The Real Estate Espresso Podcast

On today’s show we are talking about some of the structures out there, pooling of funds in a blind fund, or investing in an individual project. There are so many ways to invest. The question is, what are the pros and cons of one approach versus the other.  It really starts with getting educated on the type of investment that is going to fit for you. Investments run the full gamut, from buying existing stabilized assets at one end of the spectrum to undertaking large scale development at the other end of the spectrum. These are vastly different in terms of the rates of return that are possible, as well as the timeline and the risks associated with each of the asset types.  In general, Greenfield development projects have the greatest value creation potential but take the longest to bring to fruition. Fully stabilized projects deliver cash flow from day one, but have limited short term upside. Growth in value will come through rent growth over the longer term.  When evaluating any investment, we always look at three major factors  the team The specific sub market  The deal itself.  Due diligence on all three of these elements takes a lot of effort to do it  thoroughly.  ------------ Host: Victor Menasce email: podcast@victorjm.com

On today’s show we are talking about government taking land from you with what appears to be no compensation.  The concept of eminent domain is well entrenched in real estate law. It says that government can demand your land in exchange for just compensation if the taking of that land is in the public interest.  For example, if the public good is served by building a new freeway or an airport, the only way to assemble the land would be by undertaking a claim under eminent domain.  But there is another way to get the needed land, slowly over time. Increasingly cities are using this other method to get what they need without paying a single penny to get it.  They will ask you to donate the land.  Where we see this most often is when the property fronts on a major arterial or collector road.  As density increases those streets need to widen to handle more traffic. Along the way some enterprising developer realizes that this would be a good location for an apartment building and requests a zoning change.  In exchange for the increase in density, the city may ask you to donate a strip of land to the city in order to enable future widening of the road when the time comes.  ------------ Host: Victor Menasce email: podcast@victorjm.com

On today’s show we are talking about making sense of the conflicting economic data that is being reported by different government departments.  Let’s start with GDP and then we will look at employment numbers, and finally we will look at inflation versus real earnings.  ------------ Host: Victor Menasce email: podcast@victorjm.com

I’m a real estate developer. I’m pro-development. I’ve had projects denied by city council as a result of community opposition. In every case, I’ve been shocked by the intensity of community opposition and truly felt that our project was designed to enhance the community, and not detract from it.  Some community opposition has been based on absolutely made up stories that are not at all connected with reality. That’s a polite way of saying that residents in some cases will tell a lie to further their objective of keeping growth away from their community.  Last week I joined a community opposition group. The experience has been a fantastic learning. So much so, that I thought it would be worth sharing the experience with you.  On today’s show I’m sharing my personal experience being part of a community opposition group. This was a Facebook group that surfaced around a proposed suburban development project that local residents think is too big, and out of place with the suburb at the far extremity of the urban boundary. Th project consists of 431 apartments, including a 25 story tower. The original proposal for the site was three 9 story buildings, which already would be a stretch for the community.   The group is barely a week old and has 618 members. The target is a public hearing involving the local city councillor that is scheduled for two weeks from the date the group was formed.  ----------- Host: Victor Menasce email: podcast@victorjm.com

On today’s show we’re talking about the immigration, migration, deportation, and human lives. Earlier this week I had a conversation with Juan. He’s Mexican and lived in Austin Texas from the age of 5 until the age of 27 when he was deported back to Mexico. Juan entered the US illegally with his family at the age of five. Clearly he didn’t have the capacity to make that decision for himself. He speaks perfect English. He had a job in Austin and he was a full contributing member of the community. He had both family and friends in Austin. One day he was driving on the highway and got pulled over by a police officer for an aggressive lane change. He lacked the proper documentation. That started a chain of events that resulted in three nights in a prison cell before being deported back to Mexico.  Juan is barred from re-entering the US for 10 years. He can apply to come into the country properly, but only after that waiting period.  The number of people traversing the US southern border is averaging between 5-6 thousand per day. That’s a huge number. They’re coming from all over the world, not just Mexico or Central America as was previously the norm.  Those who are seeking asylum from persecution should be able to find sanctuary somewhere in the world. That’s basic human rights.  My family escaped WW2 and came into the USA through Ellis Island. Millions, including my grandparents were not so lucky.  Most western nations need immigration just to maintain population. Maintaining population is essential for economic growth. Shrinking population causes systemic economic recession.  The fact is that the entire debate has become so intensely partisan that it’s become virtually impossible to get the truth about what is happening.  Juan says he’s committed to coming back to the US the right way. He has friends that have offered to help him get back into the country and have offered him accommodations. But he has refused that offer. He wants the respect the law.  He has four years remaining before he can apply. He has lived the majority of his life in Austin and is culturally American in every way. I hope he gets back in. Juan’s story is one of millions. He’s a statistic, but he’s also a real person with real dreams and aspirations.  -------------- Host: Victor Menasce email: podcast@victorjm.com

Bronson Hill is based in Los Angeles California. On today's show we're talking about the shift that has taken place in the market over the past six months. To connect with Bronson, visit bronsonequity.com. -------------- Host: Victor Menasce email: podcast@victorjm.com

On today's show we're talking with George about some of the current events in the news and how this will affect real estate investors. ------------ Host: Victor Menasce email: podcast@victorjm.com

On today’s show we are talking about major international events and the impact on real estate from those events. Major cities have sought to host events like the Olympics, the World Expo, The world Cup of Soccer, The PanAm Games, the Commonwealth Games and so on.  Each of these events brings with it the need to build the appropriate event space, accommodations for the visitors during the events themselves, and of course a tremendous amount of infrastructure. On today’s show we are looking at the legacy of major events, a decade after the event is over. ------------ Host: Victor Menasce email: podcast@victorjm.com

Today's question comes from Greg in Virginia who writes: Love the show. I am constantly amazed at your depth of knowledge. My AMA is: I’ve heard you and others state many commercial office buildings are not suited for conversion to apartments and would likely need to be demolished and rebuilt for apartment living. Understood, however, if the office buildings are vacant, meaning no jobs, is there even demand for these additional apartments?  Common sense says invest and build where net in migration occurs, not where people are leaving. If the offices are empty, the assumption is people are leaving. I look forward to your wisdom. ------------ Host: Victor Menasce

On today’s show we are talking about inclusionary zoning. This is a new initiative in many communities aimed at creating affordable housing.  The actual goal of inclusionary zoning varies from one community to another. In some locations there is a narrative that single family detached homes create an economic divide and therefore widen racial segregation that is implicit with economically segregated neighbourhoods. You won’t find an affordable home in the middle of a neighborhood surrounded by luxury homes.  In other communities, the definition of inclusionary zoning is aimed at creating affordable housing by effectively taxing developers with burden of building a number of affordable units in exchange for the right to build a number of market rate homes. The theory is that by sprinkling affordable housing throughout the city as part of new development projects, you prevent the ghetto effect of lower income areas separated from the more affluent areas.  Inclusionary zoning programs vary widely in their implementation. In some cases, developers may also have the option  of  building  affordable units in other locations within a city, or they may be able to pay cash instead of developing affordable units. ---------- Host: Victor Menasce