The Real Estate Espresso Podcast

George Ross was executive Vice President of the Trump Organization where he was Donald’s right hand man for 37 years. To be clear, I'm not a Donald Trump supporter. I value the wisdom and insight from George who has been at the top of the industry for 60 years. He taught at the law school at NYU for 20 years. The author of two best selling books on real estate and negotiation. George Ross is a frequent guest on the show. Earlier this week we reported on the Amazon announcements in Washington DC and in New York City. Today we’re going to get George’s take on the announcement. George lives on Long Island, not far from JFK airport, in a beautiful home overlooking the water and a golf course. He’s no stranger to the traffic jams on the Long Island Expressway. Even though he lives only 22 miles from the Trump Tower, NY traffic could easily make the trip take in excess of 90 minutes each way. He lives only a short distance from the new Amazon location. Listen to what he has to say about the Amazon announcement.

Chris is a former corporate executive who uncovered a number of inconvenient truths about our economy, our energy policy, and our exploitation of the environment. This was the genesis of Peak Prosperity and a new way of life, based on a deeper understanding of the science behind the systems that power our society. Chris is not a fringe futurist, despite the fact that his message is unpopular with mainstream economists. Once you've understood the mathematical relationships between elements of our society, you can't un-see it.

On today’s show we’re talking about the top 3 employee retention mistakes that I see employers make. It’s been said that people are the key to your business. That’s true of any business and Real estate is a business just like any other business. Employee turnover is incredibly expensive for any business for multiple reasons. Before someone leaves, they’ve already taken their foot off the gas and are coasting You will experience a period of time when the organization is short-handed You need to spend the time and money to train someone new after you’ve already spent that money once before, or perhaps more. So what are the three top employee retention mistakes that I see? Failing to train your staff and set expectations Failing to give employees a professional growth path Failing to trust employees We go into them in more detail. Have a listen.

Happy Thanks giving to our listeners in the US. Whether you’ve traveled to celebrate thanksgiving with family, or if you’re taking a it easy at home. It’s a time to reflect upon the year to date, and recharge your personal batteries. Take the time to revisit your goals from the start of the year. If you’re like most people, there are still a few that have yet to be completed. Perhaps there are a lot. Who knows? If you’re Canadian, you celebrated Thanksgiving back in October. What I’m talking about today is every bit as much for you as it is for people south of the border. The period between US Thanksgiving and the end of the year is one where many people’s priorities shift. Some people are thinking a lot less about work. They may be planning time with family over the holidays in December. Take some quiet time this weekend to write down a few vitally important things. These are so important that I don’t consider them optional for anyone who is serious about achieving their goals. Listen to find out what they are....

This past weekend, I was in Denver speaking at an investment conference. I received the same question repeatedly from several attendees at the conference. Since this question comes up so frequently, I thought I would share the answer with our listeners. Many investors who invest in multi-family apartments are looking for cash flow. How can you deliver cash flow to investors on a new construction project when the property isn’t generating income yet? Several of you indicated that you didn’t undertake new construction because your investors would want to see a rate of return from the point of investment and would not be willing to wait 2 years to see income coming back from the investment. The answer I’m going to give you here is a game changer. We’ve been using some variation of this approach for close to 8 years now, on virtually all of our projects. When you undertake a new construction project you put together a budget for everything to complete the project. That includes all of the elements of the physical construction, often called the hard costs. You also need to budget for all of the soft costs. The soft costs include your architectural design, your holding costs such as property taxes, insurance, loan interest, and any fees such as building permits. If you’re borrowing funds from a bank, you’re going to have a line item in your budget for those interest reserves. If your investors need to see cashflow during the construction period, you can construct your budget to include a payout during the construction period. You will include a second interest reserve line item in your budget to pay your investors. Before you run out and copy what I’m proposing here, you will want to seek professional advice from an attorney who specializes in securities law to make sure whatever you offer is fully in compliance with the law. You will probably also want to get accounting advice to make sure you are not creating an offer that has adverse or unexpected tax consequences. If you plan to use retirement funds, you’ll also want to double check with your advisor who specializes in self directed retirement accounts to make sure there are no issues with using retirement funds for such an investment.

We humans have an incredible inability to see bubbles when we’re in the middle of one. They seem to make rational sense in a strange sort of way. At least some highly educated people can speak at length about why the value should be so high. They can explain the science behind it. It’s hard to believe that people thought tulip bulbs would be the path to riches. But in 1636, valuations went into the stratosphere, only to come crashing down in 1637. At the peak, some tulips were worth 10 times the annual wage of a single worker. After a long period of real estate prices increasing, of rents increasing, and of prices increasing, it’s easy to become conditioned into thinking that prices only go up. Rents only go up. Salaries only go up. But they don’t. We’ve seen periods of time when rents went down. We’ve seen prices fall. We’ve seen incomes fall. In each of those cases, there was an explanation as to why that happened. It’s too easy to look back at history and explain away what happened. That will never happen again.

Active residential listings (that’s condos, townhouses and single-family homes) finished October with 8,539 total units—a 35-percent increase over the same period in 2017. Anecdotal data from realtors I spoke to this weekend suggests that the average days on market is now getting longer at 35 days, but still favours sellers. That’s typical of a balanced market. Something Denver hasn’t seen for some time.

Bob Burr is the President and CEO of Panther Exploration, and oil exploration firm based in Bowling Green Kentucky. Bob explains many of the facets of the oil industry from a real estate perspective. In many ways, you can participate in the oil industry from a real estate play, not with the risks of oil production

Robert Kiyosaki is the best selling business author of all time. This conversation with him was recorded in person at the New Orleans Investment Conference. It's surprising how much we see the investment world similarly.

Yesterday the new Ontario conservative government issued their first fiscal update. Of interest to real estate investors, The government is also eliminating rent control on new rental units to increase housing supply across the province, but says rent control will remain in place for current tenants. The new policy will be a reversal of sorts from an initiative the previous Liberal government put in place, which imposed rent control on all buildings constructed after 1991. Under rent controls, landlords are limited to rent increases of 1.8% this year. Electricity rates went up an average of 14.8% per year from 2008 to 2017 for a total of 133% over that 9 year period. Interest rates are landlords largest expense. Interest rates have nearly doubled in the past two years and will go up again in the next year. Yet landlords are limited to increases of 1.8% per year. There is a solution to the root cause. Listen for a creative solution.