The Real Estate Espresso Podcast

Today is another AMA episode (Ask Me Anything).  Mark writes:  I plan to build 12 townhouses in two sets of six. I’m wondering if its worth looking into setting them up as condos with an association instead of just long term rentals. I have experience with long term rentals but have never set up anything like condos. The real estate market looks like it would support selling the condos. Any advice? ------------------ Host: Victor Menasce email: podcast@victorjm.com

Brian Briscoe was a US Marine Lieutenant Colonel who is now a full time real estate investor. On today's show we're talking about the skills bridge program that exists to help military personnel transition from service life to the private sector. Similar programs exist in both the US and Canada.  To connect with Brian and to learn more, visit fouroakscapital.com.  ------------------- Host: Victor Menasce email: podcast@victorjm.com

This is the December 25 edition of the show. Merry Christmas to all our listeners of the Christian faith. On today’s show I’m doing some gratitude work. I was taught this by my good friend and mentor Kyle Wilson. Kyle is a past guest on this show and he’s best known for being founder and CEO of John Rohn International where he was Jim Rohn’s business partner for 17 years. There is no doubt that many of us lead stressful lives. My definition of stress is very simple. Whenever there is a gap between expectation and reality, that can be a source of stress. There is no guarantee of stress, only the possibility of stress. If there is no gap between expectation and reality, there can be no stress. Stress lives in the gap. Stress can evoke other emotions like anxiety or fear. But as 2021 draws to a close, I choose to focus on gratitude. It turns out that you can’t be grateful and anxious at the same time. It’s not physiologically possible. Kyle taught me the exercise of writing down 20 GREAT things from 2021. Writing 20 great things is different that simply saying what you’re grateful for. It’s more specific, more tangible. Otherwise you can simply fall into the trap of generic things like “I’m grateful for my health. I’m grateful for my family.” Take the time to write for yourself 20 great things that happened this year. It’s a more specific form of gratitude. ------------------- Host: Victor Menasce email: podcast@victorjm.com

On today’s show we’re talking about math. That’s right math. We humans are used to linear thinking. It’s how many of us interact with our physical world. When you double the distance, it takes twice as long to get there. If the price goes up by a dollar, you need to take one more dollar out of your wallet. This is all linear thinking. This is the way we are used to seeing the world. We are not accustomed to thinking of geometric functions. Geometric functions accelerate. These are functions where the number in the exponent is greater than 1. Your parents no doubt taught you about the power of compounding. They probably used the example of compound interest, and how over time, with the power of compounding, you can multiply your earnings. We humans are really terrible at understanding this. Most people don’t save money because they can’t see the tangible benefit in the short term. ----------------- Host: Victor Menasce email: podcast@victorjm.com

On today’s show, we are talking about buying in a fringe area. Today’s show is cautionary tale. As you know, I’m a proponent of the buy on the line, move the line strategy. That line exists in nearly every city in North America. On one side of the line is a hot neighborhood. There are expensive properties, desirable amenities like coffee shops and art galleries. On the other side of that line, you’re in the hood. You’re in an area where people on social assistance reside. The property values between these two areas can vary dramatically, even though they’re only a short distance apart. This strategy is based on the notion that you can redevelop just on the wrong side of the line. When you do, now the line is on the other side of your property. Which means you can go do it again and again and again. You can literally move the line. But for a line to move, the line needs to be arbitrary. If the line is a school district, or a municipal boundary or a railway line, that boundary is going to be a lot more difficult to move. If you go too deep into the hood, then you will probably fail. You won’t get people to bridge the gap to the hot neighbourhood. ------------------- Host: Victor Menasce email: podcast@victorjm.com

On today’s show we’re talking about how the current labor shortage is affecting the world of employment, and therefore by extension the world of real estate. We’re still in the middle of a pandemic. But despite the historically low unemployment rate, we have a labor participation rate of 61,8% that is is down sharply from pre-pandemic levels. If you go back to the 1960’s we had labor participation rates below 60%. But at that time, many women were not in the workforce and stayed at home as homemakers. Labor participation peaked around 2000 – 2001 at 67%. Participation has fallen over the past 20 years to about 63.5%, and before plunging below 60% in the height of the pandemic. The people who are no longer in the workforce still need income to live, and a place to call home. You’ve seen the help wanted signs all over. You see the recruiting signs at big box stores, restaurants, grocery stores, retail shops. The signs are everywhere. -------------- Host: Victor Menasce email: podcast@victorjm.com

On today’s show we’re talking about another spike in lumber prices that will affect housing starts and renovations all over North America. Anyone who has built anything in the past year has suffered the sticker shock of high lumber prices. Prices back in May of 2021 peaked at over $1,700 per thousand board foot. That measurement is the commodity price for softwood lumber on the futures exchange. Much of that price increase was driven by the pandemic and the labour shortages caused by the pandemic. Sawmill capacity was reduced during the pandemic which contributed to the shortage in the Spring of 2021. Capacity utilization of the sawmills peaked at 90% in the US in May of this year and at 88% in Canada. As demand and prices dropped in the summer, sawmill utilization fell to 80% in the US and 70% in Canada as builders used up their inventories of materials. About 30% of the softwood lumber used in US construction comes from Canada. Almost half of that amount or 14% of the US total supply comes from British Columbia. The month of November saw torrential rains in the interior of British Columbia. These storms exceeded previous rainfall records and created severe local flooding. That flooding washed out roads and disrupted transportation across the entire province of British Columbia. ------------- Host: Victor Menasce email: podcast@victorjm.com

On today's show we're taking a close look at why the supply chain disruptions are not being solved.  ------------------------ Host: Victor Menasce email: podcast@victorjm.com

George is a repeat guest on the show. He's spending time in Delray Beach to get some warm weather instead of being hunkered down in NYC. On today's show we're talking about how to underwrite in the current environment.  ------------------ Host: Victor Menasce email: podcast@victorjm.com

Galen Hair is based in New Orleans, Louisiana where he specializes as an insurance litigator. On today's show we're talking about how to figure out if your insurance policy is worth the paper it's written on. To connect with Galen or to learn more, visit InsuranceClaimHQ.com. -------------------- Host: Victor Menasce email: podcast@victorjm.com