opportunity for investors to venture into multi-family real estate development without the time, hassle, and risk of traditional private development.

With our built-for-you program, we manage the acquisition and construction of your new development while you retain full ownership rights. When construction is complete and the building is fully occupied by new tenants, you can take over the day-to-day management of the stabilized property. Or we can match you with a well-regarded property management team to provide this service for you.

You get the benefits of a brand-new rental property without the high price tag of buying a new construction turn-key apartment building. No experience, specialty knowledge, or industry connections needed on your end! We take care of everything.

Together, we can bring new units to the market with this innovative investment structure.

Develop Affordable and Attainable Housing Solutions

There is a particularly high need for affordable and attainable housing in Los Angeles. Affordable housing means the monthly housing payment (including principal, interest, insurance, taxes, and utilities) equals no more than 30% of the gross household income. Attainable housing is defined as a residence that is affordable enough to be purchased by individuals and households earning between 70% and 100% of the local median household income (as established by the U.S. Census Bureau).

There are multiple ways to meet this growing need while maintaining strong yield potential for investors.

Section 8 Housing

Section 8 is a government-sponsored affordable housing program, designed to help low-income renters cover their housing costs. This program provides much-needed benefits for veterans, senior citizens, struggling families, and the differently-abled.

Because of the arduous application process for recipients of Section 8 vouchers, these tenants are often reliable and tend to remain in the unit for the long term, reducing turnover and minimizing vacancy losses for investors.

Tenancy in Common

Tenancy in common (TIC) is a type of real estate ownership where multiple individuals hold legal rights to the same property. Each co-owner possesses an "undivided" interest, meaning they share ownership of the entire property rather than specific sections, with their ownership percentage representing their proportional stake in the property.

TIC ownership is more affordable than single-family or condo ownership, providing a new path for homebuyers looking for attainable housing solutions.

And with our experience building multi-family structures, Gatsby already has the workforce and systems needed to develop TIC projects!

How to Invest with Gatsby in 2025

Gatsby’s investment opportunities are open to all accredited investors. You can explore our available real estate offerings and choose the project(s) that best align with your timeline and investment goals.

If you have any questions, our dedicated service reps are happy to assist you. Schedule a call with a Gatsby representative today!

Introducing Built-for-You Developments

Have you ever wanted to be a real estate developer? But maybe you don’t have the time or experience to develop a new property from start to finish on your own…

Gatsby Investment’s new built-for-you development offering gives you the satisfaction and financial benefit of being a real estate developer without the hassle of being a developer!

What is a Built-for-You Development?

Gatsby’s built-for-you projects are developments that you own and control while Gatsby does all the work on your behalf.

We manage the entire acquisition and construction process for you while you retain full ownership. When the development is completed, tenants are moved in, and the property is stabilized, we step back, turning the completed, fully occupied property over to you.

This unique opportunity allows real estate investors to enjoy the benefits of brand-new rental developments without the high price of purchasing a newly built stabilized property. You don’t need to invest any time or energy in the development. Nor do you need any prior experience, skill, specialty knowledge, or industry connections. We bring all of that to the project for you!

How Does Built-for-You Work?

Gatsby handles every detail of the project, giving you a fully passive investment experience throughout the development and stabilization of the property.

Here’s how we handle the heavy lifting:

Strategic property acquisition. We identify prime multi-family development sites, whether raw land or underutilized lots with teardown potential.

Comprehensive due diligence. Our team analyzes market data, including sales and rental comps, to ensure strong investment potential.

Seamless ownership setup. We establish the LLC, draft legal agreements, and manage all necessary documentation.

Expert design and permitting. From architectural plans to securing permits, we ensure compliance with local building codes and regulations.

Efficient construction financing. We assist with securing a construction loan by preparing all necessary financial documents.

Project oversight from start to finish. Our team manages the construction process, ensuring quality, efficiency, and cost control.

Financial management. We handle fund control, construction draws, and project accounting to keep everything running smoothly.

Property stabilization. Once built, we market the property, screen tenants, and lease-up units to ensure full occupancy.

Long-term financing support. When the project is complete, we help you secure a mortgage for long-term ownership.

The entire process typically takes only 18-24 months, depending on the scale of the project.

What are the Benefits of Built-for-You?

With Gatsby’s built-for-you model, you get all the benefits of developing and owning a high-performing multi-family rental property, including:

A lower purchase price. Leverage our network of real estate insiders to find off-market deals, which can typically be bought at a discount.

Maximized property value. Ground-up construction allows you to add value at every stage, from land acquisition to completion.

Superior ROI potential. Developing a property yields higher returns than purchasing turn-key, and our expertise and industry connections help you secure discounted rates on labor, materials, and real estate fees to optimize your returns.

Favorable loan terms. Our relationships with local lenders can earn you lower interest rates.

Exclusive ownership. You retain 100% control over your asset, without splitting equity or decision-making with other investors.

A favorable property tax basis. Newly developed property’s taxes are based on the purchase price plus construction costs. This results in lower annual property taxes than purchasing an existing property at a higher cost.

Expert oversight from start to finish. Our team navigates every challenge, ensuring a smooth and successful development process.

Completely hands-off investment. We oversee every step of the development process, so you can focus on other priorities while your property is being built.

Who Can Invest in Built-for-You?

Our built-for-you developments are exclusively available to individuals and corporations that meet specific financial and legal criteria. To participate, you must:

Be an accredited investor. In accordance with SEC regulations, investors must meet specific net worth or income thresholds to qualify as accredited investors before partnering with Gatsby in a built-for-you development.

Provide proof of funds. You’ll need to demonstrate sufficient capital to cover the full investment amount, ensuring the project is fully funded.

Qualify for long-term financing. After construction is complete, you must secure a mortgage to finalize ownership and transition into long-term holding.

How to Invest in a Built-for-You Project

We believe in full transparency and simplicity when it comes to investing. Every essential detail is readily available on our website, giving you the confidence to make informed decisions.

Before committing, you’ll have access to comprehensive project insights, including:

Property details: Address, building plans, and unit specifications
Timeline: A complete development schedule
Financial breakdown: Estimated costs, projected returns, and market comparables

Once you’ve completed the qualification process and selected a project, placing your investment is simple. Our website guides you step by step, ensuring a seamless and hassle-free experience.

Have any questions about built-for-you developments? Schedule a call with a Gatsby representative today to discuss your investment goals and how we can help you achieve them!

How Gatsby is Managing Investments and Supporting the Community During the LA Wildfires

As the wildfires continue to devastate Los Angeles County, we at Gatsby want to address the questions we’ve received regarding the status of our active investment projects as well as future projects in Los Angeles.

We understand this is a time of uncertainty, and we want to provide as much information and clarity as possible.

To that end, here are the answers to some of your most pressing questions about how Gatsby is managing investments and supporting the community during the LA wildfires.

1. Are any of Gatsby’s projects impacted by the fires?

None of Gatsby’s properties have been impacted by the current wildfires, and at this time, none are in high-risk zones. Our team will continue to monitor the situation and keep you informed of any developments.

2. How will the current wildfires affect Gatsby’s projects?

The fires have reduced housing inventory in a market already facing a serious housing shortage. Fortunately, Gatsby has spent the last few years adding large multi-family units to the housing market, putting us in a strong position to help meet the urgent demand for family-friendly housing. We have already received numerous inquiries from individuals and families actively seeking housing, and we are helping to match them to suitable accommodations.

3. Is the availability of construction materials affected?

At this time, we do not expect the current wildfires to impact the availability of construction materials for our active projects. However, the recovery from this devastation will likely take years to complete as those affected go through a multi-stage rebuilding process. The first priority, of course, is to contain the current fires. Then locals can begin clearing and cleaning, rebuilding infrastructure, and preparing for reconstruction.

So, while we do not anticipate immediate supply chain disruptions, we will continue to monitor evolving conditions during the recovery and be prepared to address any potential challenges as they arise.

4. How are Gatsby’s properties protected against fire?

All of our properties are covered by robust insurance policies, including:

Builder's Risk Insurance. We carry builder's risk insurance with fire coverage up to the total cost of construction on all developments. This policy would reimburse us for costs based on the construction progress at the time of the loss, ensuring our expenses would be covered.

Landlord Policies for Built and Rented Properties. Completed and rented properties are protected by landlord insurance. This includes replacement cost coverage to restore the property to its original condition and covers loss of rental income during the rebuilding process.

5. What happens if a fire impacts a property?

In the unfortunate event of a fire affecting a property, our insurance policies are designed to minimize any financial impacts. In this case, we would reevaluate the project following the fire to determine the most fiscally responsible path forward, keeping investors in the loop at every stage.

6. How is Gatsby supporting the community during the wildfires?

Gatsby has a long-standing commitment to developing more LA-area dwelling units to help alleviate the pressure of the housing shortage. Since 2016, we have added over 100 units to the local housing supply by building ADUs (additional dwelling units) during single-family flips and converting single-family lots into multi-family buildings with 4-10 units each. As residents displaced by the fires look for temporary housing, we are proud to support them in finding comfortable, well-designed accommodations from which to rebuild their lives.

7. What will the long-term impact of the fires be on the LA housing market?

The devastating wildfires in Los Angeles have not only caused immense personal loss but have also further strained an already tight housing market. With lower inventory levels, the destruction of homes will likely increase local demand.

While this dynamic may contribute to rising property values, our focus remains on sustainable, long-term growth that balances strong investor returns with the need for attainable housing. A resilient market benefits from a thoughtful investment strategy that supports rebuilding efforts, strengthens communities, and ensures that Los Angeles remains a place where people can live, work, and thrive.

Gatsby’s Year in Review: Strategies and Results for 2024

As we close out 2024, this is the perfect time to reflect on the year in real estate - a year filled with challenges, opportunities, and significant milestones for Gatsby and our investors.

We want to let you in behind the scenes by sharing our 2024 review with you!

Here is a transparent look at the difficulties we faced, the strategies we employed, and the results we achieved. We’ll also share how we’re positioning ourselves for an even more successful 2025.

2024: A Shifting Market with New Challenges

Real estate is never static or boring! The market is always shifting and creating new challenges and opportunities. Rising interest rates earlier in 2024 slowed the pace of transactions, resulting in fewer deals and longer sales timelines.

Furthermore, regulatory and procedural changes slowed down development timelines:

Permit Delays: Increased bureaucratic inefficiencies are causing projects that once took three months to approve to take closer to six months in 2024.

All-Electric Building Mandates: While we are in favor of sustainable building practices, new AMP and Green Building Code requirements added complexity to developments in 2024. These regulations, which push for all-electric buildings, increased costs, reduced design flexibility, and delayed completion timelines. For example, upgrading electrical systems from 400 amps to 600 amps for smaller projects (6 units or fewer) became a time-intensive process requiring lots of back-and-forth with the Department of Water and Power (DWP).

Election Uncertainty: The presidential election temporarily stalled the market, as buyers and sellers hesitated to make decisions without clarity on the upcoming political and economic landscape.

This slower market made our once lucrative house-flipping projects less attractive. Luckily, our ability to adapt to market dynamics ensured that we stayed ahead of the curve. We focused on what we do best: multi-family developments (built-to-sell)! And we quickly pivoted from house flips to Tenancy-in-Common (TIC) projects which create attainable housing solutions for moderate-income households.

Turning Challenges into Opportunities

We answered 2024’s challenges by leveraging solid opportunities where they could be found. Thanks to our deep industry connections and established relationships with real estate agents and brokers, we were able to locate rare high-quality deals. In this landscape where the best lots generate fierce competition from multiple buyers, Gatsby often secured deals before these lots were even listed on the market!

This competitive edge comes from years of trust-building and a reputation as a reliable, results-driven developer in the Los Angeles market.

2024 Performance Results

Gatsby once again delivered strong results for our investors despite the slow 2024 market conditions! We are proud to close 2024 with an average annualized return of 15.30% bringing our company-wide average return from 2016 to 2024 to 22.04%.

Gatsby’s Competitive Advantage

Our 2024 performance is a testament to our data-driven approach and unwavering commitment to maximizing value, even in a complex market. We attribute much of our success to these enduring strengths:

Industry connections. Our network of agents, brokers, and bankers gives us access to deals that others can’t match.

Specialized expertise. Gatsby’s team is uniquely equipped to navigate the complexities of the LA market, ensuring lower risk and higher returns.

A resilient market. Los Angeles real estate has its ups and downs, but its long-term strength and value remain unmatched.

Looking Ahead: Gatsby’s Focus in 2025

The year ahead promises exciting developments as we continue to evolve and expand our offerings. Here’s what we’re focused on for 2025:

Multi-Family Developments (Build-to-Sell). We remain committed to this flagship product line, which has consistently delivered strong returns and aligns with Gatsby’s expertise. It is our privilege to develop high-quality buildings that help ease the housing shortage in Los Angeles.
TIC Projects. While these opportunities are more limited due to specific property requirements, we will continue to pursue select TIC projects that meet our high standards.
New Product Line: Multi-Family Build-to-Rent. This highly requested model allows investors to participate in both the equity-building phase of development and the long-term rental-holding phase. Benefits include lower tax rates, passive income, and long-term property appreciation, making this an ideal option for investors seeking to grow their portfolios over time.
Exclusive Offering: Built-for-You Developments. For investors seeking 100% ownership, this model provides full control of a multi-family property after the property is built. Gatsby manages the entire ground-up development process, ensuring the experience is completely passive for you. This opportunity is best suited for vetted real estate investors with an established rental portfolio, offering a seamless way to expand your holdings.

Leverage Gatsby’s Strategies for Your Portfolio in 2025!

As we look ahead to 2025, we encourage you to consider diversifying your portfolio with real estate syndication. By investing with Gatsby Investment, you get to leverage the knowledge and strategies of an experienced real estate investment company with a solid track record of strong returns. Plus, Gatsby’s innovative investment models, ranging from multi-family developments to TICs and custom ownership opportunities, offer something for every investor.

Let’s make 2025 the year you explore new opportunities in real estate!

Have questions? Schedule a call with a Gatsby representative today to discuss your investment goals and how we can help you achieve them.

The Benefits of Being a Buyer’s Agent

The 2024 NAR settlement has caused some real estate agents to question whether or not it’s worth working with buyers.

Negotiating your own fees upfront and getting a signed representation agreement before showing properties adds hurdles to the buyer’s agent role.

But before refusing to accept new buyer clients, consider some of the benefits of being a buyer’s agent! Here are the top five…

1. Repeat Business Potential

Yes, any agent can generate repeat business from clients buying and selling multiple properties. But a first-time buyer’s agent gets in on the ground floor.

When you represent a first-time buyer, you build trust, perhaps as the only industry expert the buyer knows. Maintain that relationship, and they’ll be highly likely to choose you as their listing agent when they’re ready to sell their starter home plus their buyer’s agent as they search for their step-up home. You might even represent them in investment property purchases, or help their children buy their first homes!

Plus, as the trusted agent for the buyers, you’re the only agent they will recommend when friends and family are looking for a referral to a strong buyer’s agent.

2. Easier Point of Entry into the Industry

Most agents start their real estate careers working with buyers.

Sellers are more likely to either choose the agent who helped them purchase the house or interview multiple candidates to see who they think can find them the most qualified buyers and negotiate the best deal. Buyers are less likely to interview multiple agents, giving new agents a greater chance of securing their business.

Working with buyers also provides great exposure to the market for new agents. Unlike listing agents, who focus on their sellers’ properties, you get to experience multiple properties for every buyer client you have. This builds your knowledge base about your local market, helping you understand what buyers look for, how much they’re willing to pay, and what kind of concessions they expect.

3. Lower Marketing Costs

There are always marketing costs associated with being a real estate agent. You have to market yourself strategically so buyers and sellers can find you.

As a buyer’s agent, you can market yourself inexpensively with a website, social media channels, and digital newsletters to your email list.

But sellers have to market themselves and their listings. Seller’s agents pay for signage, listing advertisements, photography, videography, 3D imaging, brochures, flyers, and open house refreshments. Of course, the expectation is that the commission on the sale will compensate for all of that, but paying these expenses before you earn a commission can cause cash-flow issues.

4. Less Competition as Fair-Weather Buyer’s Agents Shift or Exit

Many established buyer’s agents are unwilling to adapt to the post-NAR settlement industry. They don’t want to have to negotiate their own compensation or be required to secure a signature on a representation agreement before showing property. So they’re shifting focus to listings. Or leaving the industry entirely.

This is great news for the agents who are willing to adapt to the new standards. You’ll have less competition from other buyer’s agents, increasing your chances of landing new business.

5. Greater Job Satisfaction

Sure, helping a homeowner sell their house so they can move on to their next chapter is fulfilling work. But it can also be a little sad. People often sell because of divorce, death, or inability to remain in the home.

Helping buyers, on the other hand, is nearly always a happy occasion - especially when you’re able to help first-timers become homeowners. You know you’re helping people find the houses that they’ll make into homes. And, in most cases, you’re setting them on the path to financial stability by helping them secure an asset with appreciation potential.

Bring Your Buyers to Gatsby Investment - Or Help Us Find Our Next Deal!

Gatsby Investment is a real estate investment company that regularly purchases, renovates, and sells properties in the Los Angeles area. We’re always looking to partner with real estate agents and brokers for mutually beneficial deals.

If you know of any property that meets our criteria for acquisition, please submit the property for consideration. Similarly, if you have any buyers, particularly investors looking for small multi-family structures, please explore our properties for sale. You can even view pre-market properties, so you can give your buyers an early look at properties under construction.

Buyer’s agents play a critical role in the real estate industry, and no NAR settlement is going to change that! The settlement may have created a few additional challenges, but with so many benefits of being a buyer’s agent, it’s worth the extra effort!

Navigating the Market Shift: The Path to Normalcy After Interest Rates Drop to 5.5%

With some real estate experts predicting mortgage interest rates of 5.5% or lower in 2025, we wanted to look ahead to how the market will likely react to such a drop.

Rates at this level would likely usher in the new normal. Long gone are the days of 3% mortgage rates. But with inflation slowing, we no longer need the 7.5%+ rates we saw in 2023.

So how do we navigate this shift to the new normal? Here’s what we expect to see as mortgage rates decline toward 5.5%.

1. A Surge in Refinancing

Property owners who got locked into higher rates by purchasing in late 2022 through early 2024 are just waiting for rates to drop so they can refinance to a lower rate. This wave of refinancing could give the entire economy a boost by reducing mortgage payments and giving owners more disposable income to spend elsewhere.

Prepayment Penalties, Closing Costs, and Refinancing Decisions

Of course, refinancing only makes sense when the interest savings more than offset the costs associated with originating the new loan, plus any prepayment penalties on the existing loan.

To calculate the breakeven point of a refinance, divide the total refinancing cost (including any prepayment penalty) by the monthly mortgage payment savings. This will tell you how many months it will take for the savings to exceed the expense. You’ll need to hold the property under the new mortgage for at least that long to benefit from a refi.

2. Alignment of Rent and Interest Rates

With rates falling, landlords and investors may need to adjust rental prices to reflect the lower borrowing costs.

In many cases, when interest rates fall, homeownership becomes more accessible, so more people buy and fewer people rent. However, in high-value markets like Los Angeles, so little of the population can afford to buy that renter demand continues to be high.

The alignment process should be considered before acquiring or selling properties. If rents decrease to reflect lower interest rates, it might make sense to hold the property for a lease cycle or two until rental agreements can be signed with higher rental rates to encourage buyers to pay more for the investment property.

3. The Golden Handcuffs Come Off

Many property owners who purchased their assets between 2012 and early 2022 have the fortunate problem of being locked into sub-5% interest rates. Someone who locked in a 3% rate in 2020 (through a new purchase or refinance) hasn’t wanted to sell their primary residence despite strong appreciation and corresponding equity increases in most markets. These owners know that selling means giving up that rate and accepting a much higher rate on the purchase of a replacement property.

Economists call this problem golden handcuffs, alluding to the fact that owners are trapped by something of value.

But as rates drop, the financial impact of giving up an old mortgage to take on a new one isn’t as severe. This means more owners may be willing to sell, which is good news for buyers who have been struggling with low inventory for years.

Navigate the Shifting Market with Gatsby Investment

Real estate markets are always changing, but they rarely do so instantaneously. It could take 6-12 months for the full effects of this new normal to be felt. During this transition period, we will see gradual changes in refinancing, rental prices, and new listings.

Gatsby Investment diligently monitors the market to stay ahead of changing conditions for our investors. Whether rates are rising, falling, or stabilizing, we are continually tweaking our strategy to take advantage of the current economic climate.

Leverage our market expertise for your real estate portfolio. Explore our available investment opportunities and let us take care of the details for you!

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Gatsby Investment’s Track Record

Since our founding in 2016, Gatsby Investment has successfully acquired over 85 properties as of February 1, 2025. We proudly maintain a 100% profitable track record, with no losses on any deal to date. View completed deals

19k+

Registered members on the platform

22%

Average annualized net return to investors from 2016–2024

Successfully acquired deals