The Real Estate Espresso Podcast

A few weeks ago we spoke about the surge in residential real estate in parts of Florida. Inventories are up in several markets. But we are also seeing a surge in condos appearing on the market in South Florida. In fact, the condo sale inventory is up 90% in South Florida and the volume of transactions has fallen through the floor. The number of sale transactions was the lowest it has been since 2012 which was at the bottom of the GFC. We now have 8 months of inventory for condos as compared with last year and the sales statistics for 2024 to date are even lower than 2023. Naples Florida has 12.5 months of supply in the condo market compared with 3.8 months at the same time last year. Active inventory is up 204%. Sarasota has 3,600 condos for sale, an increase of 87% compared with the same time last year. Tampa has a 6100 condos for sale. These numbers were not seen since 2011. The redneck Riviera is also seeing a surge in inventory. Pensacola’s inventory is up 148%. Destin has 11.7 months of inventory. We’re talking strictly the condo market. But Florida has a unique situation. If you remember the Surfside condo building that collapsed three years ago killing 98 people, the state of Florida implemented two new sets of regulations aimed at improving the safety of condo buildings. The first regulation instituted mandatory engineering inspections of condo buildings on a prescribed schedule. The second regulation implements a strict set of guidelines for the condo corporation’s reserve fund. These two factors are causing condo fees to increase, on top of the rising expenses associated with insurance. This is resulting in special assessments of in many cases tens of thousands. ----------------- **Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1) iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613) Website: [www.victorjm.com](http://www.victorjm.com) LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce) YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734) Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso) Email: [podcast@victorjm.com](mailto:podcast@victorjm.com) **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com) Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital) Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)

On today’s show we are talking about what in some locations is a scarce resource. The headlines decry shortages of fresh water. Certain water sheds have been abused over the past century. The Colorado River is one example of those powerful rivers that seemed limitless. It flows through 7 states and 2 states in Mexico. So many communities along its path would not exist if it were not for the water supplied by the Colorado River. The Colorado river has been so exploited that it no longer reaches the Pacific Ocean. But the truth is that the planet is covered by 70% water. We are not going to run out of water any time soon. I know what you’re thinking. The oceans are salt water and we need fresh water. Fresh water is basically ocean water that has been distilled through the process of evaporation and then being deposited in the form of rainfall. Some areas are blessed with more rainfall than others. We often hear about problems with wastewater sustainability. The fact is, water is incredibly cheap to turn into drinking water. We tend to think of it as expensive. But in truth, it is very inexpensive. Reverse osmosis technology has been around for a long time. What we are really talking about is the amount of energy required to purify the water. Let’s put this into the context of a domestic water bill. If you are starting with a fresh water supply and then the city puts the water in reservoirs, purifies and treats the water, distributes it in pipes to all the homes, and then collects all the wastewater and treats the wastewater. In the city of NY, this comes to 1.7 cents per gallon to supply the water and then to collect and treat the wastewater. The energy required to produce a gallon of water through reverse osmosis is 0.4 cents per gallon. So if we had to treat the water and the wastewater the same as today and then insert a reverse osmosis system to purify sea water, we would be talking about increasing the cost of producing fresh water from 1.7 cents per gallon to 2.1 cents per gallon. This is hardly the crisis of the century that threatens the very existence of the human race. -------------- **Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1) iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613) Website: [www.victorjm.com](http://www.victorjm.com) LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce) YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734) Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso) Email: [podcast@victorjm.com](mailto:podcast@victorjm.com) **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com) Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital) Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)

On today’s show we are taking a look at the most recent announcement from the Bank of Canada. Today the Bank of Canada lowered its benchmark rate by 0.25% to 4.5%. That means the US and Canada have a full percentage point difference between the benchmark lending rates of the two central banks. This makes for two back to back rate cuts in Canada. The Bank of Canada cut its key lending rate by 0.25 back in June. The message from the Governor of the Bank of Canada was that lower rates were appropriate in order to stimulate economic growth. The economy is generally weak. Debt levels are nearing record levels and higher interest rates are making housing increasingly unaffordable. Inflation fell in June after a small bump in May. In June the inflation rate was at 2.7% on an annual basis. It’s still above the central bank’s 2% target, but the falling demand in market seems to be having a disinflationary impact on a broad set of goods. This means that real estate investors are starting to see some relief. The yield on the commercial mortgage bond has been dropping steadily over the past month. As of today, the 5 year CMB is yielding 3.54%. The best commercial financing available in Canada is priced 0.35% higher which would put the interest rate at 3.89%. That’s a very good rate and is considerably better than rates that most US investors are getting from agencies like Fannie Mae and Freddy Mac which today are pricing at 5.82%. That’s nearly a 2% spread between commercial mortgage rates in Canada versus the US. ------------- **Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1) iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613) Website: [www.victorjm.com](http://www.victorjm.com) LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce) YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734) Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso) Email: [podcast@victorjm.com](mailto:podcast@victorjm.com) **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com) Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital) Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)

On today’s show we are talking about cognitive dissonance. Cognitive dissonance is the discomfort a person feels when someone's behaviour does not align with their values or beliefs. Cognitive dissonance occurs when a person holds two contradictory thoughts at the same time. Here’s an example. Ice cream is bad for me. I want some chocolate ice cream. These two thoughts are seemingly at odds with each other. --------------- **Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1) iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613) Website: [www.victorjm.com](http://www.victorjm.com) LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce) YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734) Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso) Email: [podcast@victorjm.com](mailto:podcast@victorjm.com) **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com) Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital) Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)

On today’s show we are talking about mission critical systems and the design principles that sit at the core of these systems. We keep hearing about catastrophic outages of key infrastructure. A few weeks ago the city of Calgary was facing a severe water outage. Over the past month, the network of Chrysler auto dealerships was facing a system wide outage that persisted for several days. This past week, the vulnerability was punctuated by the flawed software update rolled out by cyber security firm Crowdstrike. The Crowdstrike update affected airlines, banks, retailers, and countless other businesses. Thousands of flights were canceled over the past three days and the airline industry has still not recovered. In order to create a system that is tolerant of failures, there are two main principles that must be followed. No single point of failure means that you have to design redundancy into your system. If your internet service comes from a single provider, then you have a single point of failure. Maybe you should have more than one internet service provider so that if one goes down, the other should still be in service. But if the optical fibre for both carriers travels through the same conduit, then that single conduit could become your single point of failure. Resilience is the result of a way of thinking that starts with identifying those single points of failure. ---------------- **Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1) iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613) Website: [www.victorjm.com](http://www.victorjm.com) LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce) YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734) Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso) Email: [podcast@victorjm.com](mailto:podcast@victorjm.com) **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com) Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital) Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)

On today's show we are talking about why many people fail to achieve their goals. There is a distinct process that results in a better track record for achieving goals. You're invited to our annual goal setting retreat coming up on November 10. This intensive workshop requires focus and hard work in order to set great goals. To learn more, send an email to podcast@victorjm.com and put the word Goals in the subject line. ---------------- **Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1) iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613) Website: [www.victorjm.com](http://www.victorjm.com) LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce) YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734) Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso) Email: [podcast@victorjm.com](mailto:podcast@victorjm.com) **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com) Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital) Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)

John David is based in Miami Florida where he assists developers with public relations on a nation wide basis. On today's show we are talking about the strategies that are most effective when dealing with community opposition to projects. To connect with John, visit davidpr.com --------------- **Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1) iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613) Website: [www.victorjm.com](http://www.victorjm.com) LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce) YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734) Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso) Email: [podcast@victorjm.com](mailto:podcast@victorjm.com) **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com) Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital) Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)

On today's show we are talking about how the US Federal Government manages and disposes of about 1/4 of the entire land mass of the United States. There is a handy report published by the Congressional Research Service which summarizes all of this. The report can be found at https://crsreports.congress.gov --------------------- **Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1) iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613) Website: [www.victorjm.com](http://www.victorjm.com) LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce) YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734) Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso) Email: [podcast@victorjm.com](mailto:podcast@victorjm.com) **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com) Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital) Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)

On today’s show we are taking a look at what the bond market might be signalling when it comes to the US economy and the global economy. We have known that the yield curve has been inverted for a record period of time, more than 2 years as of now. An inverted yield curve happens when the short term interest rates are higher than long term interest rates. The classic metric has compared the yield between the 2 year and the 10 year treasury bond. Today the 2 year and the 10 year bond are still inverted. We still have an inverted yield curve against that definition. However, the yield spread between the 2 year and the 30 year has actually normalized and is no longer inverted. Of course that might change again in the next day, or even in the next hour and re-invert. But for now we have a short term rate below a long term rate. Yields for the 2 year have fallen, and for the 10 year and even for the 30 year. All of these rates have fallen. The only one that has stayed the same is the Fed Funds rate set by the Federal Reserve in the range of 5.25%-5.5%. It’s not natural for long term interest rates to be lower than short term rates. You can’t see as clearly far into the future. That risk and uncertainty associated with the longer timeframe suggests that a risk premium would be warranted. The memory of 2008 has faded for many. Most remember it today as a real estate crisis, confined to subprime mortgages. But the tentacles of 2008 were much wider. There were millions of job losses, large scale bankruptcies, bank failures, stock market declines. The wealth destruction that occurred during that period was a global financial earthquake. Too many people are pushing forward today as if there are no risks in the market. We will see lower interest rates in our future, and higher interest rates at the same time. The rates for the safest investments will come down. But those perceived to carry a risk premium will face even more expensive money, even as interest rates fall. This is the fallacy associated with looking to a single rate as a determinant of our financial future. --------------- **Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1) iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613) Website: [www.victorjm.com](http://www.victorjm.com) LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce) YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734) Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso) Email: [podcast@victorjm.com](mailto:podcast@victorjm.com) **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com) Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital) Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)

On today’s show we are talking about underwriting of residential apartment properties. I look at financial models from other developers on a regular basis. I tend to see the same mistakes over and over again. On today’s show we’re going to cover the top 7 omissions that I see in financial models. When these assumptions are incorrect, then there is very little the property owner can do to recover from these mistakes. The reality will be different from the financial model and the owner will be forever stuck with explaining to investors why the cash flow from the property is not meeting expectations. ------------- **Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1) iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613) Website: [www.victorjm.com](http://www.victorjm.com) LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce) YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734) Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso) Email: [podcast@victorjm.com](mailto:podcast@victorjm.com) **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com) Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital) Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)

Building a business is difficult. That’s true of all businesses, regardless of the industry. It takes hard work to build a team and to figure out what works and what doesn’t work. There will be mistakes along the way and corrective action and if not then the business will probably fail. Then there are those people who look for a misguided shortcut. Working with experienced people is the key to compressing timeframes and accelerating learning. Hopefully you make fewer mistakes. --------------- **Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1) iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613) Website: [www.victorjm.com](http://www.victorjm.com) LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce) YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734) Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso) Email: [podcast@victorjm.com](mailto:podcast@victorjm.com) **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com) Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital) Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)

On today’s show we are talking about one more headwind that is facing the multifamily apartment market across the US. 2023 was a record year for new apartment completions. There were a total of 440,000 apartment completions in 2023 according to RealPage. Some other estimates put the number as high as 510,000 units. There are several markets that are oversupplied as a result of this surge in building. Demand dropped once the pandemic was over and we have seen the mobility in the US drop significantly. There are numerous hot markets that are experiencing a glut in new apartments. -------------- **Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1) iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613) Website: [www.victorjm.com](http://www.victorjm.com) LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce) YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734) Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso) Email: [podcast@victorjm.com](mailto:podcast@victorjm.com) **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com) Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital) Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)

Billy Brown is based in Nashville Tennessee where he works as a commercial mortgage broker. On today's show we are talking about the types of deals that are getting done, and where deals are struggling. To connect with Billy, visit billybrown.me --------------- **Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1) iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613) Website: [www.victorjm.com](http://www.victorjm.com) LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce) YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734) Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso) Email: [podcast@victorjm.com](mailto:podcast@victorjm.com) **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com) Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital) Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)

Jonathan Miller is based in Denver Colorado where he is part of the leadership team of a national wealth management practice called Parsonex. On today's show we are talking about what wealth management clients are looking for in terms of alternative investments. To connect with Jonathan visit parsonex.com ----------------- **Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1) iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613) Website: [www.victorjm.com](http://www.victorjm.com) LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce) YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734) Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso) Email: [podcast@victorjm.com](mailto:podcast@victorjm.com) **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com) Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital) Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)

What drove the Fed to change their tune? In the most recent testimony in front of a congressional committee, chair Powell spoke about getting closer to their stated 2% target. But clearly the numbers are still elevated. The restrictive monetary policy is serving to bring demand and supply into better balance and to put downward pressure on inflation. He said that moving too soon or too much could stall or even reverse the progress we have seen against inflation. In spite of this, Chair Powell said that there is a risk of reducing policy restrain too late or too little could unduly weaken economic activity and employment. For now they’re going to continue to monitor the data on a meeting by meeting basis and make decisions on a meeting by meeting basis. So why did the Fed change their stance? This is a very different posture from what we have heard over the past two years. This is one of those questions that seems to be eluding the mainstream media. -------------- **Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1) iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613) Website: [www.victorjm.com](http://www.victorjm.com) LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce) YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734) Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso) Email: [podcast@victorjm.com](mailto:podcast@victorjm.com) **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com) Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital) Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)

Today’s show is an observation based on years of a particular pattern repeating itself. When that pattern of progress is disrupted, people become dissatisfied and we start to experience fragmentation and chaos. There is an expectation that every year someone wants to get ahead. Even in an inflationary environment, people need to see their income increasing. We know that there is widespread discontent, not just in the United States. We see it in the United Kingdom, in France, in Canada, in Italy in China, and countless others. This kind of discontent leads to a fracturing of society and increase social turmoil. --------------- **Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1) iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613) Website: [www.victorjm.com](http://www.victorjm.com) LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce) YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734) Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso) Email: [podcast@victorjm.com](mailto:podcast@victorjm.com) **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com) Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital) Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)

Today’s question comes from Raffaele who asks: I have a project that is about to go into construction. The city is requiring me to pay a parkland dedication fee equivalent to 7% of the land value that the city can use in the future to build and maintain new parklands. We know what we paid for the land several years ago. That value has probably changed over time and will require a new appraisal to be determined. The value of land is often affected by the cost to get the land into a shovel ready state. What things do you think I can realistically ask the appraiser to take into account when determining the value of the land? --------------- **Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1) iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613) Website: [www.victorjm.com](http://www.victorjm.com) LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce) YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734) Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso) Email: [podcast@victorjm.com](mailto:podcast@victorjm.com) **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com) Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital) Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)

Today’s show is the second in our beginner series. Our listeners are sophisticated. Many of you own large portfolios of apartments. But you also have people in your life who are interested in learning more, but maybe don’t have access to high quality information. The idea of sending your spouse to a $199 weekend bootcamp for beginners where they are going to be abused by sleazy sales people sounds unthinkable. So where do they go. Look no further. We are going to dedicate a couple of shows a month to topics that will accelerate the learning for less experienced investors, and might give the most sophisticated investors a new way of explaining a concept that is otherwise complex to describe. So here we go. On today’s show we are talking about scale of investment, and why you might want to participate in a larger project versus going out and buying a single small investment by yourself. Real Estate investing is a game of big numbers. Everyone always runs out of money, I don’t care how much money you have, you’re going to run out at some point and you will need to borrow funds, or raise capital, or stay small. There are not enough hours in a lifetime to save your hourly wage to wealth. You are going to need to work with others in order to get leverage. If you’re already a billionaire, then congratulations. But for everyone else, you’re going to need to use other people’s money. ------------- **Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1) iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613) Website: [www.victorjm.com](http://www.victorjm.com) LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce) YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734) Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso) Email: [podcast@victorjm.com](mailto:podcast@victorjm.com) **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com) Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital) Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)

The Real Estate Espresso Podcast is a show that speaks to sophisticated investors. Many of our listeners have large portfolios of apartments. They are investors in storage, industrial, land. We have lenders, economists, developers, project managers for the major national commercial builders all amongst our listening audience. This is a sophisticated audience. You know what cap rate is, what yield is, what an interest rate inversion. But chances are, you the listener have a family member who is a stakeholder in your business, but maybe not an active participant in your business. We have been receiving feedback that from time to time, it would be great to provide some content that would accelerate the understanding for some of our less experienced audience members. Starting today, we are going to include two evergreen shows per month that include topics that are geared more towards the beginner audience. On today’s show we are going to talk about adding value to an apartment. We are often lead to believe that value is determined by the market. When you sell an asset like a single family home in the open market, the sale price is more like an auction than a scientific formula. In the world of multi-family investing, the most common measurement of value is the cap rate, or in other words the multiple of net income. But if the profit generated by the property goes up, then the value of the property would go up too in order to keep the value of the building constant at 5%. There are numerous ways the profit can increase. You can increase the base rent. You can reduce the vacancy which adds to the income. You can reduce expenses. You can add features to the property that can add revenue. For example, you might have a tenant rent a parking space from you in addition to their apartment. They might rent a storage locker. They might choose the building’s internet access instead of paying a monthly fee to AT&T. If the building has been improved, then you might be able to command higher rent. If the building was modernized with a new exterior facade, and new kitchens, new bathrooms, new flooring you might get an extra $200 a month in rent. If you got rid of the coin operated laundry in the basement and put laundry machines in each unit, you might get an extra $50 a month in rent. ------------------ **Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1) iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613) Website: [www.victorjm.com](http://www.victorjm.com) LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce) YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734) Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso) Email: [podcast@victorjm.com](mailto:podcast@victorjm.com) **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com) Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital) Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital) ---

Jeff is based in Austin Texas where he runs Visio Lending, a national lender that specializes in portfolio loans for single family investment properties. To connect with Jeff, visit visiolending.com --------------- **Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1) iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613) Website: [www.victorjm.com](http://www.victorjm.com) LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce) YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734) Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso) Email: [podcast@victorjm.com](mailto:podcast@victorjm.com) **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com) Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital) Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)