The Real Estate Espresso Podcast

On today’s show we are talking about the kinds of questions that are helpful when determining the scope of a project.  We are often given estimates by contractors for work to be performed. Those elements that have the largest variability continually seem to be related to site work.  I often experience sticker shock with these estimates.  The key to getting an optimized cost starts with determining the proper scope of work. If you’re simply negotiating with a contractor to lower their price, that’s a pretty blunt instrument. The contractor is going to feel squeezed and they are simply seeing their margin being eroded.  But if you approach the conversation from the perspective of making sure the contractor gets fairly paid for their work. You just want to make sure that we have a common understanding of the scope of work, that context usually changes the nature of the conversation. The bottom line number may actually increase in the event that the estimate is low.  In order to have a meaningful conversation about the scope of work, you need to be prepared to go deep with the contractor on the assumptions behind the estimate.  ------------ Host: Victor Menasce email: podcast@victorjm.com

Back in the 1960’s the first disposable diapers were introduced by Proctor and Gamble under the Pampers brand name. Cloth diapers had been the staple up until then and these new wonders were supposed to buy back time for new mothers who were previously saddled with massive amounts of laundry.  By the mid 1970’s, Kimberly-Clark, the makes of Kleenex introduced the Huggies brand of diapers. This alternative to Pampers started to gain market share. In the meantime, Proctor and Gamble also introduced another brand of diapers called Luvs. Throughout the years there were numerous innovations in diaper technology including different fasteners, better form fitting around the legs, increased gel content and so on. With each new innovation, the manufacturers had a choice as to where to introduce those innovations. Pampers had been the dominant brand. They owned the market. They were the world reserve currency of disposable diapers.  Huggies was there in the background with a distant second in market share.  ------------ Host: Victor Menasce email: podcast@victorjm.com

Virtually every apartment project is going to be constrained by parking. That one factor will determine the density that is going to be possible.  In rental apartments, charging for parking is going to very from one area to another.  For example in a dense urban area like NYC or Boston, it’s fairly routine to charge for parking. In fact, in cities like NY, I consider a car to be more of a liability than an asset. Those areas have very effective public transit and finding parking at your destination is going to take so much time that you would spend less time and less money if you simply took an Uber or a Taxi to your destination.  In less dense areas and in places where public transit is not deeply ingrained into the culture like in Texas or Arizona, a car is a must. The distances are too large and public transit simply is not an option. Except in the rarest of instances, parking is free. So when you are designing your apartment project, how much land should you allocate to parking? Well, you’ll be surprised to hear that it’s about the same as your floor area ratio.  By the time you factor in visitor parking and accessible parking, the parking ratio is going to be pretty close to 2 parking spaces for every apartment. Some projects are not going to be viable with less than a parking ratio of less than 1.75. I’m seeing cities create incentives to reduce the parking ratio below 1.0. In some cases I’m seeing ratios of 0.7 and 0.5. In places where there is public transit within walking distance, I’m seeing buildings approved with zero parking. I personally don’t think that the market will support those buildings in the long term. If someone wants to own a car at some point, they need to move. If they get into a relationship with someone who owns a car, that person faces the choice of parking or their new found relationship. Chances are they will have to move. This translates into higher tenant turnover.  Parking is a loss leader from the perspective of a developer. It is not a source of revenue, and is simply a necessary cost. 

On today show we are looking at whether increasing interest rates is effective at combatting inflation.  The theory is that when interest rates rise, people are encouraged to save money and benefit from the income that is available from those higher interest rates. This is particularly true if interest rates are higher than the rate of inflation, so that you get a real positive rate of return on interest-bearing instruments. When I think back to the early 1980s, I can remember conversations with my mother about putting my savings into high-yield bonds that were government-backed. I did not truly understand the math behind nominal interest rates versus real interest rates at the time I was particularly impressed when in that one year, I earned 18% interest on a $10,000 bond. For a teenager that $1800 in interest was a lot of money. In the late 1970’s the personal savings rate was around 9% and then in jumped in the early 1980’s to around 13%. These were the days when Pauli Volcker pushed Fed interest rates all the way up to 19%.  That steadily declined until it hit a low in 2005 of 1.4% and then another low again in 2007 of 1.9%.  We witnessed a bit of a recovery in personal savings through the 2010’s to about 8.5% in 2019. Then with all of the stimulus money during the pandemic, personal savings jumped to 32% in 2020, before falling down to 12%, and then spiked again to 26% in the second wave of the pandemic.  Personal savings rates are now down to 3.2% after nearly two years of rising interest rates. The increase in interest rates is not having the desired effect. People are not saving more. Not only that, credit card balances are through the roof. Revolving consumer credit increased to nearly $1.1T in the first quarter, up from $727B in April of 2021. This supposedly strong economy is being funded by credit card debt. People are running out of credit.  ---------- Host: Victor Menasce email: podcast@victorjm.com

Dr. Noah has written 25 books on the topic of helping entrepreneurs achieve breakthroughs. On today's show we're talking about what holds people back from achieving those breakthroughs. To connect with Noah, visit http://breakthroughwithnoah.com. He also has a new book out at http://sevenfigureexpertbook.com. The book is free if you cover the cost of shipping. ------------ Host: Victor Menasce email: podcast@victorjm.com

Today's show is an extract of yesterday's livestream where I'm making some predictions for the upcoming period and answering listener questions live. -------------- Host: Victor Menasce email: podcast@victorjm.com

Coming up later today at 5PM EDT, 4PM CDT, 3PM MDT, I'm going to be live on LinkedIn and Facebook giving my predictions for the upcoming period and opening up to live questions from the audience. To register and attend, visit https://www.linkedin.com/events/predictions-askmeanything7191469079046639616/about/ On todays show we are doing a dive into why sheltering from capital gains tax is not as simple as it sounds. There is nuance to the process and it can be more difficult unless you plan carefully. Let's be clear, I'm not offering tax advice. Talk to your CPA. I'm merely sharing my observations based on what I'm seeing in the market. ---------------- Host: Victor Menasce email: podcast@victorjm.com

Coming up on Friday May 3 at 5PM EDT, 4PM CDT, 3PM MDT, I'm hosting a live stream on LinkedIn Live. I'm going to be sharing my predictions for the upcoming period and then opening up to questions from the audience on any topic. To connect to the live stream, join me at 5PM EDT here: https://www.linkedin.com/events/predictions-askmeanything7191469079046639616/ On today's show we're talking about the FTC's recent ban on non-compete clauses in employment contracts. What does it mean for employers and for employees? -------------- Host: Victor Menasce email: podcast@victorjm.com

Coming up on Friday May 3, 2024 at 5PM EDT, 2PM PDT, I'm hosting a LinkedIn Live. I'm going to be sharing my economic predictions and opening up the session to questions from the audience. A great way to unwind at the end of the week. Here's the link to join the live https://www.linkedin.com/events/predictions-askmeanything7191469079046639616/ On today's show we're reviewing the book of the month. Our book this month was written in 49 AD by Seneca. It's an essay on the shortness of life, written to his father in law. It contains the wisdom of the ages and continues to be talked about, translated and interpreted nearly two thousand years later. ------------- Host: Victor Menasce email: podcast@victorjm.com

 I’m going to warn you in advance that today show is completely a conspiracy theory. Whether this conspiracy theory resonates with you or not, I leave entirely up to you. I’m here to convince you or anyone of anything. I am merely observing what I see in the marketplace, and trying to make sense out of it. Debasement of currency has been going on for centuries. During the Roman Empire, the metal in coins whether it was gold or silver in the Roman denarius was whittled away by progressive emperors. This was essentially a form of theft. Shaving the edges of the coins also became common practice. Modern day version of printing money simply involves the addition of a ledger entry in a database. ------------ Host: Victor Menasce email: podcast@victorjm.com

On today’s show we are talking about one of our banks being forcibly closed and sold to another bank in Philadelphia in an FDIC auction this past week. The bank is known as Republic Bank and is legally named republic first bank, not be confused with the very similar sounding and much larger bank called First Republic which failed last year. Republic Bank was a local Philadelphia bank with about 20 branches in Pennsylvania and New Jersey. It relatively new having been founded in 1988. In 2008 the bank switched from being a purely commercial bank to include retail banking.  Our experience with Republic bank was a good one. They wrote construction and permanent loans on several of our buildings in Philadelphia.  --------- Host: Victor Menasce email: podcast@victorjm.com

Andrew Hellinger has been developing landmark projects for a number of years. His most recent signature project is called River Landing and is located on the Miami River. On today's show we are talking about community building and designing of the community as an amenity. To connect with Andrew and to learn more, visit https://www.riverlandingmiami.com ------------- Host: Victor Menasce email: podcast@victorjm.com

On today's show I'm speaking with George about the financing of 40 Wall Street, a 75 story building located diagonally across from the NY Stock Exchange. George was responsible for the redevelopment of this iconic building in lower Manhattan when he was working for Donald. -------------- Host: Victor Menasce email: podcast@victorjm.com

Join us for an insightful Ask Me Anything (AMA) session focused on tax-efficient investment strategies in real estate development and investing. Victor dives into listener questions, addressing scenarios like inheriting property, navigating renovation costs, and optimizing tax benefits. While this episode offers valuable insights, it's important to note that it's not intended as tax advice. For personalized guidance, always seek the expertise of a qualified tax professional. Tune in to learn how to maximize returns and minimize tax burdens on your real estate journey

Welcome to the Real Estate Expresso Podcast, your go-to source for the latest insights in real estate investing. Join Victor Menasce as he explores the ongoing shortage of electrical components, delving into the factors driving this phenomenon two years after the initial supply chain disruptions of the pandemic. Discover why electric utilities and other sectors are grappling with sourcing challenges, and how the surge in demand for electrical infrastructure is reshaping the industry landscape. From the impact of weather events on transformer demand to the growing needs of electric vehicle charging stations, data centers, and solar power generation, Victor unpacks the complexities driving the shortage. Gain valuable insights into the dynamics behind the scenes, including the concentration of manufacturers, distribution channels, and the ripple effects of increased demand across multiple sectors. Tune in to stay informed and navigate the evolving landscape of electrical equipment availability ---------- Host: Victor Menasce email: podcast@victorjm.com

Join us on the Real Estate Espresso Podcast as we dive deep into the latest employment statistics, unraveling the complexities and revealing the true narrative behind the numbers. Host Victor Minasce scrutinizes the unemployment rate, shedding light on how government definitions and economic shifts shape our understanding of workforce dynamics. From the gig economy to high-paying tech jobs, explore the factors influencing employment trends and gain invaluable insights into the evolving job market landscape. Tune in for a comprehensive analysis that challenges conventional wisdom and illuminates the reality of today's employment landscape. ------------- Host: Victor Menasce email: podcast@victorjm.com

Explore a landmark US Supreme Court ruling safeguarding property rights on today's episode. Discover how this unanimous 9-0 decision, authored by Justice Barrett, reinforces constitutional protections under the 5th and 14th amendments. Join us as we delve into the crucial role of the court in interpreting and upholding the law, and contemplate the global implications of such legal precedents. ---------- Host: Victor Menasce email: podcast@victorjm.com

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 ----------- Host: Victor Menasce email: podcast@victorjm.com

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. ------------- Host: Victor Menasce email: podcast@victorjm.com

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 ----------- Host: Victor Menasce email: podcast@victorjm.com