The Real Estate Espresso Podcast

Latest Episodes:

Value Engineering Interior Finishes by Shopping The World For Value at Turkeybuild Apr 22, 2024

Show notes

Discover cost-saving techniques for construction projects on the Real Estate Espresso Podcast. Join Victor J. Menasce as he delves deep into three aspects of interior finishes, revealing how to cut costs without sacrificing quality. Learn from real-world examples at Turkey's national Builder Expo and explore practical insights to enhance your construction budget. Tune in for expert guidance on value engineering and maximizing savings in today's challenging construction landscape

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Host: Victor Menasce

email: podcast@victorjm.com

Value Engineering Unveiled: Live Insights from TurkeyBuild. Apr 21, 2024

Show notes

Join us for a special weekend edition of the Real Estate Espresso Podcast, broadcasting live from the TurkeyBuild Expo in Istanbul. Host Victor Menasce takes you on a captivating walking tour through the exhibition halls, uncovering groundbreaking innovations in interior finishes and construction materials. From revolutionary facade systems to cost-effective flooring solutions, discover firsthand how value engineering can transform your projects. Tune in for exclusive insights and actionable strategies to optimize your construction budget and enhance project quality.

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Host: Victor Menasce

email: podcast@victorjm.com

Navigating Insurance Minefields with Aaron Letzeiser Apr 20, 2024

Show notes

Aaron Letzeiser is based in Chicago Illinois where he specializes in helping rental property owners secure the right kind of insurance coverage. On today's show we are talking about a few strategies that can help reduce the ballooning cost of insurance.

To connect with Aaron, visit obieinsurance.com

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Host: Victor Menasce

email: podcast@victorjm.com

Observations From Istanbul Apr 19, 2024

Show notes

I’m currently in Istanbul Turkey for their annual builder expo. This is a massive show with over 10 exhibition halls and they report that more than 52,000 people will attend the expo. I’ll do a separate show later this week specifically on the expo.

On today’s show I’m sharing my observations about Turkey. I have visited several cities in Turkey over the years including Izmir, Istanbul, Anatolia, Kusadasi, and Effesus.

It’s been about 5 years since I was here last and maybe 10 years since I spent any considerable time here. The first time I visited Istanbul I was 12 years old. I’ve seen the city grow up so to speak.

Today, Istanbul is a very modern city. It is also a very populated city with over 15M people.

I’ll have more to report in the coming days about the builder Expo.

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Host: Victor Menasce

email: podcast@victorjm.com

Italy Drowns In It's Punch Bowl Apr 18, 2024

Show notes

Today’s show is another example of out of control government spending.

Italy's government said on Tuesday fiscal incentives for home renovations had had a "devastating" impact on public finances over the last four years and were to blame for the expected rise in the country's massive public debt through 2026.

The plan offered to pay homeowners 110% of the cost of energy saving renovations. Another project promised to cover 90% of the cost of improving the facade of a building.

The government underestimated the scheme's appeal, but also made a number of other errors.

With such generous handouts, homeowners had no reason to negotiate with builders over costs. On the contrary, since the rebate exceeded the actual cost, higher costs meant more money was left for the homeowners in their pocket.

This effect was so predictable that you could see it coming from miles away.

Asked why they got their forecasts so wrong, officials involved in the budgetary planning have said they had no precedent to draw on as no one outside Italy had ever offered to refund more than the costs of the renovations. I’m sorry this is just plain stupid.

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Host: Victor Menasce

email: podcast@victorjm.com

How To Structure An Investment Offering Apr 17, 2024

Show notes

On today’s show we are talking about how to determine the structure of an investment offering.

We often hear about the so-called 2 & 20 formula that is popular among fund managers. When we say 2 & 20, that refers to a 2% asset management fee measured on the value of the fund, plus a 20% carried interest in the ownership of the fund. For many funds, that 2% fee is an annual fee. Over a 10 year life of a fund, that fee can amount to 20% of the original investment. That means the investors get 80% of the profits in the fund. Naturally, for that formula to work, the fund needs to generate enough returns for the investors to more than make up for the fees being charged by the fund manager. In publicly listed funds that are considered liquid, fund managers sometimes charge a 7% up front fee. Investors can sell at any time after the first year, but clearly they are going to pay a penalty for selling early.

That’s in the world of mutual funds. The fund managers are merely placing money in operating businesses. They perform their due diligence on the investments and they sprinkle their funds across a number of investments. The fund manager doesn’t do any of the heavy lifting associated with running the active businesses.

In the world of real estate investments, sometimes that can be a fund which will invest in several projects.

More often, the investment is in a single asset. It might be an apartment complex or a storage facility or a land development, or an industrial building. This requires active management of the businesses. I sometimes see the same 2 & 20 being applied to single asset investments.

But in truth there is no real industry standard. Whatever structure you can imagine and investors will embrace can work, of course as long as it is compliant with securities regulations. On today’s show we are going to talk through the thought process that goes into determining how to design an investment offering.

How To Verify A Construction Budget Estimate Apr 16, 2024

Show notes

On today’s show we are talking about how to scrutinize a quote for construction.

Earlier this week we received a budgetary estimate for a new construction project. Needless to say, the price was high relative to what we were expecting. So now that you have an estimate, how do you dig in and scrutinize where it is off base?

This falls into a category called “know your numbers”. That means knowing your numbers at a detailed level for specific line items.

I’m going to take you through a few specific line items, not to get lost in the details of this particular project, but rather to understand the thought process inherent in this kind of work.

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Host: Victor Menasce

email: podcast@victorjm.com

Aluminum Wiring Can Burn Your Home Apr 15, 2024

Show notes

On today’s show we are talking about aluminum wiring in apartment complexes. This was common from the 1960's to the mid 1970's. About 2 million housing units are estimated to still have aluminum wiring. Some insurance companies will decline to insure your building if you have aluminum wiring and those that remain will charge extra. But there are a couple of remedial solutions.

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Host: Victor Menasce

email: podcast@victorjm.com

Flex Industrial with Grant Reaves Apr 14, 2024

Show notes

Grant Reaves is based in the deep south where he invests in Flex Multi-Tenant Industrial. On today's show we are talking about his strategy for adding value to these types of buildings. To connect with Grant and to learn more, visit Stoic Equity Partners at stoicep.com or email him directly at greaves@stoicep.com

Waiting It Out with Dan French Apr 13, 2024

Show notes

Dan French is based in Austin Texas where he has amassed a portfolio in excess of 17,000 units investing in multi-family apartments throughout the South and Southeast. He divested of the majority in 2019 when it appeared that market was overheated and has been sitting on the sidelines ever since. On today's show we are talking about the market cycle and how being patient has proven to be a virtue. To connect with Dan and to learn more, visit atxacquisitions.com or call him directly at 845-629-1808.

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Host: Victor Menasce

email: podcast@victorjm.com

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