What We Got Right: Lessons from Adaptive Realty 2012-Present

1. Choosing Los Angeles multifamily. When people ask me how we chose multifamily in LA, they're often surprised by the answer: Dumb luck. If we had chosen hotels or retail, you wouldn't be reading this.

2. Our game plan for adding value works. We have a playbook we've been developing since 2008. The basics have worked from the beginning, and we've added new plays continuously since then.

3. Great partner match. Jon is scrappy, energetic, demanding. I'm a bit more cerebral, "big picture", and willing to overlook mistakes if I think someone is growing. Makes for great balance.

4. One decision-maker (me). We're ~50/50 economically, but I've always been the sole decision-maker. I have rarely had to pull rank. But the fact that I could means strategic disagreements don't fester.

5. Spectacular first employee. Again, luck. Wrote a good job post. Tons of applicants, whittled them down to 2 whom we thought were great. Picked 1 on basis of a recommendation from our CPA. She turned out to be amazing... and set culture for everyone who followed.

6. North Star... but flexible about how to get there. We knew we wanted to build a large portfolio of apts and hold forever. To eat while starting to build that portfolio, we hustled: brokered, consulted, did fee deals, built a mgmt co. Whatever it took.

7. Bc of permanent hold, we have been able to plan for the slow, steady growth of the team, with prop management fees providing steady, recurring revenue. Alternative would have been to grow or shrink dep. on whether we were buying or selling.

8. Saying "Yes" to capital. Our second large step up in AUM came from accepting a non-traditional structure. In retrospect, we were under-compensated... but doing those deals took us from a fragile little org to one with staying power.

9. Put clients / LPs first. It was so hard for us to raise capital / get management & brokerage clients in the beginning that we had no choice but to treat them like gold. Can't emphasize enough how important embedding this ethos in the org has been for us.

10. Saying "No" to capital at the GP level. We have been offered a lot of money (to us) at various times for stakes in the GP business. It was pretty painful to say "no" when we were broke. But we did, and now we own the whole thing.

/fin