The Real Estate Espresso Podcast

Latest Episodes:

Failure To Understand Cause And Effect Feb 11, 2022

Show notes

On today’s show we’re going to look at the insanity of cause and effect relationships that are being promoted in our economic system.

I’m an engineer by training. When you look at systems in the physical world, they follow the laws of physics. Galileo understood these principles at an early age when he dropped two cannon balls of different weights from the leaning tower of Pisa. To everyone’s shock and amazement, both cannon balls landed at the same time. Back in those days, Galileo experienced political pressure and division. But the physics didn’t care about the established power structure in the community.

Making It Easy To Listen Feb 10, 2022

Show notes

I’ve had a number of podcast guests and listeners ask about what it takes to be a guest on this show.

On today’s show we’re going to look at two aspects of podcast recording. What I’m going to talk about is equally applicable to a radio show or even video. We are talking about audio quality. I’m often approached by real estate investors to be a potential guest on this show. I would say that I average about 2-3 requests per day to be a guest on the show. I reject the vast majority because I don’t think they would be a good fit for you, the listener.

Our listeners are sophisticated investors. Many of you are experienced apartment investors. Some own thousands of units. We have listeners who are investment bankers. We have lenders. We have people who are architects and engineers who work for some of the major commercial builders around the nation. You are not a rookie audience.

We are not the “We buy houses” crowd who are out there sending thousands of mailers hoping to close a tiny percentage of distressed home owners. In order to be a guest, you have to have a message that is relevant to our listeners. That’s a given. Next you have to be able to deliver quality audio.

On today’s show we’re going take a deep look at audio quality. I want you to hear the difference between a professionally recorded and edited show, versus one that has been thrown together. When you are listening to a show with high production values, you don’t notice the audio quality. It is effortless to listen to even in a wide range of environments.

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Host: Victor Menasce

email: podcast@victorjm.com

The Latest Fannie Mae Research Feb 09, 2022

Show notes

On today’s show we’re taking a look at housing sentiment. The folks at Fannie Mae conduct some of the best research in the nation. The just published their housing sentiment survey for January 2022 and the results show some interesting feelings about real estate. The survey consisted of 1006 households from Jan 3 to Jan 24.

The home sentiment purchase index has a number of components.

They look at questions like

Is it a good time to buy?

Is it a good time to sell?

Will home prices go up, down or stay the same?

The survey looks at job security and whether people are concerned about

Respondents also predicted their expectation for home price increases and rental price increases.

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Host: Victor Menasce

email: podcast@victorjm.com

AMA - The Lady In The Basement Feb 08, 2022

Show notes

This question comes from Jen in Bulgaria. She asks,

I’m preparing to close on a house purchase that forms part of an attached dwelling. The basement apartment is a separate apartment and the lady who lives in the basement has been there nearly 50 years. The attic space which forms part of the main house is a third level. Legally, the attic space is written in the deed as a shared space. This means that the basement apartment has a partial claim to the attic space which is not truly connected to the basement. Think of it almost like an easement.

We want full access to the attic space for living space and don’t want the risk of the lady in the basement making a claim to it. Would you take the risk of asking her to sign a release? She is probably unaware that she even has a theoretical claim to a fraction of the shared attic space.

The lady in the basement is probably interested in selling her flat in a couple of years.

How would you handle the situation?

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Host: Victor Menasce

email: podcast@victorjm.com

Green Buildings Feb 07, 2022

Show notes

On today’s show we’re talking about a relatively new environmental standard that is increasingly being referenced by government in order to qualify for certain incentives. That standard is called the 2020 Enterprise Green Communities.

This standard is being adopted if you want to take advantage of affordable housing credits or affordable housing funding in most states of the country.

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Host: Victor Menasce

email: podcast@victorjm.com

Ben Kogut Feb 06, 2022

Show notes

Our guest today hails all the way from Austin Texas where his team invests in commercial office, retail, and shopping centers on a national basis. On today's show we're talking about the focus for thriving in the current pandemic-adjusted market conditions. To connect with Ben or to learn more, visit hjhinvestments.com.

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Host: Victor Menasce

email: podcast@victorjm.com

Beau Eckstein Feb 05, 2022

Show notes

On today's show I'm speaking with Las Vegas financing broker Beau Eckstein about the Commercial PACE program which provides leading specific to energy efficient buildings. To learn more or to connect with Beau, visit beaueckstein.com.

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Host: Victor Menasce

email: podcast@victorjm.com

The Banking Regulator Versus Victor Feb 04, 2022

Show notes

On today’s show we’re taking a look at Canada. There was a recent prediction of market collapse of 10%-20%. The prediction came from Canada’s top bank regulator. We also have bureaucrats and politicians out there blaming house flippers for the run up in property prices.

So we’re going to take a deeper look at how real estate markets work and see if we agree with the head banking regulator. While the example we’re looking at is in Canada, the same thinking can be applied to your local market conditions.

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Host: Victor Menasce

email: podcast@victorjm.com

The Future of Banking Feb 03, 2022

Show notes

On today’s show we’re talking about the shift that is taking place in the world of banking.

The landscape in banking varies widely in the US. There are a handful of big banks and still a whole lot of smaller banks. Banking in the US has undergone a tremendous amount of consolidation. Before the financial crisis in 2008, there were over 10,000 banks. Over the past decade, that number dwindled to about 6,000. As of today, the FDIC lists 4,982 banks in total.

Many of these are small community banks with only a handful of physical branches. Some were forced into consolidation after the banking regulator determined that the weaker banks were too thinly capitalized in their stress tests.

There is a difference between banks. Many depositors choose their bank based on convenience to the closest physical branch. Some depositors choose their bank based on incentives like a free toaster to open an account. Others choose the bank based on the fees charged on each account.

We like to use smaller community banks for borrowing against local real estate projects. The executive team and loan committee understand the local market better than the large national banks. These smaller banks have a bit more latitude in their lending criteria. When you deal with a large national bank like Wells Fargo or Chase you are just a number and their policies are often dictated by market conditions in other cities that don’t actually apply in your city.

But I’m also here to tell you thank banking is about to undergo another major transformation. Some banks choose to grow organically. Others choose to grow through acquisition.

TD, which is a Canadian bank is increasingly a major player in the US market. Most American clients don’t even know that TD stands for Toronto Dominion Bank. TD announced in their latest investor disclosures that they plan to hire 2,000 software developers this year. That’s on top of the 350 software developers that were hired in 2021.

When you consider the full cost of investment in that large a software development team, you are looking at more than $500M dollars per year. TD is consciously making a decision to add $500M in operating expense to annual budget. Said differently, they’re choosing to remove $500M in profit from the bottom line return to shareholders on an annual basis. That’s a massive investment.

What will they be doing with all these software developers? Listen to find out.

The Adoption Curve Feb 02, 2022

Show notes

On today’s show we’re talking about how demand patterns will change in the wake of the pandemic. How will our world be different post-pandemic. Will people want to dine out the way they did before?

I just spent a month in Mexico at a resort with incredibly beautiful restaurants. I have to say, I really enjoyed eating out in restaurants after nearly two years of not experiencing restaurants.

Like anything, there will be a transition. But transitions always come in waves. Transitions are started by the innovators. These are the folks who are blazing a trail before anyone else is even aware that an option exists. These are next followed by the early adopters. These folks love to try things that are new.

The next major group are the early majority, followed by the late majority, and then finally the laggards.

This adoption curve applies to virtually anything. It applied historically to the radio, then television, video tape recorders, digital cameras, cell phones. It applied to travel by steam ship, air travel and it will apply to space travel.

The adoption curve applied to buying groceries online. It applies to electric cars. The adoption curve applies to working from home. The adoption curve applied to using credit cards for purchases.

Today that same curve will apply to changes in the way people travel. The way people choose to live.

When you look at the adoption curve, it looks like a letter S. Adoption is slow at first and then accelerates through the middle, and then finally takes a long long time to reach the remaining holdouts in the population. I still know a few people who don’t own a cell phone. But not many.

The question is whether you are dealing with a fad or a trend? A fad will achieve market prominence and then fade.

Are electric cars a fad or a trend? Are Cruise ships a fad or a trend?

How are these trends or fads related? Is your real estate capable of providing rapid charging for electric vehicles? Do your buildings have secure e-commerce delivery lockers? Homes in the old days used to have a locker for milk delivery next to the front door. Fascinating that the same concept is being reincarnated a few decades later.

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Host: Victor Menasce

email: podcast@victorjm.com

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