The Real Estate Espresso Podcast

On today’s show we’re talking about how to secure product in a time of scarcity. Supply chain disruptions are happening all over North America right now. This is affecting everything from electrical switches to plumbing fixtures to windows. Several window manufacturers are quoting 16-20 weeks lead time. Subcontractors are busy and scheduling the labor component is also challenging. Construction projects can’t sit exposed to the elements waiting for windows and doors. The envelope of the building must be completed fairly quickly otherwise you risk weather damage. So you have to carefully schedule the project so that it doesn’t stall midway through construction. So how do you secure your supply when many components in a construction project require custom manufacturing. You don’t necessarily have the luxury of component substitution. You’re going to commit to a single manufacturer and you will be at the mercy of their lead time. A single critical item on the critical path to completion can increase the cost of your project significantly. ---------------- Host: Victor Menasce email: podcast@victorjm.com

As investors we’re on the lookout for assets that escalate in price over time. If that price escalation is predictable, then you have the makings of a sure fire investment. Many investors take the stance of looking retrospectively and attempt to use history as a predictor of future performance. Imagine looking at the chart of a commodity like copper or gold or lumber or platinum. You would see a general long term upward price pressure, largely driven by devaluation of the currency. But short term supply and demand fluctuations dominate those trends. You see price spikes followed by periods of depressed prices that can last a decade or more. Some have argued that the path to increased value is scarcity. Remove supply from the equation and prices increase as long as demand remains strong. There is a relatively new product designed to create financial incentives to reduce pollution and green house gasses. Governments all over the world have introduced a tax of sorts on carbon emissions. This tax is in the form of carbon credits. I know, there are some purists out there who will argue that there is a difference between a carbon tax and a carbon credit. These carbon credits can be purchased and traded on the open market. Virtually all companies will eventually need to purchase carbon credits so the demand for the product is virtually assured. ------------- Host: Victor Menasce email: podcast@victorjm.com

Dr. Allen Lomax is the host of the Steed Talker Podcast. On today's show, Allen is the host of the show and I'm the guest. We're talking about how to create opportunities at will.  --------------------- email: podcast@victorjm.com

Cody Bjugan is based in Scottsdale Arizona where he specializes in land entitlement nationwide. His education company vestright.com is entirely dedicated to value creation by converting raw land to land entitled for development. You can learn more by downloading his white paper at vestright.com/land101. ---------------- host: Victor Menasce email: podcast@victorjm.com

You might own a parcel of land free and clear. You have a construction project planned for your property and you know that you will have to eventually get a construction loan. Securing a construction loan can be a lengthy process and it’s tempting to get start the construction before you get the loan in order to save time. But contrary to what might seem like common sense, this time saving tactic could ultimately cost you time and delay your project significantly. -------------- Host: Victor Menasce email: podcast@victorjm.com

We often business owners buy a software package or subscribe to a software service and then fail to properly integrate it. The software is sold on the basis of offering a solution to a problem. But there is a fallacy in this way of thinking. Software can only implement a business process. Sometimes the software assumes a business process that doesn’t match the business process in use in the business. When that happens, the software will go unused. The purchase of the software might create the false illusion that the problem has been solved. You can sometimes adapt your internal business process to match the process that is assumed in the software. If that meets your needs then everything will work out fine. But as is often the case, the assumed process in the software doesn’t quite match the process required by your business. This can be seductive because it looks like your system almost works. But something that almost works doesn’t work in practice.

Our Book of the Month is called "$100M offers: How to make offers so good people feel stupid saying no." By Alex Hormozi The core of the book is based on the notion of making Value-Driven vs. Price-Driven Purchases You can grow your business by three axes, more customers, selling more value, and getting them to buy more often. The simplest way to increase the gap between price to value is by lowering the price. It’s also, most of the time, the wrong decision for the business. Getting people to buy is NOT the objective of a business. Making money is. And lowering price is a one-way road to destruction for most — you can only go down to $0, but you can go infinitely high in the other direction. So, unless you have a revolutionary way of decreasing your costs to a fraction of the competition, don’t compete on price.

Today is another AMA episode (ask Me Anything). Today’s question comes from Carl in Austin. I’m looking at a mobile home park with quite a bit of vacancy and am wondering if its possible to put RV’s on those spaces. What are some of the considerations that I should be aware of? Carl, this is a great question. First of all, I’d like to address why I might be qualified to answer your question. I happen to own an RV Park that is currently about 50% RV’s and 50% mobile homes. In order to answer your question, there are two things you will need to consider. 1) Is what you are proposing allowed in the zoning for the property? 2) What upgrades will be required in order to physically accomplish what you’re proposing?.

On today’s show we’re talking about the hidden taxes that result from printing money. Those who have studied history will know that any time you debase the currency by printing, it has the effect of destroying the fabric of a society. This has happened throughout history time and again. While the rate of inflation has been somewhat low over the past decade, we’ve been living with it. But we’ve also gone through two major movements that have caused a reduction in costs. The first movement has been the technology revolution. If you think back to the 1980’s, even the most basic of personal computers was priced at $4,000. That was a huge sum of money at that time. It was the equivalent of two months of salary at that time. Today, you can buy a much more powerful computer for under $1,000. Each generation of technology innovation has in fact lowered the cost of many durable goods and lowered the cost of many capital expenses. The second movement has been the globalization of manufacturing. In the 1970’s, most manufactured goods were sourced locally in the same country. China was still a captive economy. Japan was the first country to start exporting manufactured goods in a large way. Today, most of our consumer goods are made in low cost geographies in Asia. Manufacturing was outsourced to Japan until Japan was too expensive. Then manufacturing was moved to Taiwan until that was too expensive. Then manufacturing went to China in search of lower cost labor. With its vast population, China seemed like an infinite pool of low cost labor until costs in China went up. Manufacturers then went to Malaysia then Thailand and the Philippines and Vietnam and India. Today, Bangladesh supplies more than its fair share of clothing. We kept driving down manufacturing costs with access to lower cost labor. But eventually, that band-aid solution eventually runs out when there is no more cheap labour left to exploit. We are not there yet. There are a lot of people still earning a lower wage than in the west. But it will happen eventually. When you have inflation, there are six hidden taxes. But these taxes don’t apply equally to everyone in the economy. 1) There is a transfer of wealth from the lender to the borrower. 2) Some Assembly Required 3) Government is the biggest borrower of all. See #1. 4) Capital Gains Tax on assets priced higher due to depreciating currency. 5) Understating CPI means less money for entitlement programs 6) Holding bonds on central bank balance sheet skews market forces for interest rates.

On today's show we're talking about how to ensure your construction site is 100%, perfectly level. The tools that surveyors use are also readily available and can save your project and save you money. You don't need to be a licensed surveyor to use them. We often use these tools to double check the work performed by a surveyor and ensure no mistakes are made.  -------------------- Host: Victor Menasce email: podcast@victorjm.com