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Thursday, Sep 21, 2023

Cold Caller

Michael Koshet, 33, is a self-described hustler. As a kid in Skid Row, he hustled food and shelter for himself and his mother. As a teenage business owner, he hustled to resell cell phone products with a $10 markup. He also hustled – albeit briefly – as a pot dealer. Once full-time in the working world, he hustled as a real estate broker leasing thousands of homes, condos and apartments to renters, including rapper Puff Daddy, or Sean Combs. Now, he hustles to connect apartment building sellers with not-too-picky buyers. Koshet spoke with the Business Journal at his Encino office within KW Commercial about how his hustle helps him thrive at focusing on off-market deals, or apartments for sale by the owner. Question: What about brokering off-market apartment deals appeals to your personality? Is it instant gratification? Answer: 100 percent. I’m a dealmaker. I love the excitement of putting together a deal that doesn’t span 30 or 60 days. Making the impossible possible – something out of nothing. It’s exhilarating for me. Why do buyers purchase buildings off market? Buyers will pay more just to get a deal no one knows about. They don’t want to bid. They’ll pay more for the deal no one else had access to. Once you find an apartment building you want to sell, what happens? I study the comps (comparables of similar sales nearby), I see if the owners have actively sold anything. Then I ask them (the owner), ‘Do you have a price?” Then, if they give me a price, I bring it to the right buyer. I usually only have one shot at bringing it to the right buyer. It’s hit or miss. How about finding clients in the first place? There are people who reach out to us and give us addresses, and say we would sell this at this price. There is a deal in Koreatown, closed recently, for about $5 million and the owner reached out to me and said, ‘Here’s the address; this is the price we want, make it happen. I’m giving you a shot at it.’ We accomplished it. I just happen to know the guy who owns (the building) directly next door. So, I sold it to him. There are people I know that will buy a building and be open to selling it a year later if they can make $1 million. How much commission do you take? There are some deals I’m very flexible on that – fees, commissions. I’d rather do 20 deals in a year and make a little here, and a little there, and get two homeruns rather than do four deals in a year and two of them are home runs. What in your childhood prepared you for this career? They (my parents) were married up until I was 7. When I was 9, my mom went homeless. I spent time looking for her and found her (on Skid Row, in downtown Los Angeles) waiting in a line for lunch, and I stayed with her on and off. After three months, I was able to get her a room (in the Hayward Hotel) for $60. And I slept on the floor when I stayed with her. How did that affect your personality and what you do today? It makes you tough. I think a lot of my hustle – because I witnessed that – it has a lot to do with that. If you want food, clothes, roof, gas – you need to hustle. Title: Managing Director Company: LA Commercial, a division of KW Commercial Born: 1984, Woodland Hills Career Turning Point: Started a company called Help Me Rent that focused on leasing apartments for landlords. What was your business in high school? I got my first job managing a carwash in Woodland Hills. At the time we (consumers) had Nokia cellphones. I made friends with distributors downtown in the wholesale district. I would go between them (the carwash lines) selling the leather cases and headsets at $10 apiece and I would buy them for $1 downtown. By time I graduated from high school I had three stores. I employed 40-something people. And I ended up selling the whole thing for $500,000. Why did you sell? On the first day of me opening the first store, I bring her (my mom) down to the store in a limousine. I take her out to dinner, I take her shopping and she goes home. I get a phone call the next day that she had a stroke and then she fell into a coma for six months and woke up brain dead and body paralyzed for three years at a Studio City convalescent home, and then she passed away there. I had to cover all those medical bills ($241,000) from the sale of the stores. That was the reason why I sold, aside from that it was keeping me off track in high school. What did you do then? When I sold the business, I moved the money into buying pounds of cannabis. Like $100,000. I was a dealer. The day before my house was going to get raided, someone tipped me off. I got rid of everything the night before. They came through my place at 6 a.m. but they couldn’t find anything. How did you get into residential leasing? I was 20. I leased an office and called the business Help Me Rent. I watched these (home) foreclosures starting and I saw where it was going. I started doing these cold calls to get leasing listings. I ended up with 25,000 (residential) units for lease, 500 buildings, 100 estates (homes), 46 full-time leasing agents. These are building owners that own 30 buildings, 20 buildings – I would get their whole portfolio to do the leasing. I did this for three and a half years and I did 6,000 successful leases in my career. It burnt me out. What did you do next? At that point I kept the name Help Me Rent but closed the doors. I tried taking Help Me Rent to a magazine. It failed. How much money did you lose? Millions – but under $10 million. I had to rebuild everything. How did you get into brokering apartment sales? I signed up to Re/Max commercial because it was within walking distance (of where I lived.) I didn’t even have a car. After a month of living at the townhouse (of one of his former clients), I asked the owner, ‘You want to sell this place?’ The owner said, ‘Yeah – bring me $5.2 million.’ I market it and find the buyer. As we’re in escrow, the buyer said, ‘If you find anything else, let me know, I’ll buy it.’ Then what? I had this crazy network of building owners, so why don’t I just call some of them? It’s the wheeler-dealer hustler mentality. What about real estate appeals to you? It was my father (an architect), and then watching my mother – having to get that room in the Hayward, seeing how valuable having a roof over her head. Do you have a recent deal you’re proud of? Cusumano Real Estate Group in Burbank sold a two-building apartment complex in Burbank to Essex Property Trust Inc. of San Mateo for $59 million – an 87 percent gain on price. I got to set some pretty aggressive record prices for the seller, and I got to cross over to the institutional side of the table with bringing the buyer to the deal. What do you do in your spare time? Even on weekends with the kids in the backseat and my wife on the cell phone or reading a book, I’ll drive around properties. I’m also building a tech company (called) Crent. This is where $1 million of my money went, and another $1 million is scheduled. I took a year off of real estate (to build this.) What kind of a business is it? First company created for people to build credit for bills they pay on a monthly basis. You can get credit for every payment you make every month. What are the downsides to your job, and how have they affected you? There have been many deals I’ve been disappointed on, that I’ve worked on and someone else got the deal. They’re not small checks – they’re million-dollar checks. I lost a $160 million highrise in downtown all because the owner decided to list it. I lost a $70 million deal in K-town. I lost a $40 million IMT (Residential) building in Encino – the seller decided not to sell it at that moment and decided to sell it a month later – and I may not have followed up then. It had a big, big effect on me.

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