The Real Estate Espresso Podcast

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Talking Goals with Special Guest Robert Helms Jan 04, 2020

Show notes

My good friend Robert Helms of The Real Estate Guys Radio Show has just completed the second full year of operation at Mahogany Bay Village, a Hilton Curio Collection Resort. This is an extraordinary property with features and experiences that are unique in the world. Like me, Robert also is passionate about goal setting. He hosts the Create Your Future Retreat in Lake Las Vegas on Jan 17-18. You can learn more at http://goalsettingretreat.com. My conversation with Robert is packed with value bombs. We are truly kindred spirits.

The 15 Minute Community Jan 03, 2020

Show notes

On today’s show we’re talking about one of the latest ideas in community design. It’s the 15 minute neighborhood. The idea behind the 15 minute neighborhood is that everything you need to live your daily life should be within 15 minutes walking distance of your home. That means a trip to the grocery store, a trip to the office, and a trip to the dry cleaner would all be within a 15 minute walk. Trips further afield could rely on a 15 minute walk to a public transit stop.

The idea of walkable communities is not new. If you spend any time in Europe, you’ll find communities that were centered around the town square. These places were built before the advent of the automobile and they’re some of the most livable communities, despite the lack of parking. But if you go to even small communities in Europe of, say, 40,000 people, you will find 6-10 story apartment buildings, dense main-streets with clothing stores and a local deli, a neighborhood restaurant serving simple food, and a fine dining restaurant.

You’ll find the local flower shop, the pharmacy and the health food store.

The design of North American cities have created a separation between the commercial center and the places where people live. The suburban lifestyle where row upon row of identical houses with manicured lawns is an artifact of the 1970’s and 1980’s. This trend created a band of abandoned real estate outside the core of each city. Drive a bit further and you get into the suburbs. But really it makes no sense. Communities all over North America have rediscovered that band of real estate and started redeveloping it.

My home town of Ottawa Canada has adopted the concept of the 15 minute neighborhood into its latest incarnation of the official plan. But if you research the concept, you’ll find other communities like Boulder Colorado and Portland Oregon adopting a similar concept. All across North America, we have bankrupted our cities and states by putting the everything ever farther apart, and then building huge networks of roads and public transit to connect it. Our cities have ballooned far faster in land mass than they've grown in population, and face ever-mounting maintenance costs for all that pavement, at the same time as residents clamor for yet more roads to deal with congestion caused by all the driving we’ve forced ourselves to do. If you’ve ever built a road, you know exactly how expensive they can be to build and maintain.

The best way to lower these costs is to fill in the spaces left vacant in the middle of our cities that have fallen out of fashion. That means no new roads, no new public transit, no new schools. It’s re-using the infrastructure that’s already there and being paid for.

One of the big tragedies of urban sprawl is the way we get children to school. I’ve lived in the suburbs for the past 30 years. My children have been walking distance from school. When I grew up, I used to walk to school, but my children never experienced that. They had to take a 30 minute drive on a school bus instead of a 20 minute walk to school. Frankly, that’s pretty messed up. I’d love to see the return fo the neighborhood school and get rid of all those school busses that are taking kids 30-60 minutes twice a day all over North America.

As you look at opportunities for development projects, study the 15 minute neighborhood and inspire your local communities to make old world sensibility part of the new world city.

Today Is Just Another Day Jan 02, 2020

Show notes

A milestone date is just another day, or is it? As we enter 2020, the only thing that’s different is that we are a day older, either more tired, or better rested, depending on what you did in the past 24 hours.

It’s part of the social dialog to set New Year Resolutions. The fact is, less than 4% of the population actually set goals, and then the subset who do usually don’t meet their goals. So against those troubling statistics, it’s tempting to give up.

I’ve discovered that the secret is to setting habit goals and putting those at the forefront of your daily practice. Habits govern the thousands of micro-decisions that make up your day, your month and ultimately your life.

The result of doing is doing. The result of not doing is not doing. The result of trying is trying. The result of wanting is wanting. The only thing that counts is the decision to do or not do.

As you go into 2020, take the time today, before the phones start ringing, before the laundry needs to be done to map out 3 habits that you decide (not want) to make part of your daily practice.

You might be thinking, it’s already past the start of the year, and you’ve missed the opportunity to set goals. It’s too late. If that’s what you’re thinking, let me be the first to suggest that you let go of that story. That’s an arbitrary story that originated in your own mind. Today is a day, like any other. But you could choose to make today different. It could be the day you decide to establish some new habits.

You might be looking to establish a new work habit. Perhaps you will turn off your phone for two hours every day, early in the day to make sure you have time with no interruptions to get focus work done. You might decide to confine your meetings to the afternoons only and make sure you have productive time in the mornings.

You might be looking to establish a health goal. Maybe you want to get into a new sleep routine, or a new eating routine.

You might have a family goal to spend more one on one time without interruptions each day. Being present with your family is a gift. I see so many people in restaurants having dinner together, but separately. They’re facing each other, but looking down onto a screen. The problem isn’t the electronics. It’s a decision to prioritize the stimulation of an electronic device and avoid the vulnerability of a face to face, eye to eye conversation. Everyone can carve out 30 minutes, or 60 minutes without an electronic device causing distractions. Ultimately it’s those personal connections that make the difference in the quality of your daily life.

If you’re experiencing stress on a daily basis, it means that you’re spending too much of your day doing things that are not in alignment with your core values. If you allow your day to get filled up with things that are not in alignment with your most closely held values, then you will be unhappy. It means that you’re living your day, your life for someone else’s values, but not yours. Maybe it’s fear of disappointment that’s driving you, maybe it’s fear of looking bad against some measure that’s only serving your ego. Whatever it is, bringing your values into alignment with your daily decisions is the secret. If you spend enough of your day feeding your true core values, you can’t possibly be unhappy.

Don’t wait for a milestone date to make the decision. Start living your life for you, authentically, purposefully, decisively.

I wish for your all the health, happiness, and success in 2020 and the coming decade. Today is just another day, maybe the day you decide to integrate new habits into your life. Go make some great things happen.

Podcast Trailer Jan 01, 2020

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The Real Estate Espresso Podcast is your morning shot of what's new in the world of real estate investing.

BOM - The Body: A Guide For Occupants Jan 01, 2020

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Today’s book is in a completely different track from books we’ve reviewed in the past. Today’s book is called “The Body: A Guide For Occupants”. By Bill Bryson. Bill Bryson was born in Des Moines, Iowa. For twenty years he lived in England, where he worked for the Times and the Independent, and wrote for most major British and American publications.

Bill Bryson has written more than 20 books and his works have been published in multiple languages. His latest book has achieved New York Times BestSeller status. On this day, I made the decision to fall prey to the marketing and choose a book off the New York Times Best Seller list. Had the book not achieved best-seller status, I probably would not have chosen to read it.

The Body is truly a book about how to take care of this vessel that we use and abuse on a daily basis, expecting so much from it. It rarely breaks, requires surprisingly little in the way of maintenance or spare parts. You never have to change the oil or the spark plugs.

This mushy miracle we call our body is pretty much taken for granted on a daily basis. The makeup of the body is billions of cells, bacteria and elements. If you were to purchase the individual components it would cost under $20 to make a human out of raw elements. The books is written like a user’s guide, much like you might get when you purchase a new barbecue or a new car. It shows you all the different systems, how to interpret the different warning signals on the dash board, and how to check your tire pressure. Some drivers know how to use the windshield wipers, but they don’t know how to refill the washer fluid. This book goes into all the different parts of the body and give you a tour of the various systems.

The books is organized into 23 chapters with each section dealing with different part of the system. There is an entire chapter devoted to bacteria and microbes. There is an entire chapter devoted to sleep. There is a chapter devoted to nerves and pain. There is an entire chapter dedicated to the alimentary system. We swallow nearly 2,000 times a day, about once every thirty seconds, fully unaware of the 50 muscles involved in the intricate dance required to force food or drink from your throat down into the stomach.

Why do we choose to chew some foods for a long time, and yet allow others to slide down our throat with hardly any grinding contact with our teeth?

Why do some parts of our body itch, and others not? Why do you scratch your head, but not your spleen?

Even in the late 19th century, it was thought that the male or female decision was not the result of chemistry, but by external factors like diet or temperature, perhaps a woman’s mood during the first trimester of pregnancy. For a little over a century it was believed that the X and Y chromosome were responsible for choosing sex during the gestation process. In fact, it was not until 1990 that two teams in London identified the sex determining region of the Y chromosome. We had sent men to the moon and back, but still didn’t know where boys and girls came from.

How many of you know the difference between a tendon and a ligament? Do you know that the human body is made up of a roughly equal number of body cells and bacteria?

Apart from the dozens of trivia like facts about the body, perhaps useful for a party trick, I found myself appreciating the various systems hard at work, mindful of what they do because of what I do on a daily basis and despite what I do on a daily basis.

If you want to learn more about this thing we live in called a human body that we take for granted, check out The Body: “A Guide For Occupants”. By Bill Bryson.

The Decade In Review Dec 31, 2019

Show notes

Today is New Year’s Eve and it also marks the end of a decade. On today’s show, we’re taking a look at the decade in review.

A decade ago we were in a post-911 world where many western countries were embroiled in conflicts in Iraq and Afghanistan. There was the genocide in Syria and the collapse of the society in Venezuela and numerous other conflicts like the Ukraine have been a blemish on our humanity as a species. In this past decade we all gave up a lot of personal privacy in the name of security. There is more tracking and surveillance than at any time in human history.

This past decade was the decade of social media where it was once a peripheral distraction for early adopters and now has seen widespread adoption by almost the entire western society.

Ten years ago it was 2010, the Great Recession was in full force and real estate prices were falling in many areas of the country. Borrowing was extremely difficult and the only buyers were cash buyers. Loan defaults were making headlines on a daily basis. The next two years would see millions of foreclosures in the United States. Many of the defaults were the so-called maturity defaults where the borrower had made every single loan payment on time. But the loan came up for renewal at the end of a 5 or 7 year term and the bank then required an injection of cash in order to fix the loan to value ratio. Values had dropped so much during those two years that the banks didn’t have enough security. In many cases, properties were under water where the current value of the property was worth less than the loan. That seems like a distant memory. I remember attending real estate meetups in those days when you could buy properties for about 30% of the construction cost. I had people telling me not to invest in real estate because it was too risky.

We established the core of our “buy-on-the-line, move-the-line” strategy that proved extremely effective and scalable. By honing in on a repeatable process, I was able to build a sustainable development business.

I somehow managed to attract incredible people into my life over the past decade. I also attracted a few of the wrong people. Learning the difference and acting to eliminate those who were not a fit was the most important thing for me to do.

In this decade, I wrote two books, I learned how to communicate with the media and had hundred of media appearances and public speaking engagements. I took a leadership role in our local real estate investors organization and helped it grow to roughly double in size. Ten years ago I was listening to podcasts. These were mostly lectures and interviews with people from Silicon Valley. Little did I know that I would venture into this world only a short time later.

In the past decade, I had successful development projects, and I learned to manage success, as well as how to manage failure, delays, and setbacks. There were times when I felt stuck, like I wasn’t making progress fast enough. It was like pushing a rock uphill. I learned that persistence was the key to ultimately achieving success.

I watched my wife grow her family therapy practice from a single practitioner to having a staff of 9. I’m so proud of her.

Within my family, all of my children grew up and transitioned from being teenagers to young adults and living on their own. As a parent, I wish the best for my children. It gratifying to see them chase their dreams and at times it’s difficult to watch them make choices that I not would have made. But that’s what makes them unique. They have to live their life for themselves.

Above all, I’m committed to savouring the journey, to personal growth, and making each new day better than the one before.

As we start the new decade, let me be the first to say, hindsight may be 2020, but 2020 is in your future. Have an awesome New Year and New Decade celebration

2019, The Year In Review Dec 30, 2019

Show notes

On today’s show we are looking back on 2019. The year in retrospect. 2019 is notable as much for what happened as for what didn’t.

For me personally, it was a year of mixed results. We completed construction on two projects. We completed the refinance on two apartment buildings. We sold three assets for a good number.

We have a major assisted living project finally get into construction after months of value engineering. We were working really hard in order to achieve an acceptable construction budget.

We completed several acquisitions including securing a new development site for a high rise project.

But not everything went according to plan.

The podcast has been very successful this year on many levels. My goal from the beginning was to produce one piece of quality content each day. It didn’t matter where in the world I was located, I always found an internet connection to upload a show. If I happened to be at sea for a few days, I would upload a few shows in advance so that they would publish on schedule. I truly appreciate the feedback from you the loyal listeners. It makes me happy to know that the show is having an impact. You have downloaded more than 500,000 episodes and counting. That’s awesome and I recognize that your time is valuable.

My wife and I ran an experiment of what it would be like to live on board a boat for 3 months of the year. It was not a vacation, just a different living arrangement. There were mixed results. My work productivity definitely suffered during those months. I learned a lot about myself, and my own habits during those months in Europe. I lost about 15 pounds, managed to eat healthy, and exercised pretty much every day.

Once back at home, I struggled to establish my desired habits on a consistent basis. I wasn’t getting to the gym regularly. My daily meditation practice was not consistent throughout the year. Over the year I managed to successfully complete a number of projects. I put a few projects on the back burner, and brought laser focus to the ones that remained.

The purpose in conducting a retrospective is to extract the lessons from what happened in the past year and to express gratitude.

There are so many memories of the past year. It’s a little like mining for gold. The gold consists of those lessons that are hidden in all those memories. Like mining for gold, you need to sift through tons of rock and silt. Buried in the tailings from the mining operations are tons of things that serve no useful purpose. These are the emotional baggage that comes with emotions like regret, shame, fear. You can choose to hang onto the tailings, or you can choose to hang onto the gold.

As you think back on 2019, run your own retrospective on what work, what didn’t, and what did you learn.

Special Guest, Steffany Boldrini Dec 29, 2019

Show notes

Steffany Boldrini entered the world of real estate investing from a technology background in Silicon Valley. She is also the host of the Commercial Real Estate Investing From A to Z Podcast. She can be reached at www.montecarlorei.com.

George Ross on Goal Setting Dec 28, 2019

Show notes

On today's show I'm asking George how to set expectations with myself and stakeholders when projects are running late and I'm carrying some of my 2019 goals into 2020. Love his practical no-nonsense approach.

Flat Fee Real Estate Brokerage Business Dec 27, 2019

Show notes

On today’s show we’re looking at the efforts to disrupt the traditional real estate markets.

British company Purple Bricks announced earlier this year that they are pulling out of the US market. The company is one of several fixed fee brokerage companies that have tried to penetrate and disrupt the traditional residential real estate brokerage industry. The heavy use of software, combined with minimal services was supposed to lower the cost base for consumers.

Purple Bricks charges homeowners a fixed fee for listing a property on the MLS, whether or not a property is sold.

Purple Bricks tried to differentiate by offering exclusive territories to its agents based on postal code.

Part of the argument in favour of fixed price listing services is that in a hot market when any property listed will sell, often over asking price. The listing agent isn’t doing much work to earn their commission. The buyer agent has to take their clients on multiple showings, and draft multiple offers, the majority of which are rejected. It’s the buy agent that does all the heavy lifting. In a buyer’s market, during a downturn, the roles are reversed and the listing agent does the heavy lifting.

In the traditional model, the seller pays the entire commission which is split between the buyer agent and the seller agent. The fixed fee model charges a fixed fee for listing a property. The fee paid to a buyer agent is in addition to the fee paid for the listing. The traditional brokerage commission in the US is 6% of the selling price. This is usually split between the buyer and seller agent.

In some hot Canadian markets like Toronto, listing agents have fought back against the flat fee offerings by discounting the listing service. The still pay the full 2.5% commission to the buyer agent, while discounting the sell side commission to 1.5%, or in some cases as low as 1%.

In 2018 Canada’s Comfree was purchased by UK based Purple Bricks for $51 million dollars. Under ownership of Yellow Pages, the company didn’t experience a lot of growth, as evidenced by the fact that they sold the business basically for what they paid for it two years later.

Purplebricks Group Plc‘s stock climbed after the online estate agent said it was pulling out of the U.S. The company shares had lost 75% of their value since it ventured across into the US market in September 2017. The investment in the US expansion was bleeding the company of its resources and profitability was too far off in the future for investors and the board to accept.

The stock has regained some value since the decision to focus on its more-established U.K. and Canada businesses.

Purplebricks CEO said a “significant opportunity to disrupt the U.S. market,” remains, but it would take “substantially more management time and resources than the company is able to commit at this time.” The Solihull, England-based company reported a full-year operating loss in the country of 34.1 million pounds ($42.9 million), wider than the 16.8-million pound loss a year earlier.

According to the national association of realtors, flat fee transactions accounted for about 2% of home sales in the United States in 2018.

Another California startup called Reali set up shop in San Francisco. They’re offering a flat fee listing service at just under $5,000 for the service. Paying the buyer agent’s commission, if there is a buyer agent would be on top of the flat fee.

The problem with discount brokerages is that they assume a high volume of transactions in order to pay for the overhead associated with the business. In a market downturn when sales volumes drop, the cost of carrying the fixed overhead doesn’t change. We’ve seen many large discount brokerages fail in market downturns which is why they don’t survive in my opinion.

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