The Real Estate Espresso Podcast

Latest Episodes:

Crypto Is Under Assault Mar 28, 2023

Show notes

On today’s show we’re talking about another missing piece in the puzzle over the evolution of money.

Crypto-currencies were launched with the promise of replacing FIAT currency with a crowd sourced anti-establishment, off-grid alternative. The technology is rooted in the need for a system that would enable online micro-transactions where the transaction cost could be virtually zero.

If you want to make an online purchase within a game that costs only a few pennies, or perhaps a few tenths of a penny, there is no payment processing system that caters to these micro-transactions. Some of the early movers were looking for a light-weight system that would make it possible to create a low overhead transaction. Rather than charge users for the transaction, the would require each computer to do a small amount of work. That work in exchange for money was called hash cash and would take the place of a centralized infrastructure required to process a transaction. After all, data centres are expensive to build and to maintain. They consume a lot of power and required air conditioning. If instead of a datacenter, you harnessed the distributed computing power of all the users, you could get the work of managing and maintaining the database for free and require no data center at all.

This concept was the early days of what later became known as mining for bitcoin. If you do a small amount of work, you get some micro financial credit for the work.

Since the early days of bitcoin the notion of free work has been at the core of the distributed database that makes up the distributed blockchain.

The agenda behind these technologies was simple and pure. Create a low overhead financial transaction system. Later on, blockchain technologies took on the agenda of becoming a crypto currency. The notion of a store of value and an ever increasing value came much later.

It is this quality that has raised the ire of the financial regulators.

Governments generally don’t want competition for the nation’s currency. The US doesn’t want it, China doesn’t want it and have already outlawed crypto currencies.

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Host: Victor Menasce

email: podcast@victorjm.com

Monetary Response To A Crisis Mar 27, 2023

Show notes

On today’s show we are looking at some currents that are underneath the surface which to me are very concerning.

We have a history as a society of taking quantum steps to relinquish our individual rights in response to a crisis or even in some cases for convenience.

In the wake of the terrorist attacks of Sept 11, 2001 many people in the West allowed for governments to collect much more information about each of us in the name of safety.

Winston Churchill said, “Never let a good crisis go to waste.”

Today, payments are increasingly becoming electronic, which means that your banker knows when you bought pizza from Dominos at 2AM. So far the government doesn’t know that you ordered pizza at 2AM. But if they did, what value judgement would be applied to that transaction? Would it impact your credit score?

At what point will government become enmeshed in your financial world? What will be the trigger?

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Host: Victor Menasce

email: podcast@victorjm.com

Live - Appraisal Cap Rate Is Irrelevant Mar 26, 2023

Show notes

Today's show is coming to you live from the Secrets of Successful Syndication Conference in Dallas. We're talking about the current market reality.

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Host: Victor Menasce

email: podcast@victorjm.com

Student Housing with Will Matheson Mar 25, 2023

Show notes

Will Matheson is based in Charleston South Carolina. On today's show we are talking about student housing and the strategies that make for successful investment in that specific segment. To connect with Will and to learn more, visit his company website at mathcap.com

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Host: Victor Menasce

email: podcast@victorjm.com

AMA - Short Term Rental Surprise Mar 24, 2023

Show notes

On today's show, Roland asks:

I listen to your podcast daily. Thank you for sharing your insights and bringing together a depth of knowledgeable people to share their real estate insights. George Ross is my favourite!

I am writing to you because I am in a predicament with a recent acquisition. Recently I purchased a number of small, run down lake side properties in a small Quebec community about 1h15min from downtown Ottawa, with the intention of renovating and renting them out as short term rentals. I was given what I consider to be a really good deal on seller financing. The properties had been sitting on the market for some time and I befriended the seller. Before moving forward with the purchases I’d done my research - because I own a cottage in the community i knew of its potential revenue and I did my due diligence with the municipality to ensure short term rental was allowed. But recently I was informed by city officials that they will not permit me to run a STR after all, citing their stance on STR has changed.

So with that background I was wondering what you would consider doing in this situation if you were in my shoes. The properties are located on a sizeable lake, the area has a a rich history of tourism specifically anglers from the United States… this is because prior to the pandemic the properties were used by a fishing and hunting business operator. Some of these customers have been coming back and I have a relationship with the retired operator Despite the city’s u turn I remain positive and bullish on the area and the future property value. There is no major attraction in the area other than its proximity to Lac st Marie (about 20 minutes south) but I know the area has members of some of Ottawa’s prominent families who own cottages in the area.

So I am forced to make the space available as a medium to long term rental. I am hesitant to go long term given the rental profile of the community. Then I had a thought I thought maybe you might have some perspective on given your experience in the Ottawa medium term real estate rental space.

What would you do if you found yourself in this situation?

Is The Market Ignoring The Fed? Mar 23, 2023

Show notes

On today’s show we are answering a simple but important question: Is the market ignoring the Fed?

What does the yield curve tell us about the recent 0.25% rate increase announced by the Federal Reserve on Wednesday.

The shape of the yield curve can tell us a lot about the market sentiment in response to the Federal Funds rate.

We have been inverted for much of the past year.

The yield curve has flattened a lot in the past two weeks as a result of the banking crisis. We have seen demand for short term T-Bills spike which has pushed prices up and yields down.

Over the course of the day we have continued to see yields fall despite the rate increase announcement.

The banks have a choice to put cash on deposit at the fed for a rate of 4.75%. Reverse repo is incredibly flexible and secure.

But for some reason, they’re choosing not to put those funds on deposit at the Fed, which offers the highest interest rate in the market and is risk free).

We see all of the Treasury offerings, except the 6 month T-Bill pricing below the federal funds rate.

The two year is down 36 basis points over the day at 3.882%. The 4 week T-bill is at 3.91%, down 28 basis points over the day. The 8 week is at 3.98, roughly flat for the day. The 10 year is yielding 3.462, roughly flat for the day

The 30 year is yielding 3.68, down six basis points from the day before.

All of these rates except for the 6 month are below the Fed funds rate. I don’t believe there is anything magical about the 6 month T Blll other than market inefficiency at play. We will continue to monitor the 6 month to see if the trend we are seeing in the other maturities.

So what does this all mean? Should we be happy and calm or terrified?

There's a Cheat In The Casino Mar 22, 2023

Show notes

On today show, we are looking at why we might be experiencing a global debt crisis. So far virtually nobody in a position of authority is admitting that we have a debt crisis. As I said, on the show a couple of days ago, when a balloon bursts, it’s very often the case that the pin gets the blame and it’s almost never the pins fault.

Before we can understand the problem, we first need to go back to a basic definition.

Debt is a claim on future earnings. The only way to liquidate a debt is for those future earnings to be equal or larger than the debt service. The problem we have globally is that debt has been growing at a much faster rate than the economy.

Why is it that the house of cards has not come crashing down yet?

As recently as two weeks ago, Jerome Powell admitted in the congressional hearings that our current path of exponentially, growing debt is clearly not sustainable.

The answer can be found in the silent tax. The devaluation of the currency, what we commonly call inflation is the magic through which we pay back every penny and still cheat the lender out of their money.

On today’s show we are going to do some math to see the impact of inflation on the value of a loan.

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Host: Victor Menasce

email: podcast@victorjm.com

A Peek Under The Covers Mar 21, 2023

Show notes

We have had several investors ask us how we launch a new investment offering. On today’s show we are going to take a look under the covers for what it takes to launch a webinar to inform investors of a new investment opportunity.

When we have an investment opportunity in our company, we inform those who are already connected with us by email. We may also get new people inquiring about our offering as a result of referrals from friends. The primary means of communicating is as simple as sending out an email. Sounds simple so far.

But whenever the conversation is between our team and potentially dozens if not hundreds of investors, we need to be extremely organized. Many weeks of work goes on behind the scenes before the webinar can happen, and before the first email goes out.

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Host: Victor Menasce

email: podcast@victorjm.com

Acute Pain Versus Chronic Pain Mar 20, 2023

Show notes

On today’s show, we are looking at the difference between acute pain and chronic pain. With acute pain, such as you might experience when you hit your thumb with a hammer can be all consuming. You can think of nothing else. Acute pain is usually temporary. But while you are experiencing it, dealing with acute pain, takes priority and crowds out virtually anything else. Chronic pain on the other hand, is something that you deal with on a daily basis. It’s a little bit like having a rock in your shoe. It’s enough to be annoying. It slows you down. Often times the pain is not bad enough to motivate you to take off your shoe and get the rock out. You grumble, you complain, but rarely do anything about it.

Our financial system is experiencing both of these types of pain simultaneously. Inflation is analogous to chronic pain and bank failures definitely fall into the acute pain category. We have been hearing from federal reserve chairman Jerome Powell for months now about the importance of taming inflation.

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Host: Victor Menasce

email: podcast@victorjm.com

Dan Lazar Mar 19, 2023

Show notes

Dan Lazar is coming to us from Melbourne Australia. He started his journey as a tennis player and eventually became Romanian national champion. Today, he's building homes in Melbourne. On today's show we get an update on what is happening in real estate in Australia since the pandemic.

To connect with Dan, visit herox.com.au or reach out to him on LinkedIn.

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Host: Victor Menasce

email: podcast@victorjm.com

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