The Real Estate Espresso Podcast

On today’s show we’re going through the thinking process of how to assess whether you are evaluating a viable project or not. This was a property that we got under contract because it looked like it had potential at first. In this case we were presented with the opportunity to convert an assisted living project in Utah. The facility lost its operating license and our analysis is that assisted living projects in this particular submarket have a hard time financially. The individual suites could be repurposed as apartments and an apartment conversion initially looked attractive on the surface. But the problem is that there is insufficient parking for an apartment building. People residing in AL don’t drive, so there is not much parking. In fact the parking ratio is approximately 1/3. We would need to add more than 40 parking spaces to have a viable apartment conversion. We spoke with the city and they would have been supportive of an apartment conversion. They agreed that we needed more parking and assembly with one of the neighboring parcels would be essential to creating sufficient parking. We looked at a hotel option. The suites were well suited to a hotel offering. But unless we could assemble a neighbouring parcel and build at least 40 more parking spaces, the project would not be viable as a hotel. In the end, we decided to pass on this opportunity. It was looking like it was going to be a forced fit to make the property work physically. Even if we undertook the effort to convert the building to meet the minimum criteria as apartments or a hotel, it would still be a poor quality apartment building and a poor quality hotel. Neither of these screamed that we should go forward. We get a regular flow of opportunities like this crossing our desk. Do we feel bad about spending the effort? Not at all. This is part of the process of finding that rare subset of projects that ultimately do meet our criteria. -------------- Host: Victor Menasce email: podcast@victorjm.com

On today’s show we are talking about stress. The dictionary defines stress as “a state of mental or emotional strain or tension resulting from adverse or very demanding circumstances.” I personally find that definition to be rather useless. Using a related word, or a synonym to describe a word is not very helpful. So I have developed my own practical definition which I think is more useful. "Stress is that emotion we experience when there is a gap between expectation and reality." ---------------- Host: Victor Menasce email: podcast@victorjm.com

Today’s show is a commentary on the highly publicized Freedom Convoy protests that have gripped my home city of Ottawa Canada for the last 23 days. What I’m reporting is my own opinion based on my own observations and from first hand conversations that I have had with people who have attended the protest. In our culture we seem to have a need to simplify and reduce issues to a binary choice. You are either good or bad, friend or enemy. You either agree or disagree. Things are black or white with no room for grey. What I have observed in the news media is an attempt to select the subset of the facts that support their desired narrative. Virtually every news outlet I have seen is guilty of the same process, irrespective of which side of the argument they are supporting. Some have said that if you support the protest then you are anti science and anti vaccine. I’m pro vaccine and anti mandate. I believe that it was in most people’s best interest to be vaccinated earlier on in the pandemic. But as we have learned, the vaccine does not prevent the spread of the disease. It reduces the severity of the symptoms in those who are vaccinated. If people choose to not be vaccinated, even though it would be in their best interest, that is their prerogative in a free society. I had a friend who chose not to get the vaccine, and sadly he is no longer with us. I believe he made a poor choice. I’m sad that he is no longer living as a result. I’m sad for his family and for all of his friends. But I defend his right to make a choice. So I reject the reductionist argument that if you are anti mandate, you are automatically anti vaccine and anti science. I’m completely pro vaccine and pro science, just anti mandate. It’s not very complicated to keep those two ideas in your head. ---------------- Host: Victor Menasce email: podcast@victorjm.com

Steve Beattie is the founder of Breathing in Nature. It sounds strange to say it, but Steve will teach you how to breath. Today's show is not about real estate, but how you can access you own internal faculties to achieve higher performance and greater health. Steve is a certified Wim Hof method trainer. Wim has become famous for breaking numerous world records for sitting in ice baths for hours at a time. Wim has climbed Mount Kilimanjaro wearing only a pair of shorts. He has ascended into the death zone on Mount Everest wearing only hiking boots and shorts. The breathing techniques that Wim and Steve teach enable incredible performance. To learn more, and to connect with Steve visit breathinginnature.com. We took a large portion of our team at Y Street Capital through a full day workshop on how to breath. ------------------- Host: Victor Menasce email: podcast@victorjm.com

Scott Meyers is a specialist in storage on a national basis. Not only is he an investor, he is an educator as well.  You can connect with Scott and learn more at selfstorageinvesting.com ------------------ Host: Victor Menasce email: podcast@victorjm.com

Hi Victor, How does an investor or property owner identify the best use and development potential or highest long-term cash flow opportunity for a particular property? Last year, we purchased a 2 acre piece of land with over 400 feet of commercial road frontage in one of the fastest growing areas in the country. Comps in the area show anywhere from $8.00 per sq foot (for vacant parcels with less road frontage) and up to $30.00 per sq foot on outparcels for a nearby Publix grocery store currently under construction opening this Summer. Certainly not a primary or even secondary market… but perhaps tertiary since it’s outside of Mobile, AL in the path of growth! Nevertheless, the opportunities are vast and perhaps endless. In what direction should we look to best determine the land’s most lucrative use? --------------- Host: Victor Menasce email: podcast@victorjm.com

On today’s show I’m going to share what I learned in my meeting with the Mayor. This was a quick trip down to Lake Charles Louisiana for the sole purpose of having lunch with Mayor Nic Hunter and the City Administrator. Three other team members came to the meeting from Dallas and Houston. We had two bankers travel several hours from Baton Rouge and New Orleans. This one hour lunch meeting involved a lot of travel for a lot of people. Much as we have been making do over the past two years with zoom meetings, we have also experienced incredible delays with city officials taking a long time to respond to simple queries. It has become clear to me that the act of jumping on a plane to meet someone face to face has the human effect of elevating you in importance. When they know that you traveled an entire day for the sole purpose of meeting with them, they will meet with you. You will become elevated in their priority. The Mayor needed to go to the State legislature to argue for additional money for storm recovery. The would have impacted our meeting. But because he knew we were all traveling from out of town to meet with him, he re-arranged his schedule and turned an afternoon meeting into a lunch meeting. We became a priority to him. For those of you who know me, you know that I have a technology background. I am an early adopter of new technologies and am an advocate of technologies. I regularly spend half of my day or more in zoom meetings. I’m here to tell you that traveling to meet people face to face will be the new super power in 2022 and beyond. ---------------- Host: Victor Menasce email: podcast@victorjm.com

Today’s question comes from Aaron in Dallas I’m 32 years old and currently working as a physician assistant in the emergency room, but I have been wanting to do real estate investing full-time for the past three years. I have saved a few hundred thousand and want to invest it real estate and be an active full time investor however I know that a lot of this industry takes experience since deals are hard to come by which has led me too seek an internship with a seasoned real estate investing organization. Currently I live in Dallas, Texas, but I am even up for moving if it would be strategic to have a “boots on the ground” representative in a specific market for an investment company.  I have a great deal of respect for you and this may be a stretch but would even be curious about what you look for in an intern. Any words of wisdom or guidance would be greatly appreciated! -------------------- Host: Victor Menasce email: podcast@victorjm.com

On today’s show we’re talking about overshoot. Overshoot is a phenomenon that exists in all kinds of systems. Overshoot exists in physics. Overshoot exists in individual behaviour. Overshoot therefore exists in markets. What is this overshoot that we’re talking about? Imagine if you were driving down the highway at high speed and the sign for your turnoff was only visible after your exit. Most people would miss their exit. That’s why there are plenty of signs leading up to your exit, telling you to prepare to get off the highway. Then the designers of the highway add a special lane to help you slow down for your exit so that your exit is nice and orderly. If there were no signs, then the exit would be chaotic. People would slam on the brakes. They would try and back up into oncoming traffic to get off the highway. Or if they get off at the next exit, they’ve clearly got some ground to make up. They overshot the exit. Overshoot happens because of momentum, and because the signs appear too late. So what does this have to do with real estate? Overshoot can happen in real estate markets too. There is a shortage of supply in the market. So builders construct lots of new houses. They continue to sell well. Builders keep building and building and building. By the time the signs start to appear that the market is over-supplied, the market is already over-supplied. The greater the lag time between the decision to start construction and the market data, the greater the amount of overshoot. ---------------- Host: Victor Menasce email: podcast@victorjm.com

On January 31, the European Supervisory Authority which oversee the European Banking Authority, The European Insurance and Pensions Authority and the European Securities and Markets Authority issued a position paper. The body issued a Joint European Supervisory Authority response to the European Commission’s February 2021 Call for Advice on digital finance and related issues. This 109 page document outlines how the regulator is concerned with the rapidly evolving picture of distributed financial services. The regulator is used to financial transactions flowing through a manageable number of relatively centralized institutions like banks, brokerage houses, and publicly listed stock exchanges. In the 109 page document, they don’t do much except wring their hands in worry over something that has been rapidly becoming mainstream over the past five years. So what does this all mean? It means that the EU is playing catch-up, as are governments the world over. We have seen governments very slow to respond to technology. It’s taken nearly three decades since the advent of the internet for governments to even figure out how to get major platforms to collect sales taxes. It’s easy to assume that new technologies that are not covered by regulations will be exempt from regulation.