The Real Estate Espresso Podcast

Ryan Webster is based in Iowa, but invests in several stable markets of the South East. You can connect with Ryan at EquityYieldGroup.com ------------------------ Podcast: Victor Menasce email: info@victorjm.com

On today’s show we’re talking about pragmatism. It’s easy as real estate investors to be idealistic and come up with solutions that are innovative and best in class. On today’s show we’re talking about a number of examples where complexity, or cost often force a simpler solution. For our first example, we are talking about a commercial property that will house a restaurant. In commercial applications, we know that garbage containers that are recessed into the ground have several advantages. #1, they are barely visible at the surface. #2, they control smells much better. #3, can hold more than an above ground solution. Today we learned that if we need to dig a hole to semi-submerge these trash bins, we will need an environmental assessment, and an archeologist to oversee the excavation. But if we use surface containers and a wooden fence around it, we don’t require any such approvals. Since trash handling is not truly a first order value added component to the commercial product, the added bureaucracy is preventing the better solution from being implemented. In our second example, we’re talking about a design that was completed with input from the client, but with no input from someone who understands cost effective construction. We had to spend a few hours value engineering features out of a property that did not need to be introduced. These are the types of tradeoffs we are examining on a daily basis. We’re not a general contractor. We hire general contractors. But unless you are willing to immerse yourself in the decisions that are being made, you will become the victim of decisions that are made for you. Sometimes those decisions will get you a finished product, but at a high cost and often with high complexity.

On today’s show we are talking about how interest rates are going up. It’s pretty clear that rates need to increase, but not for the reason that the central banks are publicly stating. The window continues for you to acquire debt under favourable terms. But that will not last forever. --------------- Host: Victor Menasce email: podcast@victorjm.com

On today’s show we’re talking about security. We all know that thefts can and do happen all over the country with alarming regularity. Sometimes, the thief gets caught in the act. But that’s pretty rare. A smart thief is pretty adept at doing their business when people are not looking. So we have learned to invest in security systems. Cameras can be one of the best tools in seeing what happens. But these are complex systems that you can’t just forget about and hope they will cover you when a theft does occur. There is a tradeoff in all of these systems. On today’s show we’re going to look at some of those tradeoffs. --------------- Host: Victor Menasce email: info@victorjm.com

On the first day of each month we review the book of the month. In order to be considered for book of the month, a book has to meet a simple criteria. It has to be impactful enough to change your life or your perspective on the world.  Our book this month is "Traction" by Gino Wickman. This book is an operating system for your business. We have been using it at the core of our business for two years. I can tell you without hesitation that our business has improved in terms of clarity and execution in that time.  ---------------- Host: Victor Menasce email: podcast@victorjm.com

Investors love things to be predictable. They want their investments to deliver above average returns with the safety and predictability of a government bond. But then the world experienced a pandemic, followed by a deluge of printed money, followed by supply chain shortages, followed by inflation, followed by labor shortages, followed by an unprovoked war in Europe by an imperialistic dictator. We have not even begun to understand the impact that the conflict in the Ukraine will have on global supply chains that are increasingly intertwined. The belief was that the best way to prevent war was to create economic interdependence. This doctrine has been at the center of much of Europe’s attitude toward Russia in the wake of the cold war. That now appears to have been a strategic error. The new world order has been disrupted and we are now closer to World War III than at any time since the Cuban Missile Crisis. ------------------- Host: Victor Menasce email: podcast@victorjm.com

Omar Khan is based in the Toronto suburb of Mississauga where he invests in commercial real estate in Hamilton, Ontario. The greater Toronto area remains one of the fastest growing communities in North America and affordability is driving people to the extremities. To learn more, connect with Omar at Omar@thetatradingco.com. ----------------- Host: Victor Menasce email: podcast@victorjm.com

On today’s show we are putting aside the usual weekend interview to talk about world events. This is not a political show, and I don’t intend to turn it into a political show. But it’s an important moment in world history and I feel like I need to say what is on my heart. We are witnessing war on the European continent involving an imperialistic power for the first time since the 1960’s. War is hard to justify under many circumstances. Sometimes you see a war of liberation where an oppressed people rise up to find freedom. We have seen this pattern before. We witnessed the Hungarian Revolution in the 1950’s. We witnessed the Soviet army invade Czechoslovakia in 1968. This is a war of aggression and of domination. This is the kind of war that the free world needs to wake up and oppose. You cannot appease a dictator. In the eight years that have passed, Ukraine has lost the Crimean Peninsula to an illegal Russian annexation. The Kremlin has instigated a war in the east part of the country called the Donbas region, where thousands of Ukrainians have been taken captive and tortured, and some 14,000 killed in a war that serves no purpose. And now Mr. Putin has launched a full-scale invasion of Ukraine. So what can I do? What can you do? As real estate investors, we own real estate. We own space that could be used to temporarily house refugees coming from Ukraine. We could partner with organizations that are sponsoring refugees to find safe havens. ----------------- Host: Victor Menasce email: podcast@victorjm.com

On today’s show we’re talking about doing business with people who are not real. We had a recent interaction with a seller who turned out to be a liar. Sadly, these situations exist with alarming regularity. The property in question was based in Houston. Since we are in Texas, we will call the Seller Bubba. I’m instantly suspicious when someone is using a gmail address or a Hotmail address. When that happens, it suggests that the person is not really serious about being in business. They can’t afford the $6 a month to go out and get a properly hosted email address with their own internet domain. When we arranged a site visit, he refused to give us the address and decided to cancel the meeting and meet the seller himself without us. It’s clear that he doesn’t have the ability to close on the purchase. So we conducted the most basic of due diligence on the internet. The wholesaler had no website. They had a linkedin profile and an Instagram account. The only indication that this wholesaler was involved in real estate was a single video on his Instagram account. Well the information in the Instagram video did not match what we were told in person. It turns out that the property doesn’t have direct access onto a public right of way. It would require an easement from the church next door, or access through another property that the seller owns. The wholesaler went on to brag about how he was going to wholesale this property and earn a six figure income for flipping the contract to a buyer. Then he also went on to say more about the buyer. He described the buyer as an 88 year old man who owned a lot of real estate, restaurants, apartments, and that frankly he was a tired landlord. The best part was that he was expecting to get the property locked up under contract very soon. But wait a minute, he had just told us before he recorded the video that he had the property under contract. When we confronted him about cancelling the site visit with our team, he proceeded to blame our team for not being trustworthy. He attacked our team members character. I wish we could do more to protect hard working people from these kind of business predators. I actually have no problem with working with professional wholesalers. The emphasis is on the word professional. They can be a source of great deals. I’ve bought two deals in the past year from wholesalers, and they have been rewarded handsomely. Fakes show up in all industries, and I suppose real estate is not immune. When you perform due diligence, make sure you perform due diligence on the people who make representations. You never know what you might find.

On today’s show we’re talking about predictions. Predictions are rare for me. I don’t make them often. When I do, it’s because the data is clearly pointing to something that I can see that may not be obvious. Earlier this year on January 4, I predicted that the pandemic as we know it would end by the end of February in North America and Western Europe. I also predicted that oil would hit $100 a barrel by the second quarter. So the question is, what was I seeing in the data a few months ago that made those predictions seemingly accurate? ------------------------ Host: Victor Menasce email: podcast@victorjm.com