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We have seen a large decrease in the value of crypto-currencies. That’s both bitcoin, etherium and the thousands of other coins out there that make up the eco-system. The question is, how has the crypto market influenced the labor market? We know that in 2020 and 2021, government stimulus has created an incentive for people to collect a pay check and not work. That is reflected in the large reduction in workforce participation, and the huge number of job openings, particularly in the retail service sector including hospitality, food and beverage. When those bartenders, waiters, line cooks were sitting at home watching netflix, they were also dabbling in bitcoin. Several restaurant owners I’ve spoken with have witnessed a sudden and recent return to work from people who all of a sudden decided that waiting tables was not such a bad idea after all. Is this a result of the combination of stimi-checks having dried up, and now crypto can no longer fund their lifestyle? --------------- Host: Victor Menasce email: podcast@victorjm.com
Dana Samuelson

Dana Samuelson

2022-06-2609:14

Dana Samuelson is a real expert when it comes to physical gold. On today's show we're talking about how physical gold can be an effective hedge against inflation. You can actually purchase physical gold from within the US at Dana's company American Gold Exchange. To connect visit amergold.com or email info@amergold.com.  ------------------ Host: Victor Menasce email: podcast@victorjm.com
Robert Helms

Robert Helms

2022-06-2508:00

Robert Helms is the host of The Real Estate Guys Radio Show, and the organizer of the annual Investor Summit, now in its 20th year. On today's show we're talking about how to make sense of the current economic environment.  ------------------ Host: Victor Menasce email: podcast@victorjm.com
Construction Chaos

Construction Chaos

2022-06-2404:56

On today’s show we are talking about bad behaviour in the world of construction. When you are building anything in the world of construction, whether it’s a light renovation or a high rise building, you will experience the full spectrum of responses from suppliers and trades people. You would think that the best prices are found in the volume market and with those suppliers who serve the largest builders. I believe that to be true. But the best pricing is truly reserved for those few large builders. I recently compared the pricing at a commercial lumber supplier with the big box stores. It pays to shop around. We have received a wide range of quotes for all manner of products and services. We are experiencing all kinds of quotes that span the spectrum. Some of these are outliers that simply defy logic. It’s easy to wonder whether these quotes are the new normal. Am I out of touch, or is the architect out of touch? It’s frustrating to waste time talking to people that are not a fit for your project. But the best thing to do is to let go of any emotional baggage associated with those interactions and not allow the memory to influence future interactions with high quality suppliers that you ultimately want to work with. It is truly the wild west out there at the moment. You can expect to have to talk to more people than ever before in order to find subcontractors that you can work with. This will take more time. It will require you to dedicate more resources to shopping around than might ever have been your practice in the past.
Stocks To Fall Further

Stocks To Fall Further

2022-06-2305:151

On today’s show we are talking about my forecast for the stock market this year. Why are we talking about the stock market on a real estate investment podcast? Many investors are investors first and real estate investors second. I happen to be one of those people who has lost faith in the inner workings of the stock market and am heavily weighted in real estate, but I’m not exclusive to real estate. I also hold hard assets like precious metals. I don’t invest in the stock market because I understand it. I’ve been an officer of a publicly traded company. I’ve watched the CEO of my company go on Jim Cramer’s TV show and lie to the investing public. I’ve seen how little control the investing public has. ---------------- Host: Victor Menasce email: podcast@victorjm.com
On today’s show we’re talking about the use of digital tokens for trading real estate. Over the past week I had numerous discussions with people making investments to create a digital token platform that would allow for the derivative trading of fractions of real estate or shares in exempt market offerings. I personally know of at least five companies that are making investments to develop the token technology to trade in real estate and in securities offerings. The theory goes something like this. Once real estate is carved up into tokens that can be as small as the mind can imagine, these fractional shares become liquid and tradable on a secondary market. The technology allows for the transacting of tokens in the blink of an eye. The underlying technology can be used for anything. You can certify the authenticity of a token by virtue of the distributed nature of the way the token is created. There are literally thousands of copies of the token distributed across computers all over the world. This construct makes tampering with a token practically impossible since you would need to tamper not only with the local copy in your possession, but with the thousands of copies in existence whose whereabouts you have no idea. What these tokens represent is a matter of definition. You could use them to trade baseball cards, concert tickets, works of art, a Rolex watch, literally any meaning you wish to attach to a token as a certificate of authenticity. As someone with a technology background, I believe the underlying technology has a lot of promise to lower the transaction cost and revolutionize many types of commerce that don’t exist today. The problem I see with tokenizing securities is that securities are governed by a complex fabric of securities regulations with multiple jurisdictions each of which can be slightly different. The issue of compliance requires using the existing rules and regulations. The securities Act of 1933 generally doesn’t allow for the trading of exempt securities, depending on the exemption. The requirement to comply with existing regulations means that the digital token system would need to parallel the paperwork required to comply with securities regulations. Until the SEC, and all of the state and provincial securities regulators recognize digital smart contracts that are possible using digital tokens, the benefits of digital tokens will be completely negated by the need to comply with existing regulations. --------------- Host: Victor Menasce email: podcast@victorjm.com
What Should I Do?

What Should I Do?

2022-06-2105:30

On today’s show we’re talking about a question that is on everyone’s mind. Construction prices are rising. Interest rates are rising. Not only are rates rising, but it looks like lender liquidity is shrinking. Rents are rising, but who knows for how long? Salaries are rising for now, but could flatten or even decline if we experience an economic downturn. Will that apartment project be affordable when it’s completed in two years from now? An economic recession seems all but certain. The question is, how do you underwrite a project in these market conditions when so many of the critical variables seem to be so uncertain? I just came back from the 20th annual Investor Summit on Sand and these questions and more were the topic of seemingly every conversation whether it was over breakfast, or dinner, or late at night. Almost all of the 282 attendees are trying to make sense out of it. We had Danielle DiMartino Booth, who worked at the Federal Reserve Bank of Dallas for nine years provide us with an insider perspective on the most recent announcement last week from Federal Reserve Chairman Jerome Powell. If you would like to see a replay of her talk, click the link ---> https://fb.watch/dHcuFbbHe6/ -------------- Host: Victor Menasce email: podcast@victorjm.com
Energy Insecurity

Energy Insecurity

2022-06-2005:56

On today's show we're talking about energy insecurity and why we can expect to see continued high energy prices well into 2023. ------------------ Host: Victor Menasce email: podcast@victorjm.com
David Morris

David Morris

2022-06-1907:021

David Morris is based in Birmingham, Alabama where he is part of the core team specializing in EQRP. They also have a construction manufacturing project that when completed will deliver high volume construction components into the home building industry. To learn more or to connect with David, email him directly at david@eqrp.co.  ---------------- Host: Victor Menasce email: podcast@victorjm.com
Axel Monsaingeon

Axel Monsaingeon

2022-06-1811:20

Axel Monsaingeon is based in Montreal Canada and is developing on Main Street in a small resort town North of the city. He purchased a building that burned to the ground a few weeks below closing and is dealing with the complexity of remediating what is now considered an environmentally contaminated site. Today's show is a lesson in what can happen when the unexpected happens. To learn more or to connect with Axel, visit realestateeffect.ca ------------------- Host: Victor Menasce email: podcast@victorjm.com
On today’s show we are talking about shifts in economic data that are coming fast and furious. The economic indicators are changing faster than at any time I can remember. In fact there are so many things happening right now that it was somewhat difficult to decide what to talk about today. We’ve just had a historic interest rate increase on Wednesday of this week. The words of Jerome Powell have been headline makers. They have been picked apart and analyzed. For me, the biggest tell in that story is that there were no questions in the question period regarding the housing market. Sometimes these economic indicators are changing daily. But we’re not going to talk about the interest rate increase. Instead we’re going to examine why The National Association of Realtors continues to assert that there is a shortage of nearly 6.8 million homes across the United States. In fact, this statistic has been quoted in the news for an entire year and is almost widely accepted as fact. In fact that first report came out on June 16, 2021. Since then, the association has continued the narrative that the nation needs another 6.8M units. However, these statistics fail to hang together when you look at the data on a local level. The key to this story is understanding demographics. ---------------- Host: Victor Menasce email: podcast@victorjm.com
Rising Cap Rate Risk

Rising Cap Rate Risk

2022-06-1605:13

On today’s show we are looking at the question of whether value add strategies can be effective in an environment of rising interest rates. This realization came from a discussion with Ken McElroy, legendary investor and principal at the MC Companies. We went through a thought experiment about a simple value add project that would be representative of a typical apartment turnaround project. ------------------------ Host: Victor Menasce email: podcast@victorjm.com
The housing market has taken a huge hit this year as mortgage interest rates have surged and homeowners scale back on purchases. The latest casualties in the property technology world are Redfin and Compass, which both announced layoffs today that combined amounted to about 920 people. In a letter to employees and published on the company website, the CEO Glenn Kelman wrote and I’m going to quote a portion of the letter. ------------------- Host: Victor Menasce email: podcast@victorjm.com
On today’s show we’re talking about about how to navigate construction debt in the current rising interest rate environment. But before we talk about rising interest rates, we need to talk about the kind of debt you may want to use for your projects. There are so many different types of debt. On today’s show we’re going to talk about the ones we like to use and which ones we use with extreme caution We believe that in a rising interest rate environment, all borrowers need to be careful. When people think of borrowing, the most common source is a bank. In our experience, banks tend to have very narrow lending criteria. They are generally offering the lowest rates, but often have terms that are not a fit for your projects. ------------- Host: Victor Menasce email: podcast@victorjm.com
We’re going to look at a sale offer of a commercial office building and we’re going to dissect the viability of this offer. The seller in this case is offering to sell a property that has an as-is appraisal for nine million dollars from a major brand name commercial brokerage house and appraisal firm. The seller purchased the building a couple of years ago for 5 million dollars. He is willing to seller finance the building with $750,000 in secured debt and another $2.25M in forgivable debt that would be unsecured. The offering prospectus has a plan to convert the building to residential, and the assertion is that the building would be worth $17M after the conversion is complete and leased up and stabilized. The building is currently 50% occupied. The question is whether this offer is a good deal? ------------------- Host: Victor Menasce email: podcast@victorjm.com
Isabel Guarino Smith

Isabel Guarino Smith

2022-06-1214:451

Isabel is based in Phoenix Arizona where she owns and operates a portfolio of residential assisted living homes. She also runs the RAL Academy which has trained thousands of owners and operators how to develop and run successful residential care homes across the nation. To learn more, and to connect with Isabel, visit RALAcademy.com.  --------- Host: Victor Menasce email: podcast@victorjm.com
Noel Walton

Noel Walton

2022-06-1113:281

Noel Walton is based in Killeen Texas, home of the US Army's Fort Hood where he and his colleagues have formed "The Joint Chiefs of Real Estate" (JCORE). They are investing in multi-family assets and are bringing military discipline to the world of real estate investing. To connect or to learn more, visit jcoreinvestments.com ----------------- Host: Victor Menasce email: podcast@victorjm.com
On today’s show we’re talking about how this business looks easy from the outside. I had dinner with an investor last night and they kept marvelling at how easy we made these huge projects look from the outside. Well, I’m here to tell you that nothing could be further from the truth. Today’s show is all about problems. Problems, problems, problems. They seem to be everywhere. Let’s be clear. This is not whining or moaning and groaning. Although to some, it may sound like whining from a distance. Real Estate development projects are conceptually simple. But it’s the thousands of details and regulations spanning everything from design, to construction, to capital to entitlements and tax. Each of these steps represents an opportunity for a problem. On today’s show I’m going to just touch on a few. ------------ Host: Victor Menasce email: podcast@victorjm.com
On today’s show we are talking about how to navigate economic cycles. In a rising market, everyone looks like a genius. The rising tide lifts all boats and celebrations abound each passing month. Some of that is real wealth creation, and some is paper wealth creation that might take a very long time to realize. We are absolutely in a destructive environment for many on a global basis. At the same time as we are experiencing supply side shocks to the economy, our government and central bankers are trying to tame inflation by increasing interest rates to reduce demand. An interesting thing has happened during this economic cycle in real estate. We have not lowered our standards for underwriting in order to meet the more competitive market environment. We know that economic cycles happen. The cause might be unknown. The timing is unknown. The depth is unknown. But you know that there will be an up cycle and a down cycle. Anything you do in the world of real estate investing has to be designed to span economic cycles. When you buy a building and sign a loan agreement with a 25 year or a 35 year amortization, you know that there is going to be a recession during that period. There might be three recessions or maybe five recessions during that period. Nobody knows how many. But you had better design your project to survive those up and down cycles. ----------------- Host: Victor Menasce email: podcast@victorjm.com
There are numerous articles out there in the mainstream media ranging from the Wall Street Journal to Fortune Magazine stating that we are now in a completely different market compared with the past two years. The articles then go on to assert that we cannot rely on historic data for comparable sales because the market conditions have changed. On today’s show we are asking the question about whether we truly are in a new housing economy? What methods can we use to determine property value? If you ask any appraiser, they will assert that the traditional method of valuing property looks at a trio of methods. Comparable sales Replacement cost Multiples of net income Professional appraisers look at all three of these metrics and then decide which of the three should take precedence in the specific circumstances for a subject property. --------------------- Host: Victor Menasce email: podcast@victorjm.com
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