The Real Estate Espresso Podcast

Investing is not easy. It is an active business that requires continuous improvement of systems and processes. It also comes with risks that you need to understand and quantify On today’s show we are talking about one of the biggest risks to a short term rental property. Last week Dallas City Council voted to outlaw short term rentals in residential zones. You wake up the next morning and realize that you are potentially out of business. Naturally, there is a lineup of lawsuits arrayed against the city.  --------------- Host: Victor Menasce email: podcast@victorjm.com

On today's show we are taking a look at what is happening in the world of softwood lumber and lumber futures. The entire construction industry for new homes and for many multifamily apartment developments is heavily influenced by lumber futures pricing. There's a fundamental change taking place in the way that lumber futures are sold. But first we need to look at the two different types of futures contracts. The first type of futures contract is to purchase a single railcar worth of softwood lumber. That futures contract is an obligation to take delivery of a railcar worth of lumber. The second type of contract is an option contract which gives the buyer the option but not the obligation to purchase a railcar worth of softwood lumber. This distinction is important since it would intuitively makes sense that you would pay a different price for the option versus the price you would pay to fulfill an order. Futures contracts are being cut in size by 75%. Builders have been struggling with gaining control over their cost structure over the past couple of years with the wild price swings we have experienced. By accessing the futures market, builders will be able to control their cost structure in ways that had been previously impossible. For those who are developing multi family apartments, this can be a game changer. The smaller options contract also means that the cost of hedging for a single project is much lower. ------------ Host: Victor Menasce email: podcast@victorjm.com

On today’s show we are looking at crypto currencies. It should come as no surprise that governments the world over are not enthusiastic about having a grass roots competitor to official currency of the nation.  Since most of the world exists in the realm of fiat currencies, the most practical way into the world of crypto currencies is through a crypto exchange.  Is it a coincidence that the SEC is targeting crypto exchanges? We don’t know for sure, but today’s show is going to zero in on that question and postulate why there seems to be a war on crypto from regulators.  The SEC has targeted two of the largest crypto exchanges Binance and coinbase. Binance has 62.5% market share and coinbase has 5.4% market share.  The government doesn’t want to call crypto a currency. Legal tender is the legal tender of the United States or the European Union or whatever jurisdiction. If crypto currencies are not money, then what are they? Now I’m not a lawyer, nor am I a securities lawyer. So I’m not qualified to comment on the merits of the case on either side. But it is clear that the SEC is arguing that securities laws apply to both Binance and Coinbase. If these are indeed securities, then securities laws would indeed apply.  So why is all of this happening, and why is it happening now? ---------- Host: Victor Menasce email: podcast@victorjm.com

On today’s show we are talking about demographics and how this affects real estate on a global basis. Most western economies have declining birth rates. The population of the world is growing.  On today's show we are looking at whether investing strategy is influenced by fertility rates and migration patterns. ------------------ Host: Victor Menasce email: podcast@vjctorjm.com

Oh today’s show we are talking about the current macro economic climate and provide a forecast for interest rates for the second half of this year.  The fact is that we live in an interconnected world and the attempts by central bankers to look at the economic conditions within a nation as a closed system is extremely naive.  We have Germany in recession having experienced two consecutive quarters of economic decline. New Zealand is now officially in recession.  The biggest news in the past week is that China announced a drop in interest rates and is launching a massive public infrastructure spending program aimed at stimulating its flagging economy. As the largest manufacturing economy in the world, China’s manufacturing is a bellwether for global consumption. The promised economic jolt from China reopening from the COVID pandemic lockdowns failed to materialize. It was an economic whimper.  ---------------- Host: Victor Menasce email: podcast@victorjm.com

Russell Gray is the co-host of the Real Estate Guys Radio show, now in its 26th year. On today's show we are talking about the current monetary environment and the risks inherent in today's FIAT currency based system. To connect with Russ or to learn more about the upcoming 22nd annual Investor Summit at Sea, send an email to summit@realestateguysradio.com, or visit realestateguysradio.com ----------------- Host: Victor Menasce email: podcast@victorjm.com

On today's show we are talking with Chad Zdenek who is based in Los Angeles. Chad has a side hustle as the host of at documentary TV series called "Inside Mighty Machines". By day, he owns and operates a portfolio of multi family apartments. On today's show we are talking about making changes to property management and the challenges inherent in making such a change. To learn more or to connect with Chad, visit csqproperties.com ------------- Host: Victor Menasce email: podcast@victorjm.com

We have all experienced entering a search query only to receive a long list of unrelated products that happen to match one of the keywords in the search.  Incorporating artificial intelligence into the customer experience will transform search. You might be wondering how this will affect real estate investors. I’m glad you asked.  Imagine you have a portfolio of rental properties and the client is looking for a three bedroom apartment within 10 minutes walking distance of a specific elementary school, or within a five minute walk of the number 65 bus route. Today’s apartment listing sites force you to wade through hundreds of listings and for you to make the determination whether a property will meet your criteria.  In the future, those companies that deliver a better search experience will have the differentiated offering in the market. In fact it will not be enough to incorporate AI in your offering. You have to remember, these systems can learn. Just like you have to train a newly hired employee in your business, you will need to train the software to respond appropriately for your target customer’s queries.  ------------ Host: Victor Menasce email: podcast@victorjm.com

Today's question comes from Adam who writes: Hello Victor, Thank you for the wonderful podcast.  I am a daily listener and I regularly recommend the Real Espresso Podcast to others. Today you ended your podcast (S6 E166 Cand the Banks Survive Another Rate Increase?) with words "before it all comes crashing down".  I know many are like me wondering what this crash will look like in our own sectors of real estate, but I also know you are not big on making predictions.  That being said, when you say "before it all comes crashing down",  what does that mean for us real estate investors? Which real estate asset classes do you think will be impacted most? Thank you again and have an awesome day!! --------------- Host: Victor Menasce email: podcast@victorjm.com

On today’s show we are talking about the coming financial crisis. You might be wondering how I can say that. We are not seeing more bank failures since the failure of First republic Bank.  We are seeing signs of it creeping into the news headlines. Yesterday’s Wall Street Journal has zero’d in on the looming crisis in commercial real estate and the associated credit crunch. Today the Federal Reserve is meeting, as they do every six weeks. Their interest rate announcement will be a few hours after this podcast is published.  The bank failures so far this year, while larger and more severe than the failures of 2008 have been explained away by banking regulators and Federal officials as isolated cases. These banks we are told were not well managed.  But on today’s show we are going to look at the underlying conditions that led to the failure of these institutions and see if they are isolated to those banks or not.  ------------- Host: Victor Menasce email: podcast@victorjm.com