The Real Estate Espresso Podcast

Latest Episodes:

More Will Change In The Coming Year Than Ever Jun 16, 2023

Show notes

We have all experienced entering a search query only to receive a long list of unrelated products that happen to match one of the keywords in the search.

Incorporating artificial intelligence into the customer experience will transform search. You might be wondering how this will affect real estate investors.

I’m glad you asked.

Imagine you have a portfolio of rental properties and the client is looking for a three bedroom apartment within 10 minutes walking distance of a specific elementary school, or within a five minute walk of the number 65 bus route. Today’s apartment listing sites force you to wade through hundreds of listings and for you to make the determination whether a property will meet your criteria.

In the future, those companies that deliver a better search experience will have the differentiated offering in the market.

In fact it will not be enough to incorporate AI in your offering. You have to remember, these systems can learn. Just like you have to train a newly hired employee in your business, you will need to train the software to respond appropriately for your target customer’s queries.

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Host: Victor Menasce

email: podcast@victorjm.com

AMA - What Does The Crash Look Like? Jun 15, 2023

Show notes

Today's question comes from Adam who writes:

Hello Victor,

Thank you for the wonderful podcast. I am a daily listener and I regularly recommend the Real Espresso Podcast to others.

Today you ended your podcast (S6 E166 Cand the Banks Survive Another Rate Increase?) with words "before it all comes crashing down". I know many are like me wondering what this crash will look like in our own sectors of real estate, but I also know you are not big on making predictions.

That being said, when you say "before it all comes crashing down", what does that mean for us real estate investors? Which real estate asset classes do you think will be impacted most?

Thank you again and have an awesome day!!

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Host: Victor Menasce

email: podcast@victorjm.com

Can The Banks Survive Another Rate Increase? Jun 14, 2023

Show notes

On today’s show we are talking about the coming financial crisis. You might be wondering how I can say that. We are not seeing more bank failures since the failure of First republic Bank.

We are seeing signs of it creeping into the news headlines. Yesterday’s Wall Street Journal has zero’d in on the looming crisis in commercial real estate and the associated credit crunch. Today the Federal Reserve is meeting, as they do every six weeks. Their interest rate announcement will be a few hours after this podcast is published.

The bank failures so far this year, while larger and more severe than the failures of 2008 have been explained away by banking regulators and Federal officials as isolated cases. These banks we are told were not well managed.

But on today’s show we are going to look at the underlying conditions that led to the failure of these institutions and see if they are isolated to those banks or not.

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Host: Victor Menasce

email: podcast@victorjm.com

AMA - Should I Invest In A Tax Shelter? Jun 13, 2023

Show notes

This question comes from Paul who writes:

I have booked a strong capital gain as a passive investor in a syndication. The sponsor of the deal is asking all investors to come along for the ride in a 1031 exchange. The sponsor seemed to do a good job on this first project. However, the proposed replacement property is in Houston and I don’t have a good feeling about the fundamentals of this replacement property.

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Host: Victor Menasce

email: podcast@victorjm.com

Deep Fakes and Shallow Fakes Jun 12, 2023

Show notes

On today’s show we’re talking about my personal experience with the media.

I also want to be careful to make sure this does not come across as sounding like a bunch of conspiracy theories.

There is an accepted social norm called social proof. This is based on the idea that if you say you are great, that is not as powerful as having someone else say you are great.

That is why reviews for a hotel on Trip advisor are more valuable than a glossy advertisement from the hotel saying how great the hotel is. We can also imagine that maybe not all of the reviews on Trip Advisor could be planted by people connected to the hotel. The long list of glowing reviews can sometimes overshadow the small number of negative reviews. The question is, “What is are more accurate reflection?” Are the negative reviews more accurate? Who knows?

We tend to believe what we see, read and hear in the news.

Andrew Abernathey Jun 11, 2023

Show notes

Andrew Abernathey is based in Phoenix Arizona where he develops storage facilities in Arizona and California. Working closely with a family office, Andrew and his team at Abernathey Holdings are scaling up aggressively. To learn more or to connect with Andrew, visit Abernatheyholdings.com

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Host: Victor Menasce

email: podcast@victorjm.com

Legislative Risk with Anna Kelley Jun 10, 2023

Show notes

Anna Kelly is based in Lancaster Pennsylvania and she invests in several markets across the SE USA including multi family apartments and short term rentals. She has established herself as a leader in the space. On today's show we are talking about risk, and some of the lessons of the past three years. To learn more or to connect with Anna, visit reimom.com ----------------- Host: Victor Menasce email: podcast@victorjm.com

AMA - Managing A Remote Construction Project Jun 09, 2023

Show notes

Today's question comes from Christian who asks: I’m small time RE investor and about to do my first long distance flip. Is it worth hiring a project management company? It is a flat fee and they would help with design, compare costs, negotiate with contractors, and management. The project budget is $50k-$100k and the cost is $7k for the PM. Is it worth it?

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Host: Victor Menasce

email: podcast@victorjm.com

Thought Experiment on Risk Management Jun 08, 2023

Show notes

On today’s show we are going through a thought experiment about the risk of large global divisions and how that might affect your real estate development project.

To walk through the process, we are going to use an example of a small construction project for a single family home. The home is already under construction and the foundation has been poured and the wood framing is 80% complete. The project has been started and like all construction projects, once it is started it must complete.

Any discussion of risk requires a more detailed analysis of the elements of risk. Let’s start with a definition of risk.

A risk is anything that is not in your plan. In this context it is fair to say that most businesses have not taken into account the risk of China becoming fully isolated from the western world. Europe and the US would certainly face severe product shortages if that were to happen. When we talk about risk we need to break it down further. Risk gets broken down into likelihood and impact.

We know from history that people are notorious poor at assessing whether a risk is likely to come true or not. So we are not going to even try to assess the likelihood.

What we can quantify is the impact.

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Host: Victor Menasce

email: podcast@victorjm.com

Invisible Counter Party Risk Jun 07, 2023

Show notes

The Wall Street Journal finally reported on something that investors and lenders have known for more than nine months.

The rapid rise in interest rates has created a structural problem for commercial real estate.

The issue goes far beyond the headline that nearly $1.5T in commercial real estate debt is vulnerable to default in the next three years.

The punch line of the article is that lenders are prone to foreclosing on these loans because the issues with office occupancy are not likely to be resolved anytime soon.

Unfortunately the simplified reporting completely neglects the fact that the lender is not some rich dude who can withstand the loss with no consequences to everyday citizens.

The counter party risk that was present in 2008 is still present today.

Why is that?

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