The Real Estate Espresso Podcast

 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

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

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

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. 

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

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

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

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

Real Estate Investors are gritting their teeth at the moment. The benchmark SOFR remains steady, but the 10 year treasury which is the benchmark for permanent financing has risen sharply in the past week and hit a high of 4.65% yesterday. Many are wondering what is causing the bond yield on the 10 year Treasury to continue to rise. We are also seeing oil prices rising at a time when major parts of the world are experiencing economic slowdown. We also have gold reaching record highs.  The obvious questions are “Why?” And what does this mean?

On today’s show we are taking a look at the Macro economy. The bureau of Labor and Statistics published the latest CPI data which came in a bit hotter than expected. This is implying that the Fed will need to keep interest rates higher for longer to combat inflation. The Fed keeps saying that rates needs to be maintained higher for longer so that aggregate demand is reduced to stamp out inflation.  At least, if you read the mainstream media, that’s what they would have you believe.  The narrative is that the economy is still strong and that the GDP growth is high and unemployment is low.  In order to understand what is real in the economy we have to look closely at what is driving the economy.  When you look at all of the growth that has happened in the economy in the past year, it’s been as a result of increases in government spending. It's artificial growth, an illusion. --------- Host: Victor Menasce email: podcast@victorjm.com