The Real Estate Espresso Podcast

On today’s show we’re talking about a question that is on a lot of investor’s minds. We keep hearing from the Federal Reserve and government officials in the Treasury department that inflation this year, while elevated, is expected to be transitory. That is to say, it’s temporary. We have seen rents increase, sale prices increase sharply in response to low supply of housing. When it comes to certain commodity prices, we’ve seen prices rise and later fall based on short term supply and demand dynamics in the market place. Rents have a general tendency to stick. They tend to rachet upwards. Even older buildings tend to increase rent, but more slowly. Unless a building is truly an inferior quality living space, you can expect to see rent increases approaching the market average. The rising cost of land and the rising cost of construction are the major factors that drive higher asking rent for new buildings. ---------------- Host: Victor Menasce email: podcast@victorjm.com

Today El Salvador was the first country to adopt Bitcoin as a recognized currency. But this takes us back to the fundamental question of what is money? Why would a country adopt a currency that is as volatile as bitcoin? It’s not an effective store of value, and its usefulness as a means of exchange is improving all the time, but is still difficult. El Salvador made the announcement in June a crypto currency conference in Miami to adopt bitcoin as an additional currency. The President of El Salvador said that the reason for adopting crypto was the short term benefit of creating jobs and provide financial inclusion to thousands of people outside the formal economy. The country has been using the USD since 2001. Before that, the local currency was called the Colon which had been in use since 1892. But when El Salvador adopted the USD in 2001, they didn’t remove the Colon as a valid legal tender. The majority of citizens are opposed to having their wages denominated in bitcoin due to the extreme volatility of the currency against the USD and other major currencies. There is real fear that the purchasing power can be eroded overnight. Furthermore, while you can pay your taxes in bitcoin, so far, the Salvadoran government has said that taxes will be calculated in US dollars El savador is a poor country. There is a large percentage of the population that don’t own a cell phone, and many who do own a cell phone cannot afford a data plan. So using a digital wallet without a data connection is clearly problematic. So when I hear the president of El Salvador speak, what I’m hearing is that they are having a hard time even observing the economy. Much of the economy is happening in cash, with no income reporting to central tax authorities. It’s hard to tax transactions you can’t see. Is the person bartering a chicken for a basket of mangos going to pay tax on the sale of the chicken? I doubt it. If they’re paying in cash in US dollars, are they going to inform the tax authorities?

At 11:01 AM yesterday, lightning struck one of our assisted living care homes and started a fire. The building was empty at the time of the incident and had only received its operating license a couple of days earlier.  On today's show we're talking about how you can use every single event that happens in your business as an opportunity for continuous improvement, to create a learning culture.  ----------------------- Host: Victor Menasce email: podcast@victorjm.com

Today is another AMA episode (ask me anything). This question comes from David in Belize. David asks, I have several companies ( broker, agent, syndication, gift shops, personal properties) and starting a few others.  ( Nowhere near your scale for now 😊) I know you have several Companies/Projects going on  i.e., farm to table restaurant, Philly construction, several projects in Louisiana ( RV park, multi fam, retirement homes). You always talk in your podcast about having calls to your teams. My question is, how often do you have these meetings with your team(s) (Zoom or call), 1x a week, 1 time a day? Every 2 weeks, etc.??? How long do these meetings last? How do you balance your family/free time?

Chris Widener is an internationally recognized keynote speaker and author. He has authored more than 22 books. On today's show we're talking about his history as an author and a speaker.  Chris is passionate about our culture and has become politically involved lately. At the Real Estate Espresso Podcast we don't endorse any political party and remain agnostic. Heck, I'm Canadian and don't even get to vote in a US election.  I have several of Chris's books on my shelf and you can find them anywhere books are sold. You can connect with Chris at chriswidener.com or learn more about his events at americanfreedomtour.com. 

Robert Helms is the host of the Real Estate Guys Radio Show, now in its 25th year. Robert is a developer having developed projects all over the country and internationally. He hosts numerous live events on an annual basis. But after 18 months in the pandemic there is a certain amount of fatigue with virtual events. On today's show we're talking about the transition back to live events.  Robert will also be hosting the Secrets of Successful Syndication in Dallas on September 17-18. To learn more, send an email to syndication@realestateguysradio.com.

This is another AMA episode (Ask Me Anything). Today's question comes from Joseph. "Hey Victor; Looking for another perspective. New tenant in SFH, I’m covering the lawn care. Tenant claims the hub cab on the car was broken by the gardener, pictures of location of vehicle and possibilities leave this situation extremely unlikely. The gardener tried to reason w/ the tenant and they are demanding he replace the hub cap. The cost of the hub cab on eBay is from $30 to $60 shipped. I am cautious about honoring something that seems very unlikely and then opening up other situations. Looking at it from the tenants perspective, and if they truly believe this happened, making good could go a long way. I was considering crediting the money to the gardener and let him pay the amount as the “good cop” and then handle any more issues down the road, if any; taking previous concerns in to consideration. What thoughts do you have?" Joseph, This is a great question. It falls into the category of how to handle any request from a tenant. This is encountered often in the world of property management. But the very name property management is a misnomer in my opinion. The property is an inanimate object and therefore can’t be managed. What you do influence is the tenant relationship. I personally favour the approach you suggested in your question. By having the landscaping contractor pay for the damage, you are staying out of the dangerous waters of reimbursing the tenant for damage, even if you fund the landscaping contractor. At the same time that you tell the tenant that you have contacted the landscaping contractor about the damage, take the opportunity to ask if everything is in working order at the property. That changes the posture from reactive landlord to proactive landlord. In the same conversation, let them know that you will be sending someone to change the air filters. When tenants feel like they are getting ripped off by their landlord, they will often find hidden ways to get even with you. They may create artificial maintenance problems to see if you are responding to their complaints. But if you are proactive and you demonstrate that you are proactive, it has a tendency to change the dynamic.

Today is another AMA episode. This question comes from Jasdeep in N. Michigan. I’m going to summarize a very lengthy question. We acquired a hotel from an absentee owner who had allowed the hotel to fall into disrepair over the past 20 years. The property had become a blight in the city. We are experienced hotel owner operators. We had a hard time finding a contractor to take this project. We did ultimately hire a contractor who acted unprofessionally and eventually worked to sabotage the project. In the ensuing dispute, the contractor caused city inspections resulting in a red tag being placed on the building, revoking the certificate of occupancy, and filed a mechanics lien on the property in excess of $400,000. They even contacted the local press who wrote a defamatory article on the hotel. I would truly appreciate any thoughts you may have on our situation. Jas this is a great question. There are a lot of moving parts to the situation. There are really several different directions that we can take this discussion. 1) What were some of the root cause failures that seem to have happened in this case? 2) How to fix the situation from where you are now? 3) Where are there possibly remaining blind spots? ----------------------- Host: Victor Menasce email: podcast@victorjm.com

Today’s show we’re reviewing the book “The Hard Thing About Hard Things” by Ben Horowitz. Ben Horowitz, is the cofounder of Andreessen Horowitz and one of Silicon Valley's most respected and experienced entrepreneurs, offers essential advice on building and running a startup—practical wisdom for managing the toughest problems business school doesn’t cover, based on his popular ben’s blog. Ben Horowitz and Marc Andreesen worked together in the early days at Netscape. They were truly among the founders of the modern day internet. While many people talk about how great it is to start a business, very few are honest about how difficult it is to run one. Ben Horowitz analyzes the problems that confront leaders every day, sharing the insights he’s gained developing, managing, selling, buying, investing in, and supervising technology companies. Ben is one of the few people that truly speaks to the unspoken issues that entrepreneurs deal with.

On today's show we're taking a look at uncertainty. You can take any headline and dive deep on the uncertainty that abounds. No answers. No recipe. Today's show is a prelude for September 1, where we review the book of the month.