The Real Estate Espresso Podcast

Sara Martin is an architect and project manager with HED specializing in design of data centers for high capacity computing installations. On today's show we are talking about the data center industry and the characteristics of a modern data center. To learn more you can visit hed.design or connect with Sara directly on LinkedIn at https://www.linkedin.com/in/sara-martin-7b61b546/ ------------ Host: Victor Menasce email: podcast@victorjm.com

On today’s show, we are looking at different types of money printing to understand the impact that money supply has on consumer price inflation. Have you wondered why we don’t have hyperinflation with the tens of trillions of dollars that are loaned into existence through the banking system? There is one school of thought that says all forms of inflation are rooted in debasement of the currency. That theory says that inflation is a monetary phenomenon that is the result of inflation of the money supply. The price increase we see is a symptom of the inflation and not the inflation per se.  ------------ Host: Victor Menasce email: podcast@victorjm.com

Today’s show is another AMA episode (Ask Me Anything) Allan asks: I have been listening to your show for about two years now and love the depth and variety of what you share. I’m amazed at how much you can pack into just a few minutes. My question is, what are your minimum deal standards when you consider a new development deal? I’m finding that the numbers are more difficult to make work in the current environment with the rise in interest rates? Have you altered your standards to make projects work? ---------- Host: Victor Menasce email: podcast@victorjm.com

On today’s show we are talking about how maturing cities handle growth and development.  There are two costs associated with growth. There is the initial cost, and then there is the lifecycle cost.  Buildings and neighbourhoods go through cycles of development, stagnation, decline and renewal. Cities therefore go through cycles as well.  When a city is growing it costs money to build roads and schools and infrastructure like water treatment and sewage treatment. These costs are initial costs that are often paid for by developers that are responsible for the growth.  For the first number of years, that new infrastructure is very low maintenance. It’s new and pristine and the cost of maintaining it is effectively zero. But eventually, those roads will need to be repaved, and the sidewalks repaired. Landscaping will need a refresh.  The schools that were new and filled to capacity will eventually be under-utilized as families move out of those mature neighborhoods. The cost of maintaining the roads and the schools remains constant over time. It’s much cheaper to re-use existing infrastructure through the process of urban renewal instead of letting major regions of the city decay into an urban wasteland.  Intensification is the word that best encapsulates the eco-friendly aspect of urban renewal.  The problem with infill projects is that they’re small. They’re too small for large scale home builders. You can’t mobilize an entire framing crew to move from one property to the next in an infill setting. There is simply not enough work to make the process efficient.  Just like an assembly line is more efficient at making cars than building them one at a time, a residential subdivision is the assembly line equivalent when it comes to home building.  But we’re trading one form of efficiency for another. Efficiency for the builders is coming at the expense of efficiency for the city. The life cycle cost for the cities is actually more important. Intensification in cities is environmentally friendlier than gobbling up more agricultural land and allowing cities to expand outward meanwhile land in the core lies under-utilized.  ----------- Host: Victor Menasce email: podcast@victorjm.com

On today's show we are announcing the contest winners. Chris De Celle David Ortiz Emilio Tucker Emails have been sent to each of you to get your mailing details. Congratulations to our winners.   On today show, we are talking about an impending surge in unemployment.  This is not on many economists radar and certainly we don’t have government talking about it. Certainly the mainstream media has published lots of stories about how artificial intelligence could replace some jobs in the future. But I’m here to tell you that the future is now. If your tenant has a steady job in customer service, there is a 90% chance that they will lose their job within the next 3-18 months.  That’s right, 80-90% of customer service jobs will disappear.  The reason for that prediction is the Pareto principle. The Pareto principle is often called the 80/20 rule. I'm going to give a real life example where that has already happened.

On today’s show we are looking at one of the most convincing economic indicators in advance of next week’s Federal Reserve meeting. We hear politicians talking about how the economy is strong and how unemployment is near record lows. Inflation is coming down, but core inflation remains elevated. Maybe there will be a mild recession or a soft landing in the fourth quarter of this year. For now, we have a hot economy. The consumer is driving the economy. Airlines are reporting record profits. For the first five months of this year, the congressional budget office has been reporting falling revenue. The treasury took in 1.693T in individual income taxes  up to June 2023 compared with the same period last year which was 2.135T.  That’s a short fall of 442B in individual income tax receipts compared with the same period last year. This is a 21% reduction in income tax receipts compared with last year. How can the economy be growing with a 21% reduction in income tax receipts? ----------------- Host: Victor Menasce

Jmi Pfeifer is the founder of Left Field Investing an online investment club with about 1,800 members. On today's show we are talking about how the community operates. To connect or to learn more, visit leftfieldinvesting,com -------------------- Host: Victor Menasce email: podcast@Victorjm.com

Leandro and Arturo are principals at Primestor, a Culver City development company specializing in building in some difficult parts of South Los Angeles. I love what these two guys are doing. You can connect with them at primestor.com ---------------- Host: Victor Menasce podcast@victorjm.com

On today’s show we are talking about how to evaluate a proposal from a consultant. We are going to look at two proposals from different geotechnical engineers. These two proposals differ significantly in both price and scope. One proposal is nearly double the price of the other. How would you evaluate which quote to accept? Which proposal is better? Let’s start with even asking the question: Why do you need a geotechnical engineer? What do they do, and why do you even need to spend money on this? The geotechnical engineer does an analysis of the soil stability on your development site. They determine what it will take for your building to stay standing over the lifecycle of the building.  --------- Host: Victor Menasce email: podcast@victorjm.com

On today’s show we are talking about some of the tricks that bureaucrats use to manipulate the inflation metrics that are being used to decide monetary policy. The cost of money affects the cost of virtually everything we buy. So the power to manipulate the economy and affect the fortunes of an entire population is in the hands of a handful of people who quite frankly have not earned the right to wield so much power.  But before we talk about the manipulations we need to define a few terms so that the incentive for the manipulation is clearly visible.  Let’s start with the gross domestic product. You calculate the GDP by adding up all of the economic activity and that gives you the gross domestic product. If the amount of economic activity has grown, by say, 2%, then the economy grew by 2%. But wait a minute, we know that there is this thing called inflation.  So in fact we need to subtract the rate of inflation from the GDP metric in order to get the real GDP metric that has been adjusted for inflation. In our example, if the economy grew in nominal terms by 2%, but inflation was running at 1%, then we would need to subtract the 1% inflation rate from the nominal GDP in order to get the real GDP.  So getting an accurate measurement of inflation is critical to getting an accurate measurement of GDP. ------------ Host: Victor Menasce email: podcast@victorjm.com