The Real Estate Espresso Podcast

Latest Episodes:

Eddie Speed Nov 13, 2021

Show notes

Eddie Speed is a specialist in Notes. He started buying notes in the 1980's, and today is focused on a particular segment that is largely overlooked. You will love this contrarian strategy.

To learn more, visit noteschool.com/getstarted

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Host: Victor Menasce

email: podcast@victorjm.com

Exempt From What? Nov 12, 2021

Show notes

Today’s show starts with a disclaimer. I’m not a lawyer and today’s show should not be construed as legal advice. Always seek advice from a lawyer who is competent in that specific area of the law.

On today’s show we’re talking about something that I see frequently. It’s increasingly common to see sponsors of an investment opportunity to be marketing on the Internet or in social media.

Many jurisdictions have strict rules against solicitation for investment.

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Host: Victor Menasce

email: podcast@victorjm.com

AMA - What To Focus On Next? Nov 11, 2021

Show notes

Today's question comes from Luc in Ottawa. He asks "I've just purchased my first investment property. I'm looking to grow. What should I be focusing on?"

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Host: Victor Menasce

email: podcast@victorjm.com

Buy On The Line Revised Nov 10, 2021

Show notes

On today’s show we are talking about a twist on a strategy that we have been using for close to a decade. If you have been listening to this podcast for a while, you will have heard me talking about the buy on the line, move the line strategy.

This approach is an exceptionally good way of creating value in the market. What we mean by this strategy is to exploit the many dividing lines that emerge in real estate sub markets where on on side of the line there is a hot expensive neighbourhood and on the other side is an economically depressed area. Often these lines are arbitrary. They exist for no particularly good reason.

If you redevelop on the wrong side of the line, then guess what? The line has moved and is now on the other side of your property. Because there are no comparable properties on the poor side of the line, you will get a valuation similar to the hot neighborhood next door.

Today I want to revise the description to include one very specific special case.

If the line is a municipal boundary and the city is a growing city, you might want to consider property that is just outside the municipal boundary. If the city has a history of annexing land and growing its boundary, this can also be another opportunity to create tremendous value.

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Host: Victor Menasce

email: podcast@victorjm.com

Managing Supply of Services Nov 09, 2021

Show notes

On today’s show we’re talking about another constraint in the world of real estate development and construction.

The labor shortage that is making headlines is being experienced across the entire construction industry.

That is particularly being felt in many of the support services that assist builders. Any construction site will require some basic services including safety fencing and portable toilets.

Something as simple and commodity as portable toilets has become incredibly difficult to source. As a developer, you would never even pay attention to that, or imagine that toilets would be a constraint. Well it turns out that on one of our projects, we had three companies in the past week decline to provide the service to our projects because they were not taking on any additional business from now until well into the new year. They were completely short staffed and could not handle any additional business. It took no less than 6 phone calls to find a single company that would provide a portable toilet to a construction site. This is shocking. A portable toilet is a requirement for a construction site. The building inspector will shut you down if you don’t have one.

We had several other suppliers of construction equipment decline our business. They simply didn’t have the staff to take on additional work.

How do you solve it? Listen and find out.

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Host: Victor Menasce

email: podcast@victorjm.com

Managing Your Supply Chain Nov 08, 2021

Show notes

On today’s show we’re talking about managing your supply chain. There’s no question that some suppliers are having trouble keeping up with demand. Some channels are simply fully depleted. Almost all real estate investors at some point are buying construction materials, either directly, or indirectly through a subcontractor. When buying through a subcontractor, you often pay more because the subcontractor is simply passing the cost on to the end customer. If prices are elevated, then you can feel the full impact of those higher prices, even if the various supply chains are inefficient. Subcontractors have next to no incentive to shop around for low prices.

As a developer, you are faced with several difficult choices. Do you allow your subcontractors to quote and then purchase materials, or do you take on that procurement function in-house? If you decide to assume responsibility for purchasing materials, what supply chains do you want to utilize?

Sanchoy Das Nov 07, 2021

Show notes

Sanchoy Das is a processor of Industrial Engineering at the New Jersey Institute of Technology. On today's show we're talking about global supply chains and how to manage the impact of disruptions.

You can connect with Sanjoy at das@njit.adu.

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Host: Victor Menasce

email: podcast@victorjm.com

The Last Letter Of The Alphabet Nov 06, 2021

Show notes

On today’s show we are taking a close look at one of the most insane ideas to hit the market this year.

In a bull market, everyone looks like a genius. But there is a cautionary tale here. Don’t ever mistake intelligence for luck in a bull market situation and that seems to be what Zillow has done over the past year with its Zillow Offers business.

Let’s recap how Zillow offers was supposed to work.

Zillow was using their really sophisticated software algorithm that produces the Z-Estimate to find value in the market. Zillow got into the house flipping business with Z-offers. The idea was that Zillow would buy properties in the open market, conduct a very light rehab, and then sell them in the open market for a profit.

They were not going to be creating much in the way of real value, as a stated objective of the program. So the only way for them to generate a profit would rely upon buying properties at a discount to the market value.

What Zillow would do is they would look at comparable properties in the market and then buy those it considered to be a bargain based on its algorithm. What could go wrong? Listen to find out.

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Host: Victor Menasce

email: podcastg@victorjm.com

Artificial Deadlines Nov 05, 2021

Show notes

On today’s show we’re talking about artificial deadlines. These types of manipulations exist all over. They’re designed to create a sense of urgency to cause people to act. One of the sources of competition for someone’s action is simply doing nothing. Often doing nothing is the default. The world of sales and marketing is full of techniques designed to cause a buyer to act now.

You have no doubt seen the call to action on the website. It says, “Call now” or Act now, or Order Now.

The most common technique is called FOMO, and acronym that is short for fear of missing out.

That’s why Black Friday Sales are effective. Black Friday only comes around once a year. Why could there not be a Monday sale, or a December 12th sale?

Because if they made the reason truly arbitrary with no plausible excuse, then the manipulation would be exposed for what it is.

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Host: Victor Menasce

email: podcast@victorjm.com

What's Happening In Travel Nov 04, 2021

Show notes

On today’s show we’re taking a look at what’s happening in the travel sector. Many real estate investors, even large commercial real estate investors own portfolios of rental properties and portfolios of short term rental properties. This can mean short term rentals in the core of business district, or it can mean a ski chalet in the mountains or a cottage on the lake. All three of these are going to be affected by the dynamics of global travel.

Travel is starting to rebound on a global basis. It is a nuisance to spend a few hundred dollars on covid tests in order to board an aircraft. Airfares were low in the summer in an effort to bring people back into air travel. But rising fuel prices and the financial pain of the past 18 months means that airlines have to charge more in order to survive.

Hotels have struggled with incredibly low occupancy throughout the pandemic. But here too the numbers are improving.

Several of the largest hotel brands Marriott, Hilton and Hyatt reported their numbers for Q3. Occupancy rose 23.4 percentage points from 34.8% in Q3 of 2020 to 58.2% in the third quarter of this year. While occupancy may be up, nightly rates are still low as hotels try to compete for too few travelers. The folks at Hyatt reported their financials yesterday. Their revenue per available room is down 31.8% compared with 2019, which is slightly better than the industry average which is still down 35.5% compared with 2019.

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Host: Victor Menasce

email: podcast@victorjm.com

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