Real Estate Espresso
By Victor Menasce
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Description
Your morning shot of what's new in the world of real estate investing. Daily real estate investment outlook from investor, syndicator, developer and author Victor Menasce. Weekday shows are 5 minutes of high energy, high impact awesomeness. The weekend edition consists of interview with notable guests including Robert Kiyosaki, Robert Helms, Chris Martenson, George Ross, Ed Griffin, Dr. Doug Duncan, and many more.
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CleanTwo Minus One Equals Three | On today’s show we are talking about the most insane statements to come from economists in recent memory. I’m acutely aware as I’m sure many of our listeners are, of the unsustainable levels of government debt in the US, Canada, the UK, France, Switzerland, Italy. I could go on. The justification for the debt is that as long as the interest rates are lower than the level of real economic growth, that is growth of real GDP, the debt is sustainable. But folks here is where the argument falls apart. We know that our population is aging. That’s not a secret. We also know that as people age, their spending patterns change. They spend less. They also borrow less. So the argument that economic growth will continue at the same 2.1% rate in the coming years in the western economies makes no sense. We saw in Japan that economic activity stagnated as soon as the working population peaked as a result of the aging process. Japan’s lost decade happened as soon as the domestic spending shrank. In other countries in the west We have a population that as it retires switches from actively contributing to economic output to one that is strictly consuming from society. They spend less. They pay less in taxes. They demand more from the society in terms of social security and health care. The deficit spending at the federal level gets the most attention. But the federal government has the tool to print money at will and inflate its way out of the problem by effectively devaluing the currency. That’s a way of taxing the population without them really noticing. The government racked up a new debt of $2750 for every man, woman and child in America this year. That comes to $7,100 per household. That’s in addition to the already existing debt of 22T dollars. That debt comes to $67,000 for every man woman and child in the country, or a total of $173,000 per household. Nobody seems to be talking about this. This is a train wreck in the making. Here’s what my friend Peter Schiff had to say about the 22T in debt. He says, "This is just a funded portion of the debt. This is where the US government sells a bond and somebody owns that bond. It doesn't include the 70T in unfunded liabilities like what the government owes for Social Security, or guaranteed bank deposits, or mortgages, or student loans, or all that nonsense. That's not there. Those are contingent liabilities. They're just as real. They're not even part of the national debt calculation." I may not be an economist, but I can perform pretty basic arithmetic. The economy will not grow faster than interest rates. A country will never grow its way out of a deficit. Remember, interest rates reflect a connection to the rate of inflation and also carry a risk premium. When countries carry irresponsible levels of debt, the risk of default clearly goes up. It’s not the Federal reserve who will establish the risk premium, it’s the open market. When China decides it no longer wants to hold 25% of the global float of US treasury bills, who will step in to buy them? When Saudi Arabia decides it no longer wants to hold dollars so much, who will step in to buy them? We see countries in South America with much higher interest rates than the US. Why? Because they’re at higher risk of default. When investor sentiment shifts and global investors don’t want to hold US dollars any more, then the US dollar will carry a risk premium, the same as Argentina. | 2/20/2019 | Free | View in iTunes |
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CleanAMA - Should I Be Hosting Free Events? | My friend Michael from Pennsylvania has started a Real Estate Meetup, and in a short time has attracted a sizeable high quality audience. His question is “What is the benefit of hosting a free event versus a paid event?” Michael, this is a great question. There are two main ideas that I want to get across in answering this question. We are familiar with the concept that you go to the marketplace and buy something, you are the customer, and the thing that you bought is the product. If you buy a cake, the cake is the product. If you buy Spanish lessons, the Spanish lessons are the product. We are also familiar with things that are offered for free in the marketplace. If you’ve ever used Facebook, or watched a YouTube video, you’re comfortable with the notion that you are getting something for free. In exchange for that, you’re allowing the owner of that platform to present a bunch of different advertisements. In that instance, while you are the consumer of the content, you are no longer the customer. You are the product. You are being used. The question is when does it cross a line and you start to become abused. In some circles this is called an “ethical bribe”. The advertiser offers you a free white paper in exchange for your email address. You know that you are going to receive more emails in the future with offers for some kind of product sales. You might want the free white paper and judge that the value you will get from the free report is worth the hassle of getting an occasional email. You are being used, and hopefully not going to be abused. The second idea I want to leave you with is that of culture. When you create a culture of education, of community, of abundance and you stick to that, then you weed out the takers. You know who those people are. They’re only in it for themselves. They are the ones who come in to your house and steal the bar of soap, who take an extra can of soda for the road from the buffet at the end of the meeting. They’re the ones who walk around and put their business card on every chair without asking the host of the event if its OK to do that. Sometimes the taker is the host of the event itself. We’ve all been to those events. They’re the ones who will lavish compliments upon you while they’re trying to sell you something, and then not pay any attention to you after they’ve made the sale. They’re off hunting for their next victim. With a paid event, you tend to weed out the takers from the audience. Those who are willing to make an investment of cash, are willing to pay for value. They’re not just in it for something free. | 2/18/2019 | Free | View in iTunes |
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CleanWorld Economic Forum Global Risk Report | On today’s show we’re talking about one of the key take-aways from the World Economic Forum in Davos Switzerland only a few weeks ago. A few weeks ago the Forum published their annual Global Risks Report. This 114 page document was developed in partnership by the Zurich Insurance Group and Marsh and McLennan Companies. Insurance companies make it their business to understand risk. But before we can dive into the content of the report, it’s important to actually define what risk means. Risk, by definition is something that is not in your plan. If you’ve planned for 4 weeks of weather delay in your project, and you only experience 3 weeks of weather delay, then weather delays are not a risk because they’ve been already accounted for in your plan. Risks are anything outside your plan. When we talk about risk, we divide the risk into two components, likelihood and impact. The likelihood is the likelihood of the risk coming true. The impact is the actual impact of the risk if it comes true. The purpose of talking about risks is to ensure you have contingency plans for the risks that represent a threat to your business. The top 3 risks in terms of likelihood are all environmental. This encompasses extreme weather events, earthquakes and the like. It’s amazing to me how in this day and age in 2019 the number of commercial property owners that are still under-insured in high risk areas. Taking the time to read and understand your insurance policies to understand their limitations. Insurance policies can be incredibly complex to understand. There can be language in one section that is in conflict and superseded by opposing language in another addendum. When a claim is made under a policy, the claims department will send the policy off to the legal department for review. That process makes the insurance company your legal adversary at that point in time. Their job is to pay as little as possible under the policy. The two highest likelihood man made risks are theft, data theft, and cyber attacks. Here too, this is an area where there are simple procedural safeguards that you can employ which will protect your business. This past week I was speaking with the owner of a jewelry business who has experienced employee theft on multiple occassions. We’re talking theft in the hundreds of thousands of dollars. Cybertheft is a major issue that continues to make headlines. Data breaches have exposed personal data of billions of people. The largest was in India, where the government ID database, Aadhaar, reportedly suffered multiple breaches that potentially compromised the records of all 1.1 billion registered citizens. It was reported in January that criminals were selling access to the database at a rate of 500 rupees for 10 minutes, while in March a leak at a state-owned utility company allowed anyone to download names and ID numbers. It amazes me that in that environment, people still send wire transfer instructions via email without an old fashioned safety protocol to doublecheck the details by phone. If your investor sends a wire transfer and the email is hacked and the money ends up in the wrong account, you may be liable for hundreds of thousands of irrecoverable stolen funds. | 2/18/2019 | Free | View in iTunes |
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CleanMobile Home Investing with Kevin Bupp | Kevin Bupp is an expert in Mobile Home Investing. It's clear from our conversation that Kevin has developed a very deep expertise. He's the host of the Real Estate Investing for Cashflow Podcast. | 2/17/2019 | Free | View in iTunes |
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CleanSpecial Guest Russell Gray | Russell Gray is the co-host of the Real Estate Guys Radio Show. He is also the co-host of The Investor Summit at Sea, one of the most incredible professional growth events in the world. On today's show we are talking about the Investor Summit at Sea and why we both attend each year. | 2/16/2019 | Free | View in iTunes |
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CleanBonus Episode - Amazon Quits NYC Expansion | This is a special bonus episode about the recent Amazon announcement that they were pulling out of the NY second headquarters. I predicted that Amazon might take this step despite the public announcement back in November. The major political objection was the tax incentives that were negotiated with Amazon as part of the overall decision to locate in the NY area. On the surface, you could spin the story to say that the government was caving to the interests of big business and handing the richest man in the world a check for $2.5B dollars. But there is another narrative that is equally valid. Before the Amazon announcement, there were no 25,000 jobs and none of those people were paying federal and NY state income tax and NYC property tax. After the investment of $2.5B by Amazon, getting a $2.5B tax break, the 25,000 employees would pay an estimated $875M a year in taxes each year, every year. When the 2.5B in initial tax breaks are exhausted, then Amazon corporate becomes an even larger contributor to the tax base. It’s pretty simple math. Before Amazon there was no tax income to the government. After Amazon arrives in NY there would have been $875,000 a year in new tax income, and going up from there. The handful of very vocal politicians who opposed Amazon coming to town are not business people. How do I know this? Because they cannot do the most basic of grade school arithmetic. Before Amazon no $875 million in tax. After, $875 million in tax. It’s pretty simple math. The most vocal opponent has been senator Mike Gianaris. In this case he decided that jobs coming to his area was a bad idea. He didn’t want more investment coming into the area. He opposed gentrification. It’s kind of like the person who is in a fight with someone else. But you drink the poison hoping the other person gets sick. The other nuance to this story is the boom and bust cycle in the area resulting from the boom that never happened. Over $500M of Real estate changed hands since the November announcement. Some of that may have been under contract prior to the Amazon announcement. The biggest loser is the owner of the Citigroup tower who now needs to find a tenant for close to 1M square feet of space that Citicorp is vacating in 2020. The big winners will likely be Virginia, Nashville, Austin and Dallas. | 2/15/2019 | Free | View in iTunes |
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CleanLeasing Power From The Sun? | On today’s show we’re examining a potential source of revenue for your income property that has the benefit of a little extra cash flow, plus being environmentally green. The economics of solar power have been somewhat marginal over the past several decades. That’s why governments have stepped in and offered generous incentives to subsidize the cost of a solar installation. That subsidy usually came in the form of higher purchase prices for electricity contributed to the electrical grid from a solar farm. These projects would not have been economically viable without the subsidy. But in recent years, the cost of electrical panels have come down to nearly $1.00 per watt of produced capacity. The total installed cost is about double that amount. Most of the subsidies have disappeared. The payback on a solar project is anywhere from 10 years to 20 years depending on the local cost of electricity and the number of effective daylight producing hours. The high capital cost of these projects have made them unattractive due to the long payback. Two alternatives are the solar lease or the power purchase agreement. Solar Leases have been around for years now, but in recent years they mostly come with performance guarantees, which can make the difference between them and power purchase agreements pretty small. On today’s show I will explain the differences, but in practice, none of this should matter and whether it’s a lease or PPA probably won’t have a huge impact on your decision making. You might be thinking, “Wait, you mean you can lease a solar system?” The answer is yes. | 2/14/2019 | Free | View in iTunes |
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CleanWhat is love? | Welcome to the Valentines Day edition of The Real Estate Espresso Podcast. I’m celebrating Valentines Day with my wife on the beach in Mexico. We take time each year to recharge. Sometimes taking holidays is easier than others. We have both been working really hard over the past several months and even into our holiday, there hasn’t been a day of true disconnect or relaxation for both of us. Project timelines spanning several months or years can mean that a holiday in the middle of a critical time of a project can be problematic. Whether it’s making sure the podcast is loaded and ready for the next day, sending a document to a lender, or dealing with an issue at the office, it seems there is always something requiring attention. Through the process, I’ve learned that life is a journey. The global independence that the internet affords makes it possible for me to produce shows from my home office, from a hotel room anywhere in the world, or sitting by the beach in the South of France. You might have heard the birds chirping in the background over the past week. So on this Valentines day, I’m asking the simple question “what is love?” Is it a thing? The dictionary isn’t quite sure what it is. It’s defined both as a noun and a verb. As a noun, it’s described as an intense feeling of affection. It is also defined as a verb, as in the sentence “Do you love me?” Or “I’d love a cup of Espresso.” But even when you describe love as a feeling, the feeling doesn’t just magically happen on its own. It requires some kind of action for the feeling to result. So in that context, I believe love is really a verb. By describing love as a verb, it’s clear that its an action word. Love of any kind requires action. Love doesn’t just happen. It’s the result of a choice, a choice to love. All persistent choices require commitment, conviction, tenacity, and integrity. Long term decisions require long term commitments. All too often people make decisions based on transient emotional states. I would not describe myself as someone who is hungry. But I was hungry last Tuesday around 5PM. That was a temporary state. I made a short term decision to eat something to deal with the temporary state. I didn’t make any life altering decisions because I was hungry at that moment in time. Loving successfully requires commitment to loving. It requires energy. The feeling of Love, now we’re talking about the noun is one of those basic human needs like Oxygen, water and food. Without food you can starve. Without oxygen you can suffocate. Without love, you will die. The short term replacements for love like lust are just not the same. They’re hollow and empty. Love can’t persist without commitment. | 2/14/2019 | Free | View in iTunes |
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CleanWho Will Choose To Live Here? | On today’s episode we are asking a very simple but important question. It’s a question that I believe rarely gets asked when considering a property. The question is, “Who would choose to live in this property and are they someone who I want to have as a client?” If I improve the property, will that change change enough about the property to attract my ideal client? If the property is a single family home on a nice street with mature trees and all the surrounding properties are well kept with new cars in the driveway, who will choose to live here? If the property is a 1960’s 4-Plex and the paint on the trim is peeling and there are two broken cars in the driveway that clearly haven’t moved in a long time, who will choose to live here? Is that client my ideal target client? If the property is a 2 BR condo in a luxury building with amazing amenities and gorgeous views of the Rocky Mountains and is a short walking distance to Main Street shops and restaurants, who will be my target client? You don’t need to choose a property where only you would choose to live. That might rule out too many good opportunities. But you do need to identify the client who will choose to live here and insert yourself into the narrative of their life, even for a few minutes. When you do that, it’s time to ask a few important questions. If I choose to live here, is it perfect for my lifestyle? Can I afford it? Can I see myself here for a long time? When I invite my friends and family to visit, would they be proud of me for living here? These are very simple but powerful questions that may give you additional insight into the property that you are about to buy. This is what in marketing is often called the customer avatar. It’s a specific individual who exists in real life. They are your ideal client. You know them well. You know what they like. You know their values. | 2/13/2019 | Free | View in iTunes |
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CleanColliers Office Market Report | Colliers recently completed a market report on the state of office space. It contains some startling revelations. Yes flexible office co-working space segment of the market accounted for 1/3 of all new leases signed last year. While still a small percentage of the overall market, its the fastest growing segment. | 2/12/2019 | Free | View in iTunes |
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CleanOpportunity No More | Last week, NY State Senate Deputy Leader Michael Gianaris announced he will introduce legislation to eliminate tax breaks for capital gains when investing in federal Qualified Opportunity Zones. “The Opportunity Zone program was intended to help economically distressed areas but is being abused to grant tax breaks to already overdeveloped neighborhoods,” said Senator Michael Gianaris. “The state should not be made to suffer due to the misuse of this program.” | 2/10/2019 | Free | View in iTunes |
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CleanLive Q&A | This live Q&A session was part of a keynote address in Lancaster, Pennsylvania. Some great questions that were very specific to the local geography, but universally applicable to almost any geography. | 2/9/2019 | Free | View in iTunes |
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CleanSelf Storage with Chuck Sutherland | Chuck has developed all types of properties in his extensive career in real estate investing. But he's a self storage specialist. This will be obvious from our conversation. Chuck can be reached at creativerealestatenetwork.com/podcast He has written a book on creative financing and it's a free download for our listeners. | 2/9/2019 | Free | View in iTunes |
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CleanAMA - What Single Quality Distinguishes Success? | This episode was recorded live at a conference in Lancaster, Pennsylvania. The question came from a member of the audience. In my estimation, the one thing that distinguishes success is "resilience". I give an example of our neighbors who tried every trick under the sun to block the existence of our project. | 2/8/2019 | Free | View in iTunes |
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CleanRecession Signs Are Mounting | The economic indicators of recession are starting to trickle in. We are seeing ballooning inventories in multiple sectors of the economy. When times are good, suppliers increase production to meet the rising demand. But as always, they get a little ahead of themselves. The auto industry sold 17.3 million vehicles last year. Frankly, some of that consumption was the result of major storm damage from settling insurance claims from late 2017 and from 2018, as opposed to true economic demand for new cars. Demand peaked 3 years ago at 17.55 million cars and trucks. Today, inventories on dealers’ lots total 3.95M vehicles. That’s nearly 11 weeks of inventory. The industry considers 30 days of inventory to be healthy. However, if you consider that the current forecast for 2019 is for less than 17M cars to be sold in the US. If we see a drop in demand, then we’re really sitting on close to three months of inventory. General Motors already announced the closure of 5 plants across North America and Ford is also reporting a 27% drop in operating income for 2018. Part of the driver for new vehicles last year was a change in tax rules that permit businesses to expense the entire vehicle in the fiscal year compared with the previous requirement to depreciate the capital expense over several years. The stimulus resulting from the rule change is unlikely to repeat in 2019 to the same degree. Other sectors of the economy are also showing signs of slowdown. As we’ve previously reported, the residential housing sector is seeing inventories increase in several markets. Inventories are up 116% in Seattle Washington, up 131% in San Jose California. Britain is in a full blown contraction, but that’s driven by the Brexit uncertainty. The cloud of what will happen looks like it will take considerably more time to resolve. Prime Minister May has survived a non-confidence vote and has indicated that she will renegotiate the terms of Brexit with the European union after the original deal was resoundingly defeated in the British parliament. The EU has said they’re not willing to renegotiate. The calls for a second referendum is getting increasingly louder. Italy reported economic numbers for the 4th quarter. They reported the second full quarter of economic contraction putting them technically into recession territory. France showed contraction in Q4, and December retail sales in Europe overall had their largest one month drop since 2011. | 2/7/2019 | Free | View in iTunes |
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CleanWhat We Can Learn From The Super Bowl | For many people it was a boring game. Well into the third quarter the game was tied at one field goal each. No team had managed an offensive run of more than five possessions of the ball. It was a game dominated by defence. Games that involve lots of scoring, passes and receptions that defy physics make for an exciting game. Watching a game that is dominated by offence is so much fun. As real estate investors, those are the days of acquiring new properties, and of growing the portfolio. They’re exciting times. Everything is appreciating in value. The game of offence in real estate is fun too. Tom Brady was in his 9th Superbowl. He’s by no means a rookie to the championship game. Anyone who watched the game would acknowledge that Tom Brady didn’t play his best game. He had some weak passes. He looked slow and tired in the first quarter. Offensively, the New England Patriots didn’t look like the tight disciplined dominant machine we’re accustomed to seeing. He won his 6th Super Bowl on Sunday night, tying the record for most number of championships in Super Bowl history. Playing defence is boring. But playing defence won the Super Bowl. There’s no doubt that we are in a phase of the market cycle that shows lots of signs of weakness. This is not the time to play offence. It’s a time to play defence. Prices are high. That means that we will likely see lower prices in our future. The days of playing offence will return. But you need to survive this next down cycle and be positioned to take advantage of the next wave of market growth when it returns. As real estate investors, the time to buy is when the market is falling, when investor sentiment is negative. We may not want a repeat of 2008, but we do want to see good buying opportunities in our future. | 2/5/2019 | Free | View in iTunes |
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CleanTop 5 Problem Areas With Contractors | On today’s show we’re talking about the main areas that owners run into trouble with contractors. There are 5 areas that I see over and over again. In some cases, these learning have been the result of first hand experience. There’s nothing more humbling than making a mistake when you really know better. I believe it's really important to get references when selecting a contractor. My favourite source of references come from architects. They get to experience a wide range of contractors over an extended period of time. Over time, they figure out who is good and who isn’t. So here we go the top 5 problem areas when developing contracts. 1) Scope 2) Payment 3) Purchasing 4) Termination 5) Liens | 2/5/2019 | Free | View in iTunes |
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CleanGivers Don't Get | Today's episode shatters the law of reciprocity. It's a myth, it doesn't exist. There' another mechanism at play that we actually have more control over. When we understand that, the results are more powerful. | 2/3/2019 | Free | View in iTunes |
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CleanTax Liens with Abhi Golhar | Abhi Golhar is the host of the nationally syndicated Think Realty radio show. He's a multi-family investor, a syndicator, and he specializes in tax liens. Join me for a fun conversation with Abhi. You can learn more about him at https://www.abhigolhar.com/ | 2/3/2019 | Free | View in iTunes |
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CleanCommercial Borrowing with Leslie Smith | Leslie Smith is with Commercial Direct, an online based commercial lender who specializes in unusual commercial opportunities. Her take on commercial lending is a little non-traditional. But they've been in business for 20 years. A fascinating and refreshing approach. | 2/2/2019 | Free | View in iTunes |
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CleanBonus Episode - Technical Elements of Recording And Editing The Podcast | Today's bonus episode was recorded live on the beach. It's also available as a video on Youtube. I describe how the show is recorded and edited. | 2/1/2019 | Free | View in iTunes |
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CleanBook Of The Month - "Building A Story Brand" by Donald Miller | On today’s episode we are reviewing the book of the month. In order to be considered for book of the month, the book must meet a very simple criteria. It has to capable of changing you life, or your perspective on the world. Of course, whether it changes your life is up to you. You can consume the content, remark on how good it is and then continue your life without making any changes. In fact, that’s what most people do. If that’s what you do, you’re missing the point. This month’s book is “Building a Storybrand” by Donald Miller. | 1/31/2019 | Free | View in iTunes |
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CleanAMA - Is Corporate Debt A Risk To Our Economy? (Part 2) | Today's episode is part 2 to Adam's question on Corporate Debt. On today's show we dig deeper into corporate debt and what are some of the issues surrounding it. What can cause corporate debt to become toxic? After studying is more deeply, I believe that we have a lower risk of another credit crisis resulting from corporate debt. The real threats to our economy and our banking system come from government debt that is a runaway train. | 1/31/2019 | Free | View in iTunes |
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CleanAMA - Is Corporate Debt A Risk To Our Economy? (Part 1) | Today's episode is based on a question from Adam in Riverside California. He asks about how much of a risk corporate debt represents to our economy. This is a great question, and it's a complex one to answer. So it will take a couple of episodes to answer this question. Today we're going to explain one of the widely accepted debt rating systems, and on tomorrow's show we will go deeper into answering Adam's question. The global debt of all forms grew from about 100T ten years ago, to about 170T today. The debt to GDP ratio has grown as well and has grown by 25% in that same 10 year period. Globally we are carrying a lot more debt. In that same time, corporate debt has grown from 37T to 66T, a growth of 29T in that same time period. We will dig deeper into what all this means on tomorrow's show. In the meantime, how much has your personal and business debt grown in the past decade? | 1/30/2019 | Free | View in iTunes |
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CleanAMA - Could Mini-split HVAC Systems Have Problems? | Today's episode in another AMA episode - Ask Me Anything. Robin asks... In one of the previous episodes, you had mentioned about the advantages of using mini-splits in terms of cost savings. I had spoken to an HVAC specialist about this concept, and he mentioned some drawbacks. - Any kind of serious maintenance/replacement down the line would require tearing down walls which can be quite expensive. - Tenants cooking something greasy and clogging up the outlets. - Operational efficiency: In the case of a furnace, tenants are familiar with changing the furnace filters which are quite simple. - In Canada, the weather can be quite extreme like what he had experienced in January and even using some resistive elements may not generate enough heat inside the units. Just wondering what are your thoughts regarding these concerns. Thanks, Robin | 1/29/2019 | Free | View in iTunes |
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CleanMore Government Overreach | Today's show is about another example of government overreach. In January 2017 Canadian federal government instituted a mortgage stress test rule. This required banks to subject borrowers to a financial stress test when applying for a residential mortgage loan. The stress test was designed to protect the marketplace and the banks from the risk of rising interest rates in the future. Borrowers would need to qualify for an interest-rate two points higher than the actual prevailing interest-rate in the market. So if interest rates were at, say, 3%, the borrower would need to qualify as if the rates were 5%. In the latest twist the Canadian federal government is now examining whether the same rules should also be applied to private lenders. This information was reported by the Globe and Mail who cited three sources directly familiar with the talks taking place behind closed doors. Since the rule change in 2017, fewer borrowers have qualified for bank financing. Borrowers have responded by turning to alternative lenders to complete their financings. In the wake of the rule change last year there has been considerable growth in the market share for private lenders. Private lenders have different underwriting rules than banks, and they generally charge a premium compared with banks for an equivalent loan. So these loans are more expensive for borrowers. But they are a last resort for many borrowers. Today private lenders represent about 10% of the residential mortgage market. That represents a significant increase compared with a year earlier. Some banks have expressed a concern that private lenders could eventually represent 15% of the overall market. The banks have been quietly lobbying the federal mortgage insurer and the federal bank regulator over the loss of market share. So exactly what is the rationale for imposing more rules on private lenders? The regulators are concerned about the risk being transferred from Banks to private lenders. So here we have a government that has created a side effect from a new rule that they didn’t anticipate. Their idea of a solution is to layer another rule on top of the new rule instead of eliminating the rule that caused the problem. Wait a minute. Since when has the government been concerned about protecting accredited investors from taking financial risks? In my opinion this has nothing to do with protecting wealthy investors. The federal government does not want the banks to lose market share. In fact I would argue that the banks have lobbied the federal government and convince them that they should protect the banks market share. I’m not hearing complaints from private investors that they government to step in, to help them with new rules on how they should under-write their loans. They’re not asking government to compensate them for losses that haven’t even happened, or that might happen at some point in the future. | 1/28/2019 | Free | View in iTunes |
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CleanGolf is Dying. Long Live Golf | Golf popularity is declining. It's a combination of cost, demographics, and the number of new golfers entering the sport. Many golf courses are being targeted for redevelopment. On today's show we have the story of an 18 hole course in Ottawa where the community opposition to redevelopment is extremely high. I'm talking with community leaders Jenna Sudds, and Neil Thompson to get their perspective on the redevelopment proposal. We also have George Ross, former Executive Vice President of the Trump Organization on the show talking about his experience helping acquire golf assets for the Trump Organization, and his perspective on redeveloping land that was once a golf course. | 1/27/2019 | Free | View in iTunes |
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CleanBuilding Business Credit with Ty Crandal | Ty Crandal runs an organization called Credit Suite. They specialize in all forms of business credit, separate and distinct from personal credit. They assist companies in establishing credit scores for their business that will enable them to qualify for revolving credit facilities based strictly on the business, and not necessarily a fixed asset as collateral. | 1/26/2019 | Free | View in iTunes |
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CleanStated Income Loans Are Back | Earlier this week the Wall Street Journal published a story criticizing the return of stated income loans. Many of the loans that precipitated the 2008 financial crisis were also stated income loans. It was one of those “here we go again” stories. It tells the story of a 30 year old nursing student who managed to get a $610,000 loan with no tax returns and only 12 months of bank statements and letters from clients. How Outrageous! How irresponsible for the banks to be taking these types of risks again. The rest of the story is stated somewhat factually, but not really analyzed in depth. Here are the facts. The lender made the loan at 65% loan to value. That’s a pretty conservative ratio. Even if the borrower defaults, the lender stands a very good chance of getting back 100% of their principal. Stated income loans are not a problem in and of themselves. In the world of residential underwriting, the fundamental assumption is that the path to repayment of the loan is from someone’s employment income. If you’re not repaying the loan from your employment income, then there must be something wrong with the borrower. The problem with the stated income loans back in 2005-2007 is that they were high ratio loans. They were offering loans with very low downpayment, and no verification of documentation. That’s not the case here. If a homeowner doesn’t have 3 years of income history, it doesn’t mean they’re a bad risk. Bank accounts give a more complete view of spending history than a tax return which provides a snapshot at a single point in time. I think there’s nothing wrong with stated income loans. When a lender lends you money, they’re asking only one question. “If I lend you money, how am I going to get it back?” How will I get it back if things go well? How will I get it back if things don’t go well. The safety of a loan is the combination of security and risk. These variables together define safety. The security of a loan is based on the lender’s recourse. If the loan ratio is at 90% equity, and 10% loan. I don’t care what the borrowers income is. If I have to foreclose on that property, it will be the best day ever. On the other hand, if the loan is at 10% equity and 90% loan, my exposure as a lender is much higher. The risk of the borrower defaulting becomes much more important to the lender in the second scenario. If I’m a lender at 10% loan to value, I don’t care what the risk of default is. I’m always going to make my money back no matter what the borrower does. There is virtually zero risk as long as I’m secured on title in first lien position. My protection in that instance is the security and the low loan to value ratio. | 1/25/2019 | Free | View in iTunes |
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CleanAre You Really An Investor? | On today’s show we examine what it means to be an investor. An investor is very distinct from a business operator, and distinct from a business owner, different than a broker, and different than a trader. An investor is truly passive. They don’t work for their money. They put their money to work for them. An investor isn’t a gambler, nor are they a speculator. Those folks are called gamblers and speculators. The return on investment for an investor is based on the creation of value. That happens when you invest in a business, that business generates profit, and returns value to investors in the form of cash flow and increased valuation. In a liquid market, some of the value can be realized in the form of an exit, that is a sale. Trading isn’t investing. Trading shares is the same as trading tomatoes at a farmers market, or trading baseball cards at a baseball card convention. You’re buying assets at a lower price and selling at a higher price. The profit is made in the arbitrage. Imagine if you went into the farmers market and decided you were going to invest in tomatoes. Sounds like a strange thing to say and it is. There’s no way you could be investing in tomatoes in that environment. You could be trading tomatoes. That is not Investing. Let me be clear there’s nothing wrong with trading. Trading is perfectly fine. Only problem arises when you confuse trading and investing. If you think you’re investing and you’re really trading, you might be surprised by the outcome. | 1/24/2019 | Free | View in iTunes |
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CleanFunctional Obsolescence | On today show we are talking about functional obsolescence. So what exactly is functional obsolescence? Those old 1950’s houses with the small kitchen that you can touch both walls when you stretch your arms out fully. You can put in new cupboards and appliances, but you will still have a tiny 1950’s kitchen. The functional flow of the home won’t match the needs of today’s modern family where the kitchen is the hub of virtually any home. Economic obsolescence is when the functional obsolescence is curable, but not practically curable due to the cost of making the changes compared with the cost of outright replacement. Incurable obsolescence is when there is something about a property that simply cannot be fixed without a complete reconstruction. These are things like ceiling height. A modern office building simply won’t do well with an 8 foot ceiling height. | 1/23/2019 | Free | View in iTunes |
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CleanHow to Build a Wall, (Or Tear One Down). | The US is building the most expensive wall in history. But it's not the one on the front page of every newspaper. The proposed wall along the US Mexico border an expensive undertaking. The proposed budget allocation is a little under $6B. That’s a lot of money. In context, it represents less than 0.1% of total federal government spending. Spread over two years, it’s less than 0.05% of total federal government spending. It is a rounding error on a rounding error. When you consider the nearly 3.7M government contractors who haven’t been paid for nearly a month, the government has saved more than 21 billion by not paying those contractors in the past month. Clearly the fight isn’t about money. Whether the wall gets built or not is largely immaterial. The real wall that has already been built is inside the country. It’s the wall of political division, of hardened ideological positions. It’s the wall that exists when it becomes impossible to separate the message from the messenger. If you represent my ideological adversary, my response to you will not be conditioned by what you say, but who you represent in the narrative that’s going on in my head. In that world you might say something that I actually agree with, I’m going to disagree with you simply because you said it. In a world like that, there is no dialog, there is no listening. There is only confirmation bias, and distortion There is really only one way to destroy that wall. It involves listening. But before you can listen, you need to know all of the different forms of listening. You might think there is really only one form of listening. You’re either listening or you’re not. But in fact there are 8 forms of listening. 1. Ignoring listening You can talk all you want but nothing gets in. I am not interested in your problems, your requests, or your pleas. Don't talk to me I'm a cold brick wall. 2. Partial listening I'm listening as I do another task. I'm distracted. I may mumble a reply or absently nod my head. 3. Selective listening Selective listening involves listening for particular things and ignoring other parts of the conversation. We hear what we want to hear and pay little attention to or ignore parts of the conversation which we don't want to hear 4. Know it all listening As you try to tell me your story, I'm already filling in the blanks or offering your solutions. I know what the problem is and I have the solution. Stop talking already so you can go fix your problem and I can get on with the rest of my day. I've stopped listening and I'm thinking about what I'm going to say back to you. 5. Pretend listening I pretend to listen but have not intention of actually doing anything you say. I do not actually take in anything that you say. Are you finished yet? 6. Active listening I am engaged on our conversation. I paraphrase your words back to you and ask relevant questions. Some people think that active listening is the highest form of listening. It’s actually not. 7. Empathic listening I listen to go beyond sympathy for the speaker. I'm trying to truly understand how you are feeling, how you experience the world and events that unfold around you. Empathic listening means I’m willing to take a few steps in your shoes. It helps people feel heard and can be a corner stone to positive relationships. 8. Focused listening I'm listening to you and I want to make sure you are being understood. I want you to feel understood by me. I truly internalize and understand your words. I'm not offering any advice or solutions just fully listening. | 1/22/2019 | Free | View in iTunes |
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CleanBe Your Own News Source | On today’s show we’re talking about the news. I’m finding that in many cases the news isn’t really news. It’s not new enough to be news and it’s not old enough to be history. So what is it? It’s almost stuck in no-mans land. A lot of people, including investors rely on the news media to figure out what is going on in the marketplace. There’s no doubt that there is a lot of good content out there in the news. But there are a few problems with that process. As I’ve been working on the podcast for about a year now, I’ve noticed a few things: 1) The major news outlets can’t afford to focus on local. The audience is too small. The business side of journalism has changed so much that increasingly news outlets need to focus on a much larger audience. The best example of that is Jeff Bezos purchase of the Washington Post. He has used his knowledge of the internet to transform that newspaper from a local Washington print publication to a national online publication with over 12,000 pieces of new content per day. But the problem with appealing to a wide audience is that you end up quoting national statistics. As you know, real estate isn’t a national business. Its a local business. In fact its a hyper-local business. What’s happening in Pocatello Idaho is irrelevant in Chicago or Nashville. These outlets resort to reporting things that frankly is so diluted that it adds very little value. A story about interest rates which affects everyone nationally is about all they can truly report on that is of broad interest. I’ve now come to understand why the Wall Street Journal has such a dismal real estate section. But here’s the key. When I notice something specific in a local market, I’ll report it. While rent control in NY may not apply in Phoenix Arizona, there are political voices all over the country that agree with what is happening in New York. It’s local and specific, but it’s also universal. But you the listener have to connect the dots and determine if it applies. 2) In the process of creating the content, I have my finger on the pulse of what is going on in the marketplace. It doesn’t work for me to simply quote USA Today or the Globe and Mail on the podcast. I would not adding much real value if I did that. I’ve discovered that I’m seeing real trends by talking to other investors. I’m able to figure out what is happening in the market before it gets reported in the news. This was illustrated very clearly with two episodes in the recent past. On January 4th I put out an episode on the impact that student debt is having on delaying home buying for the current generation of university graduates. This week, the Federal Reserve came out with a statement that also reported the same phenomenon. In the past month I reported that one title agency in silicon valley had seen an 80% drop in closings in a month. That’s a huge shift in transaction volume in a very short time period. On Friday, the Wall Street Journal published a story that homes for sale inventories have risen dramatically in a number of markets across the country. In San Jose California, for sale inventories increased 131% in a month. My reaction to that story was “Of course. I saw that coming a full 4 weeks before it appeared in the news." I saw the student debt issue long before the Federal reserve came out with their report which was widely covered in the news. The reason I’m telling you all this is because I’m not doing anything special except paying attention. If you’re a serious investor and you are in the flow of what’s happening in the marketplace, you don’t need to rely on the news to draw conclusions. You can rely on your own senses. You will see things more clearly and sooner if you just trust your own eye sight and your own ears. More importantly, you will see with greater clarity than | 1/21/2019 | Free | View in iTunes |
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CleanDistressed Loans with Deann O'Donovan | Deann O'Donovan is the CEO of AHP Servicing, a Chicago based company that specializes in rescuing distressed loans. The company is crowd funded and combines a unique business model and an innovative funding model. You're going to love this episode. | 1/20/2019 | Free | View in iTunes |
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CleanLive Q&A - How to Become a Developer | This episode was recorded live as part of a keynote address to a real estate investment club in Lancaster, PA. An audience member asked a great question on how to become a developer, and a followup question on how to create the track record to attract investment capital whether it is debt or equity. Two great questions. Check it out. | 1/19/2019 | Free | View in iTunes |
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CleanPrice Waterhouse Coopers Forecast for Senior Housing | On today’s show we’re talking about some of the excellent global research performed by accounting firm Price Waterhouse Coopers. Two days ago we talk about the worst asset class in the PWC survey, that is retail. Yesterday we talked about Warehousing and Fulfillment which are at the top of the PWC survey. Today we’re talking about senior housing. This is an area where my company is making major investments this year. The senior housing and care sector is still generating buzz, and frankly has been for several years. Who is investing in senior housing? PWC reported that debt providers set aside generous annual allocations. This is consistent with my findings as well. Virtually every lender I speak with mentions that they have a strong interest in senior housing. Nearly 60 percent of the three largest health care REITs’ investments are in senior housing. This year has seen a lot of new capacity. A wide 16-percentage-point difference exists between occupancy rates for the most occupied senior housing market (San Jose at 95 percent) and the least occupied (San Antonio at 78.6 percent). Much of the excess capacity has been built in Sun Belt cities like Phoenix, and parts of Florida. But this over supply is mostly in primary markets. Some secondary markets and tertiary markets have been largely ignored and are facing acute shortages. We talk about senior housing as if it is a real estate play. It’s actually a service business with a real estate component. From an expense standpoint, the number one expense is staffing. In that sense senior housing looks more like a hotel than, say, an apartment building. The second major challenge in senior housing is labor. Increasingly, operators are reporting labor shortages in all occupations, ranging from care managers to executive directors. In the last year, average hourly earnings rose 2.7 percent—up from 2.5 percent on average in 2017. The key in senior housing in senior housing is attracting and retaining talent. Wages are part of the equation, but even more important are working conditions. That’s where we believe our senior housing model is superior not only for residents, but also for staff. There’s no question that many of the major players have built new capacity ahead of the demand. Much of this new capacity has been in primary markets. Taken in its entirety, it is a time for a cautious near-term approach in the senior housing sector. Currently, some operators face challenging market conditions since supply has outpaced demand. Operators and investors who underwrote deals with 90 percent or 95 percent stabilized occupancy rates a few years ago are facing pressures as they open into markets with 85 percent or lower occupancy rates. In a time of rising expense pressures, where average hourly earnings for assisted living operators are increasing at a 5 percent annual clip, achieving NOI expectations may be difficult. In fact, there was recently a highly visible bankruptcy of an operator in the San Antonio market. Many in the industry were surprised. Frankly I was not. Some of these new complexes are taking years to fill. You’ve heard me beating the drum of the supply and demand, supply and demand. It’s crazy to me the number of people that only seem to analyze the demand side of the equation when making investment decisions. That’s very dangerous. On the other hand, investors who have partnered with solid operators located in strong markets are seeing outsized investment returns. Take a look at senior housing, but do so cautiously. | 1/18/2019 | Free | View in iTunes |
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CleanSupply Chain Investing | On today’s show we’re talking about some of the excellent global research performed by accounting firm Price Waterhouse Coopers. They recently published their latest prediction reports for a number of geographies around the world. Yesterday we talked about the worst asset class in the PWC survey, that is retail. Today we’re going to the opposite end of the spectrum. It’s really a story about changes in the retail environment. Where there are changes, there are winners and losers. Retail’s loss is a win for warehousing and fulfilment. | 1/17/2019 | Free | View in iTunes |
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CleanThe Worst Investment Asset Class in 2019 | On today’s show we’re talking about some of the excellent global research performed by accounting firm Price Waterhouse Coopers. They recently published their latest prediction reports for a number of geographies around the world. The data reflects the views of individuals who completed surveys or were interviewed as a part of the research process. The data comes from 1630 people who responded to the survey or were interviewed individually. Over the next several days we’re going to pull out a few significant items that are worth noting from this 108 page report. The top areas for investment according to the PWC report are: Warehousing Fulfillment Workforce housing Senior Housing Midscale hotels Medical office I find it comforting that my company is currently investing in 4 out of the 6 areas listed as the top asset classes for 2019. We will talk more about these other asset classes on future episodes. Today we’re going to zero in on the worst asset class on the list. Heading up the worst asset classes are virtually all forms of retail, with suburban malls and big box stores at the worst end of the list. The buzzword in retail is Experiential retail. “You will see a lot more experiential retail. You need to give people a reason to go to a retail location.” So what is experiential retail? It combines an element of retail and entertainment. A great example of that is "House of Vans" in London. It certainly lives up to the company motto of being “off the wall”. Vans is a maker of athletic shoes that target the skateboarder market. House of Vans is a location where art, music, BMX, street culture and fashion converge, you can find almost everything you can imagine across the 30,000 square feet building. There’s a cinema, café, live music venue and art gallery, the bottom floor holds the most unique feature of the building; the concrete skateboarding bowl, mini ramp and street course. While some retail experts are claiming that experiential retail is the future, I don’t buy it. There’s no question that a few retailers will transform the buyer experience through innovations. That will no doubt help that specific retailer. It will do almost nothing to help The owner of retail real estate. The price per square foot you can get in rent as a retail landlord is a function of supply and demand. it’s very simple. If there is too much supply and not enough demand, prices will fall. Many businesses that have traditionally used a large format to carry local inventory are shrinking their foot prints. When you extract the direct holding cost of the inventory, the cost of the real estate to house the real estate is a significant cost. By using warehouse space instead of retail space to store that inventory, retailers can experience the compounded savings of the higher storage density and the lower cost per square foot. Together the real estate component can be 50 x cheaper. That’s why e-commerce companies like Amazon can beat retailers with even higher shipping costs. They’re real estate costs are a fraction of the retailers. That’s why I believe there will be a surplus of retail real estate for decades to come. When you obey the laws of supply and demand, the market will tell you what’s going to happen. | 1/16/2019 | Free | View in iTunes |
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CleanMore Rent Control Insanity | I personally don’t have a political affiliation. Politics in both Canada and the US have become increasingly polarized in recent years. If you’re like me, where I’m fiscally conservative, and socially liberal on some items, but not all, there’s no political party that speaks directly to me. In fact, I would propose that most people don’t agree 100% with either of the political extremes. One topic I’m particularly passionate about and you’ve heard me speak repeatedly is the topic of rent control. It’s not because I’m a landlord. It’s because history has proven time and again that rent controls don’t work. They don’t produce the desired results. Rent controls treat the symptom, not the root cause. If properties are not affordable, it’s because the free market balance of supply and demand has pushed prices up. Gov. Cuomo in New York delivered a blow to both landlords and tenants on last week by pledging an end to vacancy decontrol, a 24-year-old policy that has removed 150,000 apartments from rent regulations in NY state. Tenants will be celebrating, but only for a short time. The problem is that governments can’t compel investors to make investments where they will lose money. But the entire state government — including the Senate and governor’s office — are now in Democratic hands, with newly elected progressives pushing for much stronger tenant protections. Cuomo responded “yes” when asked on WNYC radio whether he would sign a law to abolish vacancy decontrol if it passes the Legislature. He said “One of the big pieces in an affordable-housing program is going to be a reform of the rent regulations. It doesn’t provide additional units of affordability to the extent we need. I still believe in production and supply. But reforming the rent-regulation system, especially vacancy decontrol, can make a major difference.” Vacancy decontrol was implemented under GOP then-Gov. George Pataki. At the time, Republicans sympathetic to landlords had leverage by threatening not to renew the entire rent-stabilization law, which was expiring. Here is the story of a property located in mid-town Manhattan. It’s a 6-plex in the Murray Hill neighborhood on the east side. I took a close look at this property last week. This neighborhood is one of the more expensive areas in Manhattan. Here are the particulars on the property. It’s a 6 unit building. The building is fully occupied and the apartments rent at $1,136 per unit per month. This is an area where apartments routinely rent for over $4,000 per month. The asking price for the property was $4.5M. There is no way to justify the purchase of the property as an income property. The numbers don’t make any sense. The listing was being promoted as a development site with significant air rights above it. That means that someone could theoretically go vertical, or buy one of the neighbouring properties and combine it with this property. That might create a large enough floor plate to build an actual apartment building with some scale. On its own, it made no sense as an income property, and it barely made sense as a development site. If that property sells for anywhere near the $4.5M asking price, it will be redeveloped into a condo building, and those affordable units will disappear from the market forever. I was in New York last week speaking with lenders and hedge fund managers. I heard about several rental property transactions scheduled to close in the next 60 days were cancelled by the lender. The lenders are not willing to put money at risk when the math doesn’t work. We know that under rent control, assets degrade in value. The lenders I spoke with don’t want any part of that. Government can’t mandate banks to approve a loan that is too risky. If there isn’t financing for these income properties, they will get rede | 1/15/2019 | Free | View in iTunes |
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CleanWhat Softwood Lumber Crisis? | On today’s show we’re examining the price volatility of a critical building material and the impact that it can have on the cost of both construction and renovation projects. In March of 2018, the White House imposed tariffs on Canadian softwood lumber. Overnight, prices jumped nearly 25%-30%. The impact on the construction industry was felt immediately. Softwood lumber makes up about 16% of the cost of new home construction historically. So the overall impact of that price increase was about 4% on the total cost of building a new home. It’s a significant increase in less than 30 days. After that, regular market forces continued to play a role throughout the year. There is an annual pricing cycle that is tied to demand. Demand for construction materials is lower in the 4th quarter and the 1st quarter of each year. Every year, prices fall in November and December, and they pick up again in the second quarter when construction activity heats up the next spring. Today, prices for softwood lumber are at their lowest level in more than a year. The assertion that low pricing from Canada was the reason why softwood prices were so low is, in retrospect a bit of a red herring. The real story starts back in the 1980’s, when there were millions of acres of timber land planted in the southeastern US. The managed forests were planted as investments by companies that promoted forestry as a great long term investment. So much forest was planted at once, that many of these trees are now of harvesting age at the same time. The surplus has crushed timber prices in Mississippi, Alabama and several other states in the southeast. At the depths of the 1980s farm crisis, when prices for agricultural commodities plunged, the Reagan administration launched the Conservation Reserve Program. Starting in 1986, it promised farmers annual payments of about $30 to $50 for each acre they planted with trees or grasses. By 1994, more than 2.2 million acres of farmland in the South had been converted to pine forest. Other federal programs added about 2.5 million acres more to the supply. It has been a big loser for some financial investors, among them the country’s largest pension fund. Calpers spent more than $2 billion on Southern timberland, and harvested trees at depressed prices to pay interest on money borrowed to buy. Calpers sold much of its land this summer at a loss. The 2008 crisis worsened the situation. We went through years with little new home construction in many markets. That depressed demand prompted many owners to postpone harvests. Numerous sawmills closed. Even with new demand from the housing recovery, there remains about 25 years worth of supply in the Southeast. Adjusted for inflation, the price of Southern pine is down about 45% since 2007, Saw timber used for making lumber, is at a 50-year low. To put this in perspective, today tree growers are getting about $20 per ton of wood headed for the mill. The finished product you buy at Home Depot in the form of kiln dried 2x4’s is being sold at $2.69 per 8’ board. That comes to a price of $489 per ton. That’s a huge markup. Most land owners are stuck with whatever the nearest mill is paying. Hauling logs cross-country chasing better prices isn’t an option. Waiting for better prices has its own risks, because after a certain age, trees become more susceptible to disease. The constraint in lumber supply for construction is not the supply of raw material. The saw mills are the bottleneck in the supply chain. Georgia Pacific and Canfor have both announced billions of dollars of new saw mills and plant expansions. If you’re looking to undertake a new construction project, it definitely pays to shop around. It’s clear that the lumber industry is filled with inefficiencies. It also pays to shop at the right time of year. You can definitely get some goo | 1/14/2019 | Free | View in iTunes |
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CleanCell Tower Assets With Mark Roscioli | Mark Roscioli is the CEO of 17 Mile, LLC. His company specializes in buying and selling assets that have cellular towers as part of their makeup. This is one of the most fascinating ways to invest in real estate. It's highly specialized, but also one of the few truly passive businesses in the world. This brief conversation with expand your mind in ways you're not expecting. | 1/13/2019 | Free | View in iTunes |
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CleanStudent Housing with Nick Legault | Nick got his start in development with student housing. His very first project generated enough cash flow to enable him to transition from an employment situation to full-time investor in less than one year. Nick's story is not typical, but is a powerful example of what is possible with focus and drive. You can connect with Nick directly at buildinginvestments.ca. | 1/12/2019 | Free | View in iTunes |
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CleanSave Money By Spending Extra | On today’s show we are talking about how a more expensive product can often be the least expensive solution. There’s so many examples when people try to save money they actually don’t succeed in the end. This is one of those counterintuitive situation. On today’s show I’m going to challenge some loosely help beliefs. When I challenge loosely held assumptions, you’re probably going to say, “Wow I didn’t know that”. Most people feel energized and enlightened by challenging a loosely held belief. But if I challenge a closely held belief, the reaction is likely to be the opposite. Most will flatly reject a challenge to a closely held belief. It’s too threatening to have some core ideas turned upside down. Today’s episode starts with a story about the fireplace in my parent’s home. In my parents house when I was growing up, we had a wood burning fireplace I love the smell of the burning spoke. I loved the radiant heat sitting only a few feet from the fireplace and I love opening the steel curtain and pokey at the fire with the steel poker. From 1985 on words, it was almost impossible to find a newly built home that had a wood burning fireplace. They were all natural gas fireplace. It seems strange to me that a more expensive product, that is the gas fireplace would win out over a wood fireplace which in many ways is more desirable. You would think that any home builder who is building a new home would be looking to save money. If they are going to provide a fireplace as a feature, the least expensive solution that meets that requirement is what I would expect most volume home builders to supply. Why would they use a more expensive gas fireplace. It needs a gas supply, a controller, decorative fake ceramic logs, and of course a fire box. A wood fireplace is just a metal box with a brick liner. It’s gotta be less expensive. All of that is true. But here’s the problem. When you have a wood burning fireplace, you need to build an entire chimney. Whereas the a natural gas fireplace can be direct vented to the exterior. There is no chimney required. When you take into account the additional cost of the chimney, it turns out that the gas fireplace start to look less expensive overall, even though the fireplace insert is much more expensive. Here’s another one. The conventional heat of an apartment is done with a furnace. The cooling is done with a centralized air conditioner. There is a lot of framing and ducting required to distribute the heat and cool air from the furnace heat exchanger throughout an apartment. In recent years, we have started to build using the European style mini-split systems. These are both a heat pump and an air-conditioner in one. The downside to these units traditionally has been that they are not traditional. Some don’t like the look of the panel on the wall. These systems are more expensive than the traditional furnace and air conditioner. But when you take into account the fact that you eliminate all the extra framing and duct work, these systems can in fact be less expensive. Not only that, these systems give you individual temperature control in each room. You don’t need to spend money heating or cooling rooms that you’re not using. So while they’re more expensive, in reality they’re much cheaper. What do all of these examples have in common? The local optimization of cost gives way to a bigger picture optimization. If you elect a more expensive solution locally, but can eliminate another cost element entirely, the result can be a significant savings. But it requires a change in context. Finding the cheapest material is based linear small thinking. Finding the cheapest solution requires bigger thinking. As you’re thinking about that, where could you realize huge saving by spending a little more? | 1/11/2019 | Free | View in iTunes |
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CleanWhat If You Made a New Sale Each Month? | Today’s episode is the story of how you may consider collecting rent each new month. Rental income is much like the income a grocery store receives from its clients. Client goes to the grocery store and buys fruits and vegetables, maybe some bread and butter. It is recurring income. The customer is hungry on Monday when they go shopping. By Tuesday, they’re hungry again, and again on Wednesday. Each time you go to the grocery, the store does what it can to earn your business. They make sure the fruits and vegetables are in good condition, displayed in an attractive manner, kept from spoiling by being chilled to a lower temperature. If the bananas look terrible and beat up, you probably won’t buy bananas today. Imagine if the grocery store experience was conducted the way some landlords collect rent on the first of each month. The grocery store isn’t entitled to the tenants money. The grocery has to deliver value each and every day to earn your business. If they fail to do so, you will shop elsewhere. What if, you asked yourself, what could I do as a landlord that would allow my tenant to clearly remember the value they’re getting each time they the rent? What if each month’s rent was treated as a new sale. No sense of entitlement. What would be different? | 1/9/2019 | Free | View in iTunes |
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CleanUnfair Government Rules | On today’s show we’re talking about the challenges that governments face in creating rules that are appropriate and fair. One view of the world is that rules should be uniform. One set of rules for everyone. That way, nobody can claim they were unfairly harmed by a rule that’s the same for everyone. Fairness should be at the core of our legal system. If you look at what most local governments deal with, overwhelmingly it’s real estate. If you read the city council meeting minutes for virtually any city in North America, you’ll find that the overwhelming majority of the business for city council has to do with land use. There’s the occasional item dealing with parking, business licensing, or keeping pets on leashes. But overwhelmingly, cities deal with real estate. Here’s where it gets tricky. You often get rules created at different levels of government that can be in direct conflict with each other. You can also get rules that are NOT fair to everyone because the circumstances locally on the ground are different. If policy changes are brought into place to cool off the economy, or cool off a real estate market, that could be very appropriate for a city like Vancouver or Toronto. At the same time when Toronto experienced an 11.5% increase in prices, Calgary’s prices were essentially flat. Applying the same medicine to both markets might not be appropriate. Housing affordability issues in Toronto and Calgary are not the same. A set of rules that limit development in a dense urban situation might not be appropriate in an area of declining population. You may want the opposite to stimulate the growth of jobs and population. OK. So we get that rules should not be uniform. You can consider rules to be a set of constraints that are being placed upon you, attempting to limit what you can and cannot do. Another way to look at government rules, is as a set of incentives. Government in essence is showing you the path to make investments. | 1/8/2019 | Free | View in iTunes |
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CleanWhat? Rent Control on Commercial Property? | We typically think of rent controls being imposed for residential leases. Housing affordability is a real issue. Access to housing is considered by many to be a basic human right. Landlord tenant laws all over North America have been enacted to protect both the rights of landlords and tenants. The latest twist being pushed in City Council in NYC is a proposal for commercial rent control. This would give small business tenants the right to demand a 10 year lease. Commercial rent control ended in NYC in1963 when a state law mandating it expired. Councilman Ydanis Rodriguez, who is sponsoring the new version of the Small Business Jobs Survival Act, claimed his bill is “not commercial rent control,” adding it “is about immigrant rights … and improving the small business climate in New York City.” The Mayor is opposed to the bill. But Mayor de Blasio suggested a few months ago that the city is considering a “storefront registry” and a “vacancy tax” that would penalize landlords who leave stores empty for lengthy periods. | 1/8/2019 | Free | View in iTunes |
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CleanA New Doorbell Could Rent Your Property | Customer perceptions about a rental property are formed in the first few seconds of viewing a property. Increasingly, today’s customer looks online before committing to drive to a location and view a model suite. Everyone has walked into an apartment with an old looking front door, entry flooring that testifies to the thousands of footsteps that have worn a path into the finish. The old white appliances, are just yuck. The savvy property owner will make investments that show the potential tenant they are maintaining their property, and keeping the property up to date. That means making surgical investments in keeping a property up to date. That doesn’t have to mean spending a ton of money. Some of the most visible items are not expensive to replace and update. Curb appeal can be improved by simple things that draw the attention. I like shiny stainless steel mailboxes. They’re a bit more expensive than the plastic composite mailboxes. But wow, they really stand out. They last for decades and they look amazing. Kitchen counters can be replaced every few years for a few hundred dollars. If you use natural stone, granite has come down dramatically in price in recent years. You can routinely buy granite for $25 per square foot, about 1/3 of what it cost less than a decade ago. These small investments go a long way toward creating a desirable product. | 1/7/2019 | Free | View in iTunes |
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CleanThe Magical Town of Springfield | Today show is about a magical market that doesn't exist in reality. It’s the real estate market in the Town of Springfield. Springfield much like in the TV show The Simpsons is virtually any town, but nowhere at the same time. This imaginary town of Springfield is an amazing town. It is one of the hottest real estate markets in the world. Investors flocked to Springfield from all over the world. There are so many buyers and sellers. The rules in Springfield make it very quick and easy to buy and sell real estate. There is full transparency in the land title system in Springfield. So title insurance isn’t needed. Trades happen in seconds. | 1/6/2019 | Free | View in iTunes |
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CleanTurnkey Investing With Tom Olson and Josh Culler | On today's show I'm talking with two investors who live in a suburb of Chicago, but on the Indiana side of the border. They're built incredibly strong systems to manage thousands of transactions. These folks have a strong set of core values that enable them to make great decisions. | 1/4/2019 | Free | View in iTunes |
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CleanA Demographic Shift That Few Are Talking About | I predict that this current generation of home buyers will be significantly delayed buying homes compared with previous generations. Many will be so late into the home buying cycle that they will become lifelong renters. In fact, the traditional early home buyers have consisted of the most educated in our population. After all, those with post secondary education make up the upper echelon of income earners. If we go back to the 1980’s when I bought my first house, I came out of university with a good paying job and zero student debt. I was 23 years old. I was able to secure a high ratio insured loan to purchase my first house and only put 5% downpayment. I purchased a brand new home in 1987 and put down under $10,000 in cash. Within a couple of years, that home had appreciated sufficiently that I was able to sell it and move into a larger home. My downpayment had mushroomed from a mere $10,000 to about $40,000 for my second home. I was solidly on the ladder of home ownership. My first home and my second home were easily affordable within my salary. But I had no other debts. I didn’t have car payments, or student loans to deal with. If I had other debts, my home affordability would have been far less. The circumstances today are far different. The average student graduating from university with a bachelors degree has just under $40,000 in student debt. US Federal guidelines put borrowers on a 10 year track to repay their debt. But history has shown that the average bachelor's degree holder takes 21 years to pay off his or her loans. Think about it. There are 44 million borrowers who collectively owe about $1.5 trillion dollars of student debt. Will people buy a home before they've paid off their student loans? The math doesn't add up. | 1/4/2019 | Free | View in iTunes |
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CleanResidual Income Versus Earned Income | On today’s show we’re talking about automating systems in your business so that you the business owner can start to reap the benefits of the business. We’re also going to explore the differences between earned income, passive income and residual income. These are words that sound remarkably similar. But their meanings are very different. Businesses are all active businesses. There is no such thing as a passive business. Even though your local tax authority might classify income from an apartment building as a passive income, there is nothing passive about owning investment property. In an active business, the cash produced by that business is paid out to cover expenses, debt service, any preferred equity holders, and then finally the business owners. That final piece is called the residual cash, or the cash flow from the business. When we’re talking about passive versus active, we need to distinguish the amount of involvement in time required to earn that cash. Too much effort, it starts to look like an earned income situation. If there is too much owner intervention required in running a business, then it ceases to be a true business. A business must meet one very important criteria in order to be worthy of that name. You have to be able to remove the business owner from the business and for a period of time, the business can run autonomously without their involvement. | 1/3/2019 | Free | View in iTunes |
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CleanThe Trailing Spouse | On today’s episode we’re talking about making sure your spouse or partner is on board with your business goals. One of the greatest sources of stress in a relationship is when business goals are at odds with family goals. How do I know about this? My wife is a marriage counselor and encounters situations like this on a regular basis. I’ve seen several people make the transition from employee to real estate entrepreneur and lose their marriage in the process. The greatest cause of this discord is the failure to align values between life partners. The trailing spouse in business can translate into the trailing spouse in life. A trailing spouse in life can split a relationship apart. That doesn’t mean that you need to go into business with your spouse. But you do need to take the time and make sure your spouse is sharing at least part of your journey of personal and professional growth. In my case, My wife and I attend several conferences each year. That has been a great source of alignment between us. Every year my wife and I plan which events we are going to attend together. The entrepreneurial life is a journey. Experiencing that journey together is so important. We’re strongly connected in other ways. By experiencing part of the business journey together keeps us connected in the one dimension that in reality is quite separate. | 1/2/2019 | Free | View in iTunes |
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CleanBook Of The Month "E-Myth Revisited" by Michael Gerber | In order to be considered for book of the month, the book must meet a very simple criteria. It has to capable of changing you life, or your perspective on the world. Of course, whether it changes your life is up to you. You can consume the content, remark on how good it is and then continue your life without making any changes. In fact, that’s what most people do. If that’s what you do, you’re missing the point. In fact, it’s entirely possible that many of you have read it. At the same time, I’ve received enough questions lately that tell me this book will make a difference for you. Even if you’ve read it before, this book is so fundamental, that it’s worth a refresh. The book is the E-Myth Revisited by Michael Gerber. The E in the title stands for Entrepreneurship. The book is written as a narrative, as a fable. It’s the story of Sarah, a young lady who loves to bake pies. So much so that she decides she’s going to open a bakery. This is so common a story. We’re told to pursue our passion and to turn our passion into a business. There are two main characters in the story. There is Sarah, and there is the author of the book, who in this case is cast as a business consultant. What I like about E-Myth is the clarity and simplicity of Michael Gerber’s model. It’s easy to identify when one of the players in your business is out of position. It’s easy to see when the business owner is wearing to many hats. It’s also easy to see where the structure is missing. | 12/31/2018 | Free | View in iTunes |
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CleanNew Year Predictions | 2018 saw a large number of unpredictable events. Many of them were politically originated, whether it’s a steel tariff, a partial government shutdown, a regulatory change. Any time there is a change, there are winners and losers. Some are positively affected and others are negatively affected by that change. I predict that 2019 will see an expansion of uncertainty. We will have more surprises to deal with than ever before. I predict that once the economy shows signs of shakiness, central bankers the world over will return to the practice of stimulating the economy via printing money and lowering interest rates. I predict that Interest rates will peak in the first half of the year and then start to moderate in the second half of the year. At the same time, there are boundless opportunities. The business world is an all-you-can-eat buffet of opportunity. That doesn’t mean that any strategy will work in any location. Effective business plans a highly specific. Specific to a location and specific to a point in time. I predict that the new US opportunity zones will attract a lot of attention in the first half of the year as the investment world becomes educated on the rules and benefits of opportunity zone investment. | 12/31/2018 | Free | View in iTunes |
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CleanScaling your team with Jack Gibson | Jack's company has added 400 properties under management and renovated over 100 homes in the past year. Doing this successfully requires a strong team and a disciplined approach to management. I loved this conversation about how to scale your business in a short time period. | 12/30/2018 | Free | View in iTunes |
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CleanEvent Based Marketing with Adam Adams | This episode was recorded live at the Family Office Summit in Miami with Adam Adams. Adam has hosted nearly 300 events in the past two years and is a huge believer in live events. This is an approach that has attracted a large following and a significant amount of capital for multi-family apartments. In this casual conversation Adam and I compare notes on investment strategy, due diligence, and live events. | 12/29/2018 | Free | View in iTunes |
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CleanResilience in Real Estate | Today’s episode is about the resilience of real estate. This is the real life story of a vacant lot in what was once a bad area. I’m telling the story of a single property, but quite frankly this story has repeated itself numerous times, and I could give half a dozen examples. This story is a story about resilience, about what can happen if you know your market, and how you can recover a project that has run into trouble and ultimately profit from it. | 12/28/2018 | Free | View in iTunes |
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CleanBonus Book Review "The 12 Week Year" | Today’s book is “The 12 week year” by Brian Moran and Micheal Lennington. The 12 week year is a planning book on a new method for setting and achieving goals. The 12 week year redefines a year as being 12 weeks long and with each year you get a a fresh start. That’s very different from a quarter. Quarterly planning and execution operates within the context of a 12 month year and fosters the false belief that there is plenty of time to get things done. The 12 week year establishes a framework for getting things done in 12 weeks or less. Much like I’ve been advocating, in 12 weeks you’re not going to get a dozen objectives completed. You’re only going to achieve one or two. So their tools are geared towards setting and accomplishing one or two goals, not more. | 12/27/2018 | Free | View in iTunes |
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CleanHow to Spend Time During The Holidays | On today’s show we’re talking about what to do during this holiday period. If you’re like most people, you are hitting the shops to take advantage of the post Christmas sales. But you’re not like most people, that’s why you listen to this podcast. You know that saving $2 on wrapping paper for next year isn’t your path to wealth. That’s small minded thinking. For many, this time is sometimes used to catch up on reading. Taking the time to invest in yourself. Some people use it to set goals for the coming year. I definitely do this. I take the time to reflect on the past year. There are numerous goals that I had set for this year that were not achieved. I could feel bad about it. But that’s not the purpose of the retrospective. The idea here is to learn, to improve. The first step is to check if you actually had written goals for 2018. Dig them out. Take the time to write the actual results. There will almost certainly be a gap between the goals you set and the actual results. What were the themes that ran through the year? Did you suffer a setback, or were you overly optimistic? Did you procrastinate or did you fail to plan? Whatever the root cause, that’s what you want to extract from this exercise. That’s where the gold is hidden, in understanding the reasons behind why things fell short. If you didn’t set goals, the question is “Why not?” Many people don’t set goals because they can’t handle the emotional upset of falling short. They’re going to fail anyway, so what’s the point of setting goals that you won’t achieve? There are two types of goals. The first type of goal is an attainment goal. This is where you set a big goal like “I’m going to climb Mount Kilimanjaro this year”. That’s an attainment goal. The second type of goal is a habit goal. This is something that becomes a daily practice. In my experience, it’s the second type of goal that is actually more powerful. For example, I set a goal in 2018 to create a new piece of quality content each day. You’re experiencing that with this podcast. If I had set a goal of launching a podcast and achieving, say, 100,000 downloads, I don’t believe the result would have been anywhere near as good. By making the focus of the goal the creation of quality content, I believe that I’ve accomplished far more than if I had set a big attainment goal. The feedback from the listeners has been awesome, and quite frankly, it was the commitment to a daily practice that caused the greatest improvement. If I had set a weekly goal, or a monthly goal, the result would not have been nearly as good. I want you to think about the 6 roles in your life. In each of those roles you may have goals. Self Family Business Community Spirituality Friends One of the biggest and most frequent mistakes I see people make is setting too many goals. The key to achieving is focus. When we talk about goal setting, people often think we’re talking solely about business. In my experience, creating a goal and achieving it in one area has a cascade effect on other areas of your life. Only a small percentage of people set goals. Of those, an even smaller percentage even look at them throughout the year. By the end of January, the vast majority of people have fallen off the wagon and abandoned their goals. But here’s the beauty. When you set a habit goal, you have hundreds, thousands even, of opportunities to get on track. You can recommit to your goal on a daily basis. Choose one or two goals, not more. Choose to commit to the practice of working on a daily goal. | 12/26/2018 | Free | View in iTunes |
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CleanSpecial Guest, My Wife | My wife is amazing. Apart from that, she's a therapist, a marriage counsellor, a frequent guest on radio and TV on all things personal. Today's show is about managing holiday stress and establishing the mindset to have a great holiday. Have a blessed day. | 12/25/2018 | Free | View in iTunes |
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CleanNaughty or Nice | Today’s episode is focused on four items in the investment world that have been either naughty or nice. The naughty or nice list is pretty long this year, and even a small fraction would not fit in your morning espresso cup. So we’re only going to talk about 4 today. Top of the nice list. The increases in real estate prices have been nice indeed. I’m not that keen to buy at those prices, but hey, selling at high prices is very acceptable. We had several asset sales that helped strengthen the cash line on the balance sheet. Selling assets is always a hard decision. You put in all the work and the future appreciation is cut short in exchange for taking the money now. The market has peaked in many areas, and despite this, there is still tons of money on the sidelines in search of opportunities. I’m going to declare anything real as nice and anything that’s abstracted from real as naughty. That’s a timeless fundamental, that frankly was forgotten by many in 2018. In the second half of the year, more and more people became face to face with this fundamental either by choice, or whether if was forced upon them by the marketplace. There were a few particularly bad offenders, most of them fuelled by hype rather than substance. 2018 was the Year of the crypto fraud. There were 1,227 Initial coin offerings in 2018, having raised over $7.5B dollars. Last year Initial coin offerings raised $5B largely using crowdfunding. In 2018 more than 1,000 coins failed outright. The irrational exuberance of the stock market was definitely naughty this year. It caught some institutional investors in its cross-hairs. The Swiss central bank was one of the king pins. Rounding out the list, the strong economy has been pretty nice. It's meant stronger than expected rents, a high occupancies acros the portfolio. | 12/24/2018 | Free | View in iTunes |
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CleanTurnkey Investing with Jeff Schechter | Jeff Schechter runs a large scale turnkey investment business in Indianapolis. He defies some of the conventional "wisdom" regarding the benefits of multi-family over single family investing. In the dynamics of his market, his approach is the most successful and the lowest risk. There is no one way to invest in real estate. Have a listen to this conversation. You'll probably learn something. I did. | 12/23/2018 | Free | View in iTunes |
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CleanPrivate Lending with Keith Baker | Keith Baker is the host of the Private Lending Podcast. He's based in Houston Texas where he invests, lends, and works with multiple borrowers to redevelop properties. Private lending is a semi-passive business that relies upon strong systems for loan origination, and loan servicing. If done well, private lending can leverage money to generate healthy returns while keeping the active aspect of the business down to a manageable level. | 12/22/2018 | Free | View in iTunes |
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CleanGo West, Uh, I Mean East! | On today’s show we’re talking about a new report that was issued in the past week by Spectrum Location Solutions that examined the departure of more than 13,000 companies from California over the past decade. Many real estate investors look at data from U-haul to see where people are moving. But that only talks about population migration. People who use U-Haul are not the captains of industry. Of far greater importance is the migration of capital, and head offices. After all, where the head office is located ultimately determines which jurisdiction will get the bulk of the tax revenue. During the study period, $76.7 billion in capital funds were diverted out of California along with 275,000 jobs – and companies acquired at least 133 million sq. ft. elsewhere – all of which are greatly understated because such information often went unreported. | 12/21/2018 | Free | View in iTunes |
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CleanFed Increases Short Term Rates Again | Today we're talking about the latest interest rate increase announced by the US federal reserve. Fed chairman Jerome Powell announced a quarter point increase in the benchmark rate. This is despite the fact that the economic data could just have easily supported no rate increase. The forward looking guidance is about as murky as ever. They are pointing toward 2 rate increases in 2019 versus a previous forecast of 3 increases in 2019. It is widely assumed that this interest rate increase means that all interest rates are going up. But that is not necessarily the case. As real estate investors, the cost of capital is perhaps our single largest expense. Some loans are indexed to the Fed short term rate. Others are indexed to the six month LIBOR rate. Most importantly, long term loans are indexed to the 10 year US treasury bill. The rate for the 10 year treasury bill has actually fallen since September. | 12/20/2018 | Free | View in iTunes |
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CleanThis 911 Call Is Not An Emergency | On today’s show we are talking about the use of the 911 database. When a new property is developed, a municipal address is registered with the city or the county. Usually, that address is generated when the building permit is issued. Somehow, through a magical process this information trickles through layers of government bureaucracy and eventually makes its way into the 911 database. The 911 database serves a critical function for public safety. It is used by emergency first responders to locate people in distress when they dial 911 from any terrestrial phone connection. Today, the legacy phone network is a relic that maintained a geographic relationship between a phone number and a physical location. Much of the phone network’s traffic is now being carried over the Internet which has no such physical constraints. You can relocate an Internet address to almost anywhere in the world. In North America this year 80% of calls to 911 were made on cellular phones. Determining physical location with cell phones is done using radio triangulation from multiple radio towers and GPS time stamps. Nevertheless, the legacy carriers use the 911 database as part of the foundation of their physical network planning. We have a project nearing completion where the physical address has been in existence for over a year. Somehow, the entry in the 911 database has not been propagated to where it needs to be. The carrier is not willing to provision an optical fiber data connection without it. Even though it’s impossible to use an optical fiber to make a 911 call, the carrier requires it to provision the service. It has taken us months of conversations with the carrier to try and resolve the issue. We have pushed from all sides. We have talked to the city, to the office that issued the building permit, to the carrier. Nobody can seem to take ownership of solving the problem. | 12/19/2018 | Free | View in iTunes |
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CleanInvestors Hate Uncertainty | We can all agree that not everything in life is predictable. Life is full of surprises, some of the pleasant, and some of them not. It’s been said that a confused mind doesn’t buy. That’s particularly true in the world of investing. Investors seek clarity. Things that are too complicated, have too many variables, or have large unknowns are off the table. Investors are a special breed. Professional investors are relying upon their money working for them. Professional investors truly attempt to quantify what their money will do. Investors hate uncertainty. Anywhere you see uncertainty, you see falling prices. What will happen in the UK with Brexit is uncertain. Businesses don’t know if they will fall under UK rules, or European Union rules. They don’t know whether they will need to relocate in order to do business in Europe. They don’t know whether the movement of goods between Ireland and Northern Ireland will require customs and excise control. The movement of people and goods in Ireland was free, and now it could become a divided island once more. This is reflected in the falling price of the Pound sterling. It’s reflected in the falling price of real estate in London. There are so many examples. How can you bring certainty, or at least a boundary to the uncertainty? | 12/18/2018 | Free | View in iTunes |
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CleanAMA - Is Real Estate Investing Starting To Look Like Wall Street? | Another offshoot from David’s question on crowdfunding is whether the relationship based approach is going to be replaced with the faceless characteristics of the public equity markets? Are we shifting from a country club style investing where relationship is a key factor to something closer to the stock market? How should investors and fundraisers adapt in this rapidly changing technology landscapes? It’s a great question. There’s nothing intrinsic about real estate that requires a deeper relationship in order to invest. What we’re really talking about is the difference between private placement investing versus investing in the public markets. There is a fundamental difference between a public and a private offering. In a public offering, you have analysts at the major brokerage houses who perform due diligence on the financial analysis. But most investors don’t even read the analysis. They look at the consensus of a group of analysts who say things like “Buy” or "Sell", or "Hold". Sometimes they say "Overweight", or "Underweight". What on earth does that mean? There is a subtle but important difference between public offerings and private offerings. Public offerings are primarily targeted at unsophisticated investors. The additional accounting oversight, and audited financials simply tell you that the accounting is accurate. The emphasis is on the sponsors of the venture. Are they keeping the books accurately, and are they managing the funds in a manner that complies with the law. That covers one of the elements of due diligence. But what gets left behind are two of the most important aspects of due diligence. 1) Is the plan a good plan? Does it meet your criteria? What is the structure of the investment and are the assets leveraged safely with the right terms? 2) Will the market actually deliver the results that are predicted in the financial forecast? We used the restaurant analogy last week. What we’re talking about is the difference between eating at McDonalds versus the exclusive restaurant with 10 tables and a 3 month waiting list for reservations. You can’t organically scale the exclusive restaurant into a business like McDonalds. They’re fundamentally different businesses. | 12/17/2018 | Free | View in iTunes |
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CleanOpportunity Zones with Eddie Lorin | Eddie Lorin has been investing in workforce housing for most of his career and has developed close to 40,000 units so far. One of the newest innovations in the tax code, creates significant incentive for investing in areas that have been neglected. Eddie gives a really high quality education on opportunity zones and the different classifications of affordable housing. I'm going to listen to this interview more than once. | 12/16/2018 | Free | View in iTunes |
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CleanAffordable Housing with Marie Josee Houle | On today's show, I'm speaking with the executive director of an affordable housing and tenants rights advocacy group. She is someone who was invited by CBC News to be my "adversary" on a news story regarding rent control. Surprisingly, the host of the news show didn't quite know what to do when we were in agreement on most items. | 12/15/2018 | Free | View in iTunes |
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CleanAMA - Will Crowdfunding Revolutionize Capital Raising? | David from Pittsburgh asks, "We see that online investment platforms such as YieldStreet, RealtyShares, PeerStreet, to name a few, are gaining momentum. For example, despite giving somewhat modest return on investment, YieldStreet has successfully raised over 500M since the company was founded in 2015 (per their newsletter in Oct, 2018). Technology such as Uber and Airbnb can have the amazing ability to create trust between strangers in transactions, mostly with the irresistible lure of convenience. Do you think these online investment platforms, by offering the convenience of investing with a few mouse clicks, will minimize the need of some elements of capital raising mentioned in your book Magnetic Capital, such as pre-existing relationship?" David, That is a great question. In my book Magnetic Capital, I talk about 5 elements that need to met in order to successfully raise money. They are 1) Relationship 2) Trust 3) Results 4) Compelling Opportunity 5) Alignment If you start to peel back some of these elements, notably relationship and track record, they’re really sub-elements of trust. The psychological contract of trust is a complex one with a lot of layers. If you need $1M for your project, do you want one investor with a million dollars, or do you want a million investors each with $1? Mathematically, both will get you to the same result. But the approach needed for those two capital raises are dramatically different. You need to establish a lot more trust to attract $1M than just $1, even if you are raising $1 one million times. | 12/14/2018 | Free | View in iTunes |
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CleanProfitability is a Decision | Today and tomorrow are a two for one AMA episode. That is Ask me anything. I love to answer your questions, if you have a question, send it in, I’ll answer it live on the air. David from Pittsburgh has a great two-part question. His question is about the number of crowd funding startups that have launched in recent years. On tomorrow’s show, I’ll answer David’s main question. On today’s show we’re going to take a look at Crowdfunding startup RealtyShare, which announced that they were shutting down due to lack of funding. Founded in 2013, the California-based company claims to have raised more than $870 million for more than 1,160 real estate projects. Here is my take on why they went bankrupt. If they needed more funding after 5 years of operation, then they were not running a profitable business. There is no reason for a company to burn through 63 million dollars in the process of raising $870M dollars. They clearly did not have a profitable business model. I believe the reason they didn’t attract funding is because investors were unimpressed with their inability to turn a profit. You can’t run a business that just burns through investor cash and hope that investors would come back for more. The company reported that they needed the extra funding to grow. But in truth, they needed the funding to stay alive, irrespective of any growth. That tells me that the company wasn’t even close. If they could not be profitable having raised $870M, why would they be profitable in the future when they were larger? Something in the math didn’t add up. When a company loses that much money over 5 years, it’s because they decided to do so. It’s not like they intended to be profitable in year 1 and missed the target. | 12/13/2018 | Free | View in iTunes |
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CleanPatience | I’m coming to you live from Miami Florida. This week I’m at The Family Office Club Super Summit, which attracts some of the most accomplished private wealth managers in the industry. We spent several days in a large conference setting and in one on one conversation with people who manage the investments for some of the world’s most affluent. These folks have the task of making sure the money of the ultra-wealthy is put to work in a safe and responsible way. Attendees at this conference include both new money and old. Old money is the multi-generational wealth that has been passed down through several generations. New money is wealth that was created in the current generation, usually through the hard work involving the growth of an active business. In some cases, the business has been sold and a pile of cash remains where there once was a business. Once wealth has been created, the focus shifts from wealth creation to wealth preservation. The ultra-wealthy have the same problems that all investors have, only on a larger scale. If you are wondering where is a safe place to invest your retirement funds, the same can be said of the ultra-wealthy. Wealth is simultaneously patient and impatient. People of wealth are not in a hurry to make a quick buck. They don’t need to maximize their rate of return. If they make an extra 5% on their money, it’s not going to change their life. They don’t like to lose money, so its far more important to protect its than maximize the growth in all circumstances. They are willing to be patient for their money to grow. But they’re simultaneously highly impatient. They understand that time is their most precious commodity. They have thousands of details and opportunities vying for their attention. They need to be judicious about what to pay attention to. There is so much noise in the world, that they make fast decisions about what to pay attention to. | 12/12/2018 | Free | View in iTunes |
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CleanWhy The Yellow Vest Protests? | On today’s show I’m offering a perspective on the protests that we’re seeing playing out every weekend for the last several weeks in France. I managed a team of 110 employees in France for several years. In that time, I developed an understanding of French culture. Generally speaking, the idea of protesting is deeply ingrained in the French culture. In an environment where it is very expensive to fire employees, the side effect is that it is very difficult to get hired. While the French are highly critical of the state of affairs in their country, they're even more fearful of change. Maintaining the status quo is safer than any improvement. The protests are not just about a few cents per liter of higher gasoline prices. They're protesting other changes that haven't been announced yet that could affect the security of their employment. | 12/11/2018 | Free | View in iTunes |
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CleanNYC Market Softens | Recorded on location in New York City. The latest market statistics from NYC indicate a market that has peaked about a year ago and is now firmly in a downturn. We’ve gone through several years of high demand and short supply. Developers have responded with the introduction of new product, aimed largely at the upper end of the market. There is ample evidence that developers having mis-read the market demand. There has been a ton of new construction in recent years in NY. Many of those new units are priced at 30%-50% above the average sales prices in the area. They are having a difficult time selling. If you’re an average tech worker in NY, maybe at Google or soon at Amazon, earning $120,000 a year, you can probably afford a property just about $800,000 in purchase price. That’s well below the median purchase price anywhere in Manhattan. Several of the brokers that I’m tracking in the NY area are reporting that luxury properties are having a hard time selling. While the median price is high, we have seen huge price reductions for properties that have sat on the market for 12-18 months. Several luxury properties reported by the Corcoran Group have seen prices reductions of 30% or more. Even in the mid-market, we have seen a 4.5% price decrease in the past year and inventory is up 23% compared with last year. Much of that increase in inventory is in the new property market. Sales are at their lowest level since 2011. 2011 is seen by many as the bottom of the market in the last downturn. It’s hard to look at a 1BR condo priced in the millions as a bargain. But relatively speaking there may be some better pricing emerging in the market in the months to come. | 12/10/2018 | Free | View in iTunes |
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CleanEarthquake! With Special Guest Keith Weinhold | Keith Weinhold is a repeat guest on the show. He's the host of the Get Rich Education podcast, and is a contributor on the Forbes Council for Real Estate. On today's show, he's giving a personal first hand account of the magnitude 7.0 earthquake that hit his home town of Anchorage, Alaska. | 12/9/2018 | Free | View in iTunes |
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CleanSpecial Guest, Whitney Sewell | Whitney Sewell is the host of the Real Estate Syndication Show. He's a multi-family real estate investor who specializes in repositioning existing assets. Based in Northern Virginia, Whitney is part of a rare breed of folks who host a daily show. In this conversation we're talking about the opportunities that exist in the Dallas - Fort Worth market, as long as you have the right team. | 12/8/2018 | Free | View in iTunes |
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CleanBook of the Month - "Second Chance" by Robert Kiyosaki | Today is our monthly book of the month book review. Our book this month is Second Chance by Robert Kiyosaki. In order to be considered for book of the month, the book must meet a very simple criteria. It has to capable of changing you life, or your perspective on the world. Of course, whether it changes your life is up to you. You can consume the content, remark on how good it is and then continue your life without making any changes. In fact, that’s what most people do. If that’s what you do, you’re missing the point. A few weeks ago I spoke with Robert Kiyosaki about his book “Second Chance”. If you missed that episode, it’s episode 303 back on November 17. In that conversation, Robert talked about the book being a prophecy of sorts that was written several years ago. He also went on to say that circumstances have changed a lot since the book was written, and that many of the things that were predicted in that book have come true. Here’s the number one reason I selected Second Chance as the book to review this month. It’s a book about resilience. | 12/7/2018 | Free | View in iTunes |
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CleanPurchasing Real Estate Could Be A Felony? | Amazon.com deal for a second headquarters in Long Island City, N.Y., has prompted NY State senator Michael Gianaris to draft legislation that would prohibit the buying or selling of real estate based on any nonpublic government action. The idea behind the legislation is the that the law would be similar to federal securities law that bars an individual from trading stock in a public company based on nonpublic information. Senator Michael Gianaris, a Democrat who represents Long Island City and Astoria in Queens, is drafting the proposed law. It would make such real-estate transactions a felony punishable by up to four years in prison. The implications of this are far reaching. Pay attention to what your local government is proposing. | 12/6/2018 | Free | View in iTunes |
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CleanPartnership Troubles | Partnerships can be difficult. Today's episode tells the story of a very public breakup of two very experienced business people that culminated in a $700 million dollar lawsuit after four years of work, but before the project broke ground. | 12/5/2018 | Free | View in iTunes |
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CleanTaxes and The Flight of Capital | Some governments think that they can just increase taxes and more money will come flowing in. But when you have a situation where certain states and provinces have the need to raise more revenue, high net worth people can very easily relocate into a lower tax jurisdiction. This is particularly dangerous in places like California where the majority of the state income tax revenues are paid by only the top few percent income earners. | 12/4/2018 | Free | View in iTunes |
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CleanResilience in The Face of Community Opposition | Today's episode is a story of overcoming adversity when your neighbors try to block your project from coming to fruition. These types of things happen in the real world and are difficult to anticipate. They're even more difficult to overcome at times and can result in costly delays. The key is in developing the relationships within the community to help you develop creative solutions. | 12/3/2018 | Free | View in iTunes |
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CleanCalifornia Wildfires with Kathy Fettke | Today's conversation with Kathy Fettke is a first hand account of the evacuations from the wild fires in California. In this personal conversation, Kathy shares her perspective on what to do in an emergency. | 12/2/2018 | Free | View in iTunes |
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CleanLive From the Raising Money Summit | The Raising Money Summit held each year in Denver is one of the premier capital conferences in the nation. We had 22 speakers from all over the country speaking on various aspects of syndication. My talk focuses on the 5 fundamental principles of raising money. | 12/1/2018 | Free | View in iTunes |
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CleanNomadic Worker Real Estate | On Today’s show we’re talking about a new type of nomadic worker. When we talk about nomadic workers, it conjures up an image of a hipster twenty something in shorts and a T-shirt drinking a cappuccino from an Internet café in Fiji. They are living the lifestyle. I am not talking about these people. There's entirely another type of nomadic worker focused on the construction industry. These people travel around the country and work on major construction projects. Some of them specialize in heavy earth moving equipment. Some are welders, pipefitters, electricians, and truck drivers. In addition to having a high paying job, they also get a daily housing allowance. The construction companies understand that they are coming for only a temporary assignment. In areas where there are large industrial mega projects under construction, Hotels can be surprisingly expensive and in short supply. The daily housing allowance is not usually sufficient to cover the cost of the hotel or even a short-term furnished rental. These nomadic workers prefer to purchase an RV and use their daily allowance towards a monthly payment on an RV. It is a good deal for the construction workers because the housing allowance will cover more than the daily cost of an RV site and their monthly payment. | 11/30/2018 | Free | View in iTunes |
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CleanTip The Scale In Your Favour | If you’ve been a long-time listener to the show, you’ll know that I’m a big believer in the law of supply and demand. It’s one of those fundamental rules that you ignore at your peril. Like any market, hotel room prices, and short term rental revenue comes down to supply and demand. In markets where there is nothing to constrain supply, the incentive exists for more and more property owners to remove properties from long term rental inventory and maximize revenue through higher nightly short term rates. That business only works if you can achieve high enough nightly revenue, and high enough occupancy. If there is no constraint on the supply, this market will become a race to the bottom like many other markets in the sharing economy. We’ve seen it in ride sharing with companies like Uber and Lyft. As more and more cars come onto the road, you have a surplus of drivers competing for not enough riders. When that happens, prices fall to the level of tolerable pain, but nobody’s making any money. Who are the winners in all this? The owners of the sharing platform make money on each transaction, and the end consumer gets the best possible price. The asset owners get left with all the risk and marginal profit. So how do you protect yourself from these downward spiralling market dynamics? Have a listen. | 11/29/2018 | Free | View in iTunes |
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CleanThe Residential Slowdown Is Here! | The residential market slowdown is here, and the signs are everywhere. Nowhere is this more evident than in the hottest markets in the country. We’re seeing the slowdown at the top end of the market, where the days on market have grown significantly, and price concessions are the new normal. What a difference a few months and a slightly higher interest rate can make. So many investors I know have focused on flipping houses. Let’s look at what the data is showing. When you look at the market averages, you can’t see a problem. There has been a slowdown compared with earlier in the year, but average prices are continuing to increase, and days on market are still respectable. Nothing to worry about right? Remember, real estate is hyper local. That means location, and market segment. For example, starter homes focused on first time buyers will have a different market dynamic compared with luxury homes, even in the same area. It’s dangerous to look at the market averages. But if you look closely, the signs are there. One leading indicator of the slowdown is the market inventory. In San Francisco, inventory is up 42% compared with a year earlier. Seattle inventory Is up 37%. Denver is up 35%. In Nashville, the median sales price has dropped 6% since the peak in July of this year. Inventory has grown by 32% in that time. | 11/28/2018 | Free | View in iTunes |
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CleanWhat is Value? | On today’s show, we’re talking about the notion of value. The market definition is that value is what people are willing to pay. But that’s too simplistic. As investors we seek to make investment decisions that are on the right side of history. Buy low, sell high is at the foundation. So then the right question is what is the intrinsic value of an asset? In a world of falling asset values, it’s hard to make sense of any investment strategy, if you adopt short term thinking. But if you step back a little, the problem is actually remarkably simple. We know that global gold production peaked a few years ago and is falling as the world runs out of gold reserves. Other precious metals are in similar shape. So why have commodity prices for gold, silver and platinum remained so low? We know the world is running out of oil, so why are oil prices falling so rapidly? Bitcoin has lost 80% of its value this year. It lost a third of its value in just the last 7 days. If you went back through history and walked into a village and asked the towns people who is the wealthiest person in town. They would almost all point to the person who had the most land, the most livestock, or the largest number of trees. These are all forms of primary wealth. Secondary value is derived from primary value. This includes things like cash in the bank. Tertiary value is the paper that is derived from secondary value. This includes all the stocks and bonds associated with secondary value. Tertiary value doesn’t exist without secondary and secondary doesn’t exist without primary. Problems get created when the primary, secondary and tertiary derivatives of value get separated from each other. | 11/27/2018 | Free | View in iTunes |
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CleanMonopoly for Millennials | Hasbro has introduced a new Monopoly game this year "Monopoly for Millennials". In this game, instead of collecting cash, the winner who collects the most experiences wins the game. Whether it's a night on a friend's couch, the hottest restaurant or the weeklong meditation retreat, experiences are valued more than assets. The idea is to instead of getting out of the rate race, take a break from the rat race and pretend it doesn't exist for a while. That's one of the most dangerous ideas of our time. We have a responsibility to engage our young adults in a conversation that mirrors real life and shape their thinking so that they achieve true freedom. In both versions of the game, the winner achieves something that is a proxy for freedom. After all, having the complete freedom to do what you want, when you want is the ultimate expression of freedom. | 11/26/2018 | Free | View in iTunes |
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CleanGeorge Ross on Amazon Announcement | 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. | 11/25/2018 | Free | View in iTunes |
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CleanSpecial Guest, Chris Martenson | 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. | 11/24/2018 | Free | View in iTunes |
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CleanTop 3 Employee Retention Mistakes | 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. | 11/23/2018 | Free | View in iTunes |
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CleanSprint To The Finish Line | 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.... | 11/22/2018 | Free | View in iTunes |
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CleanWhat? Cash Flow During Construction? | 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. | 11/21/2018 | Free | View in iTunes |
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CleanBubble Headed Thinking | 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. | 11/20/2018 | Free | View in iTunes |
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CleanDenver Market is Slowing, But Remains Robust | 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. | 11/19/2018 | Free | View in iTunes |
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CleanSpecial Guest Bob Burr | 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 | 11/18/2018 | Free | View in iTunes |
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CleanSpecial Guest, Robert Kiyosaki | 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. | 11/17/2018 | Free | View in iTunes |
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CleanPartial Rent Control Relief | 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. | 11/16/2018 | Free | View in iTunes |
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CleanAmazon Comes to Crystal City | On today's show we are continuing our series on Amazon and the implications of the company's seemingly unstoppable growth. Yesterday we looked at Long Island city, an area of the Queens borough of NYC. Today, we talking about how Amazon also announced that Northern Virginia would be the site of their technology hub expansion. Specifically, Crystal City, a small compact development sandwiched between Reagan National Airport and Highway US 1 is the chosen site. This area has seen major tenants including the department of defence leave the area in the past decade. But employees will not live in Crystal City. The surrounding areas of Arlington, Reston, will be the beneficiaries of this new growth. | 11/14/2018 | Free | View in iTunes |
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CleanAmazon in New York City | On today’s episode we are examining the larger implications of Amazons Second headquarters or HQ2 to the company's expansion plans. Last week Amazon announced that they plan to split their planned Technology hub expansion between two cities instead of one. Key to Amazon growth is access to talent. The 50,000 jobs that Amazon points to create over the next several years are technology jobs. They’re looking to hire software developers, mobile content developers. This isn’t just about hiring. Let’s think ahead. If Amazon is doubling their core technology workforce which makes up the backbone of the company, they are forecasting at least a doubling of the size of the company as well. Imagine a world where Amazon has twice the market footprint compared with today. This week New York City, and Washington DC are celebrating the coming influx of 50,000 high paying technology jobs. Where there is a big winner in this game, there are numerous small losers spread all over the country. | 11/14/2018 | Free | View in iTunes |
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CleanAir B and Busted | A team of New York City law-enforcement officers swarmed a Manhattan condominium last month, issuing 27 notices of violations for illegal hotel use in one of the largest single crackdowns on short-term rentals. The raid was at the Atelier, a 46-story Midtown luxury tower located on 42nd street near Times Square. This may be a sign of what’s to come. New York and other cities are seeking to limit short-term rentals that can run afoul of local laws designed to limit hotel-style stays in residential buildings. The latest twist in the war on short term rentals is a new bill, which becomes effective in February requiring online rental services, like Airbnb, to disclose the addresses of its listings and the identities of its hosts to the city’s Office of Special Enforcement on a monthly basis. Failure to do so is subject to a $25,000 fine per listing not disclosed. How can you influence your local politicians to implement sensible controls? Listen for some ideas. | 11/13/2018 | Free | View in iTunes |
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CleanAMA - Why Did You Choose to Eat Vegan? | Today is another AMA episode "Ask Me Anything". Adam from Riverside asks “You mentioned on previous shows that you are vegan. You seem passionate about it. Would you help us understand your rationale?” That's a great question Adam. In truth, it wasn't a single decision. It was a series of small decisions made over several years. The net result of which I feel better. I have more energy. But there's a resource component to this question that is pretty compelling. Check it out. | 11/12/2018 | Free | View in iTunes |
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CleanSpecial Guest, Darren Doyle | Darren Doyle is the General Manager at Agronosotros, the parent company of International Coffee Farms. They specialize in agricultural real estate development where they own a total of 16 farms between Panama and Belize. In this wide ranging conversation, Darren educated me on both coffee and chocolate production. This was a fun and fascinating interview. Enjoy. If you want to learn more, check them out at https://agronosotros.com | 11/11/2018 | Free | View in iTunes |
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CleanSpecial Guest, Keith Weinhold | Keith Weinhold is the host of the Get Rich Education Podcast and is a contributor to the Forbes Council on Real Estate. His new book is "7 Money Myths That Are Killing Your Wealth Potential". On today's show, we discuss two of the seven myths. Check it out. | 11/10/2018 | Free | View in iTunes |
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CleanWeed Is Legal Now in Canada | On today’s show we’re going to look at the Cannabis industry. Before we jump in, many of my friends outside Canada have asked me if I’ve gone out and bought some weed yet. Sorry to disappoint you. The answer is no. It’s just something I’m not that interested in. In spite of that, the investment community is very interested in cannabis and On today’s show we’re going to look at the industry from a real estate and investment perspective. Whether you are pro or against the cannabis industry, you may feel the economic impact regardless. There is going to be demand for agricultural land and for industrial space as a result of the cannabis industry. If you have any exposure to either of those segments, you will feel the impact. | 11/9/2018 | Free | View in iTunes |
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CleanAMA - Investments For Accredited Investors Only | Today is another "Ask Me Anything" episode. Karla asks "Many syndicators require investors to be “accredited “ . Can you share a few ways to become accredited using real estate investments? I.e . Buying SFH, etc." That's a great question, and has a legal component to it. I'm not an attorney and can't give legal advice. So please consult an attorney who specializes in securities law. But I can offer a perspective that hopefully is helpful. Have a listen. | 11/8/2018 | Free | View in iTunes |
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CleanWhen Your Subcontractor Breaks The Rules | Last month RealPage paid a $3.3M settlement with the Federal Trade Commission over allegedly failing to take adequate care during criminal background checks for potential tenants. Earlier this year, Ascenda paid $1.1M in a class action lawsuit for failing to get proper consent during employment background checks. Property owners and property managers in Illinois have received judgements against them in the thousands for failing to pay interest on security deposits usually amounting to under $10.00. All of these systems are being managed by the experts that you have hired, often blindly assuming they're doing things properly. What should you do? | 11/7/2018 | Free | View in iTunes |
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CleanBuilding On Land You Don't Own | On today's show we're showcasing a different way of developing through private public partnerships. Some transportation authorities have control over land without requiring the usual public consultation and zoning process for entitlements. If you have a dream of building a waterfront marquis property, you'd be amazed at what might be possible. | 11/6/2018 | Free | View in iTunes |
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CleanSystems Thinking and The Zone of Denial | We all face choices. The decision to accept a problem is made in an instant. It’s an instinctive reflexive reaction usually made on the basis of an emotional response rather than a rational response. If you’ve chosen to downplay the problem, then chances are you won’t deal with it until it mushrooms to the point where the problem is large enough you can no longer ignore it. Let's say you accept the problem exists and you undertake to fix it. But you're only fixing that single instance of the problem. In truth, creating a band-aid solution. But in truth there is a third type of solution that requires a different way of thinking. It requires systems thinking In systems thinking, you don’t solve a discrete problem. You create a solution that solves the immediate problem and prevents the problem from ever occurring again. | 11/5/2018 | Free | View in iTunes |
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CleanSpecial Guest, Kyle Wilson | Kyle Wilson was the founder of Jim Rohn International and was Jim Rohn's business partner for 18 years. In this casual conversation, we're talking about the birth of an entire industry and some of the marketing fundamentals that today's technologies often short-circuit. Kyle is a kindred spirit and we share a lot of the same values. I think that becomes readily apparent in the conversation. Enjoy. Feel free to connect with Kyle at kylewilson.com | 11/3/2018 | Free | View in iTunes |
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CleanSpecial Guest, Dr. Forrest Bryant | Dr. Bryant took a departure from dentistry after selling his multi-location practice and ventured into the world of real estate investing and wealth management. The High Speed Alliance is a group of Doctors and Dentists who come together several times a year in exotic locations to mastermind on investment. Listen to this great conversation on the beach on location in Sandestin Florida. | 11/2/2018 | Free | View in iTunes |
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CleanEducation Versus Sales Pitch | Generally speaking people are willing to be educated. They don’t want to be sold. They’re willing if its an area they’re interested in. If they’re not interested, it’s spam. In the movie star wars, Luke Skywalker is the hero of the story. But he needs a guide, in this case Yoda who will team him. Yoda isn’t the star of the movie. He’s in a supporting role. The problem arises when the ethics of the guide are compromised. They call it education, but they’re really training you to buy their stuff. It’s a version of bait and switch. In my mind there is a fundamental conflict of interest when you sell your product under the veil of education. | 11/2/2018 | Free | View in iTunes |
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CleanBook of The Month - Willpower Doesn't Work | We are delighted to announce that Ravi Ghanta is the winner of the 100,000 download contest and has won an autographed copy of Robert Kiyosaki’s book “Second Chance”. On today’s episode we review Benjamin Hardy’s book “Willpower Doesn’t Work”. Benjamin Hardy is a PhD student in psychology at Clemson University. His groundbreaking book shows conclusively that everything you’ve tried and failed using willpower could never succeed. It’s not your fault. | 11/1/2018 | Free | View in iTunes |
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CleanCoastal Residents Are Selling Slower Than Ever | Recent reports from numerous data sources are showing that homeowners in the US are living longer in the same place between moves. In fact, the average time in the same home has more than doubled in the last decade. In particular, the coastal areas have experienced the lowest inventories, the worst affordability and the lowest mobility. | 10/31/2018 | Free | View in iTunes |
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CleanAMA - What Questions Should I Ask The City? | John from Huntsville Alabama asks "I'm contemplating a large new multifamily development. What questions should I be asking the city to determine if my project is viable?" | 10/30/2018 | Free | View in iTunes |
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CleanSo You Want To Develop Real Estate? | I’ve been talking to a number of investors who are interested in getting into development. Today’s episode is an advisory talk on what you may want to consider before jumping into the world of development. The first thing is that you should avoid development if at all possible. If you can get the equivalent product in the market by buying and repositioning an existing asset, then that’s what you should do. An existing asset is the fast and lowest risk path. In many cases, you can buy an existing asset below replacement cost. My recommendation is a 3 step process to evolve from your first simple development project to full green-field development where you have to build everything from raw land including the infrastructure. | 10/29/2018 | Free | View in iTunes |
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CleanGeorge Ross on Stock Market Volatility | This week I spoke with George on a wide range of topics, starting with the stock market volatility. George was Executive Vice President in the Trump organization for over 30 years and he brings a unique perspective. He's been in business for over 60 years, taught negotiation at the law school at NYU for over 20 years, and is the author of two best selling books on real estate and negotiation. | 10/28/2018 | Free | View in iTunes |
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CleanLive from Panama City | Two weeks ago hurricane Michael tore a swath of destruction through this coastal community. We toured the area and spoke first hand with local residents. | 10/27/2018 | Free | View in iTunes |
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CleanWhy Must Interest Rates Go Up? | This week, The Bank of Canada increased its benchmark interest rate 0.25% to 1.75%. They also signaled increases in the future might be necessary. So Why do interest rates rise? | 10/26/2018 | Free | View in iTunes |
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CleanNew Credit Scores Are Coming | Fair Isaac Corporation, the creator of the FICO score will introduce the Ultra-FICO score early in 2019. It's designed to make it possible for millions of borrowers who marginally don't qualify for loans today to have access to credit. The idea is that it will make more credit available without increasing risk to lenders. Is this a good idea? Listen and find out. | 10/25/2018 | Free | View in iTunes |
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CleanRising Prices, Falling Asset Values | Could there be a situation where prices increase, but asset values decrease? On today’s episode we will examine this very question. In an inflationary environment, the cost of construction goes up. In fact we’ve seen very real increases in the cost of construction over the past several years. In 2014, you could routinely build new B class apartments for $88 per square foot. That’s exactly what I was building for in 2014. Today, prices are closer to $120 per square foot. It amounts to an average 9% increase per year over the past 4 years. This is during a time when government is telling us that inflation is running close to 2.5% over that same time period. The price of any item is not determined exclusively by the intrinsic cost, but in fact by people’s ability to pay. We've seen real estate prices fall all over Europe. Could this happen in North America? | 10/24/2018 | Free | View in iTunes |
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CleanAMA - How Much Passion Do You Need? | In celebration of 100,000 downloads, we're going to be giving away an autographed copy of Robert Kiyosaki's latest book "Second Chance". If you would like to enter to win, send an email to victor@victorjm.com and put 100,000 in the subject line. Today is another AMA episode - Ask Me Anything. David from Pittsburgh asks "How much passion do you need to consider moving from a passive investor to a full-time active investor?" Such a great question. | 10/23/2018 | Free | View in iTunes |
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CleanFour Headwinds Cause Housing Divergence | The broad economy seems to be performing strongly, but we are also seeing weakness in new home construction at the same time. At the root of this is money. On today’s episode we’re going to follow the trail of the money and see some of the factors that are influencing the housing market. We will eventually see this slowdown reflected in the macro economic numbers. | 10/22/2018 | Free | View in iTunes |
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CleanSpecial Guest, Tammy Mitchell | Tammy Mitchell is an expert in relational capital. If you're not familiar with that term, we break it down in detail and describe the power of developing deep and meaning relationships with people of significance. | 10/21/2018 | Free | View in iTunes |
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CleanSpecial Guest Russell Westcott | Russell Westcott is a Canadian from Western Canada who has built a reputation as an investor, an educator, and a specialist at raising capital. In today's episode we're talking about exploiting new zoning rules to attain higher density and lower the cost of development. | 10/20/2018 | Free | View in iTunes |
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127 |
CleanAMA - What Do You Think of Rent Control? | The question of rent control centers around the broader issue of affordable housing.. The rates for housing have increased faster than wages have grown in the same time period. This is particularly true in major markets we're we have seen dramatic increases and real estate prices. Governments cannot force investors to make investments that lose money. When rent controls are in place, existing buildings experience deferred maintenance and new rental stock doesn’t get built. The economics don’t support new investment. Rent control is a well intentioned, but misguided solution to the the affordability problem by treating the symptom and not the root cause. Listen for some new ideas. | 10/19/2018 | Free | View in iTunes |
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128 |
CleanSears Was The Original Amazon - Are Restaurants Next? | Back in the day, items you could not find in a local department store could be ordered from the Sears Catalog. They owned the market. The Sears brands became synonymous with quality. The Sears Kenmore appliances were a rebranding of other appliances from Maytag and Amana. Sears Craftsman tools were as good as any tools on the market. They were well positioned as as retailer and in the culture of a generation. Sears problems go beyond money. The problem is that they stopped being relevant to shoppers a long time ago. An injection of cash won’t fix that. They kept looking at the retail business as a numbers game and not as a customer experience. It’s a sad story of missed opportunities. They sat on the sidelines and watched as Internet commerce devoured their catalog business. Even Walmart, late to the party has recognized that the Internet is key to their survival. | 10/18/2018 | Free | View in iTunes |
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CleanDeals Deals Deals | In the past couple of months I’ve seen a dramatic uptick in the number of deals that are coming into my email. I’m getting an average of 10 deals a day being offered to me. Most of these are not a fit. On today's episode we do a deep dive on two deals that we passed on and explain why. | 10/17/2018 | Free | View in iTunes |
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130 |
CleanWhen to Quit Your Job? | On today's show we are talking about making the transition from full time employee to full-time real estate investor. This is one of the most difficult pathways to navigate. Some people think that they will wait to accumulate enough real estate to replace their employment income and then they will quit their job. After all, real estate brings passive income, doesn't it? | 10/16/2018 | Free | View in iTunes |
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131 |
CleanSprint or Marathon, Stocks or Real Estate? | In two days last week, the stock market lost 5% of its value, and then rebounded partly on Friday. There's no question that over 100m, a sprinter is faster than a distance runner. But life isn't a sprint, and you can't sprint a marathon. | 10/15/2018 | Free | View in iTunes |
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CleanSpecial Guest, Michael Blank | Michael is the host of the very popular Apartment Building Investing Podcast and he's just written a new book called "Financial Freedom With Real Estate Investing". Michael and I have developed a friendship over the past several years and it's great to have him finally on the show. | 10/14/2018 | Free | View in iTunes |
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CleanSpecial Guest, MC Laubscher | MC Laubscher is a South African transplant, real estate investor, and host of the popular Cash Flow Ninja podcast. He has a great story. Check it out. | 10/13/2018 | Free | View in iTunes |
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134 |
CleanAMA - Should I Invest in Single Family On The Path To Multi-Family? | David from Pittsburgh asks a great question, challenging what is often considered conventional wisdom in the world of real estate education. Traditional real estate educators recommend starting in single family homes. I know why they do it. It creates an early success. It's relatively easy. But is it truly helpful? | 10/12/2018 | Free | View in iTunes |
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135 |
CleanWeWork Reminds Me of Lehman Brothers | WeWork has grown from a single location in NYC 8 years ago to now being the largest single occupant of office space in New York with over 5.3 million square feet of office space. They have a massive enterprise valuation at $20B and they have yet to turn a profit. Even though they're big, the same math rules apply that would apply to a small business. On today's episode, we dig into one area that I believe is a fatal flaw in their business model. | 10/11/2018 | Free | View in iTunes |
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CleanThe Global Ripple Effect of US Interest Rates | Today we’re talking about whether higher US interest rates cause other countries to have financial trouble, and ultimately trigger the next global financial crisis. Italy's yield on 10 year debt reached a new 4 year high this week. Pakistan has raised interest rates and signaled to the IMF that it will seek a bailout. China raised short term interest rates 5% yesterday. That's right, 5% in one day. What does all this mean? | 10/10/2018 | Free | View in iTunes |
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CleanA Rant on Bad Advice | Last week another podcast was advocating an approach that I consider to be truly dangerous. I'm not one to openly criticize others. But in this case, I felt strongly enough that novice investors should hear an alternate point of view. | 10/9/2018 | Free | View in iTunes |
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CleanThe Truth, The Half Truth, and Nothing But The Half Truth. | News headlines grab attention, they shape public opinion, and they bias the reader who only reads the first paragraph of a story. The Wall Street Journal had a front page headline "U.S. Unemployment Rate Falls to Lowest Level Since 1969". But is that really the whole story? Listen and find out. | 10/8/2018 | Free | View in iTunes |
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CleanSpecial Guest, Todd Sulzinger | Todd Sulzinger is a corporate finance executive in Silicon Valley and part-time developer. He has an intriguing project near Carson City Nevada that shows just how diversified the real estate industry can be. | 10/7/2018 | Free | View in iTunes |
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140 |
CleanSpecial Guest, Marco Santarelli | Marco Santarelli operates a turn-key investment business that spans 21 markets across the US. The focus is single family homes that provide both cash flow and growth. Check out this fascinating interview with my good friend Marco. | 10/6/2018 | Free | View in iTunes |
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141 |
CleanFishing Quotas in France Affect Real Estate in Malta | What? Really? That sounds like a tenuous link at best. Stay with me on this. I promise to bring these two together. Have a listen. | 10/5/2018 | Free | View in iTunes |
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142 |
CleanDeal Overload | I’m continually bombarded with offers to participate in deals. The vast majority make no sense. What’s more difficult is learning to say no when something is attractive enough to meet our criteria. It’s a little like the chipmunk with an acorn in each hand, an acorn stuffed in each cheek, and there’s an acorn on the ground in front of them. In order to pick it up, the chipmunk needs to put one acorn down. | 10/4/2018 | Free | View in iTunes |
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CleanThe Construction S Curve | Construction projects rarely complete in linear fashion. Sometimes, 2% of the effort can take more than 10% of the time. Modeling and predicting this project characteristic is difficult. The delays don't follow normal planning rules. On today's show we dig into a few examples of non-linear schedule impacts. | 10/3/2018 | Free | View in iTunes |
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144 |
CleanAMA - What's your take on the new NAFTA deal? | The latest revision of the North American Free Trade Agreement strengthen's the local motor industry. It's an industrial win for North American content in cars. | 10/2/2018 | Free | View in iTunes |
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145 |
CleanBook of the Month - "Who" by Geoff Smart | We're starting a new feature on the podcast where on the first of each month we'll review a new book that will transform your life of your business. This month we're reviewing "Who" by Geoff Smart and Randy Street. | 10/1/2018 | Free | View in iTunes |
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CleanWhy You Need A Coach | Coming to you live from Northern France today where we've been attending the sailing expo in La Rochelle. Today, I share who some of my coaches are and the reasons why you might want a coach to accelerate your business. | 9/30/2018 | Free | View in iTunes |
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147 |
CleanThe I Gap | The regularly schedule interview this weekend isn't available due to a technical problem. Instead, today we're talking about the I Gap. This is the gap that exists between where you are now and becoming an effective real estate investor. | 9/29/2018 | Free | View in iTunes |
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148 |
CleanWhat is Blockchain For Really? | All of the hype around blockchain technology is centered around crypto-currencies. But in truth blockchain is even more useful to solve real world problems. We explore these on today's show. | 9/27/2018 | Free | View in iTunes |
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149 |
CleanShort Term Interest Rates Are Up Again | On today's episode we discuss the impact of higher short term rates on several different aspects of the economy. There is not only a higher cost, but a real destruction of wealth. | 9/26/2018 | Free | View in iTunes |
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150 |
CleanBail In, Bail Out - What's the Difference? | Last year we saw the first test of Europe's new bank bailout system in which Santander acquired Banco Popular for just 1 Euro. Last week, The Royal Bank of Canada announced the first of a new security called a "Bail-In Bond". This bond can be converted in shareholder equity if the bank runs into trouble. What does this all mean? | 9/26/2018 | Free | View in iTunes |
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151 |
CleanChaos at McDonalds | How is it that McDonalds took 17 minutes to deliver an order for two salads that required no preparation? Listen to find out. | 9/25/2018 | Free | View in iTunes |
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152 |
CleanThe Missing Chapter | I discovered that my book Magnetic Capital is missing a chapter. In discussion with several investors and syndicators over recent months, many are having trouble connecting with high net worth individuals who could eventually develop into meaningful funding relationships. In today's episode I discuss the most critical first impression and what's important to have happen in the first 15 seconds. | 9/24/2018 | Free | View in iTunes |
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153 |
CleanGeorge Ross on China Trade Negotiations | George Ross wrote the textbook on negotiation. His book "Trump Style Negotiation" was the result of 37 years experience at the Trump Organization as a senior executive where he was responsible for major negotiations. Today he shares his perspective on the global trade negotiation. | 9/23/2018 | Free | View in iTunes |
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CleanSpecial Guest, Damian Lupo | Damian Lupo is the author of "The Qualified Retirement Plan" for Syndicators. He wrote the book to help educate the marketplace on what is possible for qualified retirement investments. | 9/22/2018 | Free | View in iTunes |
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155 |
CleanNewsletters Are Spam | Sadly, digital marketing techniques become so over-used that they very quickly fall into the spam category. Most newsletters have crossed the road and are now firmly in the spam category. How do you communicate with your customers in an effective way? How do you remain present in peoples minds? Have a listen. | 9/21/2018 | Free | View in iTunes |
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156 |
CleanHow to Talk To Your Funding Partner | Today's episode is a continuation of yesterday. So if you missed yesterday’s show, I suggest you stop today’s episode and go listen to that one first. Today’s show will make so much more sense if you do. I outline a simple 3 step process for getting an invitation from your funding partner to send the executive summary of a project. You don't want to push it on them. They should ask you for it. | 9/20/2018 | Free | View in iTunes |
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157 |
CleanDon't Be Creepy | This past weekend I was at a syndication conference in Dallas. I met one syndicator after another who were having trouble raising funds. After digging into it, I realized what the problem was. Far too many people have taken internet marketing courses. The approach you would use to sell baseball caps online are not appropriate for a $5M capital raise. | 9/19/2018 | Free | View in iTunes |
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158 |
CleanHurricane Edition | The impact of Hurricane Florence on homeowners in the Carolinas is immense with over 250,000 homes suffering damage or flooding. Flooding is widespread as some areas experienced more than 30 inches of rain. Sadly, about 10% of homes were insured near the coast, and about 1-3% in inland areas. The insurance industry will come out of this storm with little in the way of claims compared with the actual damage. | 9/18/2018 | Free | View in iTunes |
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159 |
CleanYou Can Fight City Hall | The City of West Hollywood has stopped one of the world's most iconic and revered real estate firms from operating medium term corporate housing in a new apartment building that they just acquired for $188M. The city's ruling stands in stark contrast to their own publicly stated regulations. | 9/17/2018 | Free | View in iTunes |
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160 |
CleanSpecial Guest, Ryan Wright | Ryan Wright is the founder and CEO of dohardmoney.com. They specialize in commercial asset based lending for real estate investors. In today's episode he is discussing their lending criteria, and how they decide which projects they undertake. | 9/15/2018 | Free | View in iTunes |
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161 |
CleanSpecial Guest Andy Tran | Our guest today specializes in designing and building secondary suites. These apartments can really make the difference between a home owner affording a home in an expensive area or not. | 9/15/2018 | Free | View in iTunes |
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162 |
CleanAMA - Where to Store Gold? | Adam from California asks a great question. What is your guidance for storing purchases of gold, silver and other precious metals? On today's show we talk about the different forms of precious metals investment and the benefits of one over the other. | 9/14/2018 | Free | View in iTunes |
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163 |
Clean10 Years After Lehman Brothers Collapse. Are we better off? | Most people know that Lehman brothers collapsed very quickly. But they don't really know why. Today, we unravel the sorted mystery and look for other places where similar conditions might exist in the banking world. | 9/13/2018 | Free | View in iTunes |
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164 |
CleanAMA - How Much Sleep Do You Get? | Nela from California asks a great question. "Famous entrepreneurs like Donald Trump and Elon Musk are said to sleep less than the recommended 8 hours per night. How many hours do you sleep each night?" A discussion about sleep is really a discussion about how to manage your life when you're awake. | 9/12/2018 | Free | View in iTunes |
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165 |
CleanTools to Cool an Overheated Economy | Traditionally, central bankers have used higher interest rates as a tool to cool an economy when it becomes overheated. They're trying to engineer the so-called soft landing and prevent the deep recessions that are reactions to oversupply. But these are not the only tools at their disposal. Central Bankers can also use regulation to provide finer control over the economy. While I'm not a fan of regulation, the impacts can be more surgical than the broadly based sledgehammer of higher interest rates. | 9/11/2018 | Free | View in iTunes |
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166 |
CleanTiming The Market | On today's show we're talking about how to assess whether you're out of step with the market cycle. If you are, there's a right way and a wrong way to adjust and correct for the mistake. This is a very important episode. Don't miss it. | 9/10/2018 | Free | View in iTunes |
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167 |
CleanSpecial Guest, Charlie Cichetti | Charlie Cichetti is a world leading specialist in energy efficient building design. His consulting firm based in Atlanta Georgia works on some of the most notable marquis properties in the US. Our conversation today went deep into some of the reasons why designing energy efficient buildings is important, and in particular how to create buildings that take human health into account. | 9/9/2018 | Free | View in iTunes |
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168 |
CleanSpecial Guest, Richard C Wilson | Richard Wilson is the founder and CEO of the Family Office Club. They have 20 events each year and specialize in everything having to do with family offices. Listen to this very informative conversation about high net worth money management. | 9/8/2018 | Free | View in iTunes |
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169 |
CleanAMA - Pay Yourself First | Adam asks a great question My grandmother taught me about the “pay yourself first” philosophy. What are your thoughts on this approach to allotting money for investment purposes? This is such a great question. In truth, it doesn't really mean "pay yourself first". It means establishing your values and priorities and using that framework to make monetary decisions. | 9/7/2018 | Free | View in iTunes |
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170 |
CleanInterest Rates Hold Firm, Except in Argentina | The US Federal Reserve met in Jackson Hole Wyoming last week. At that meeting Fed chairman Powell said that they were going to keep rates low as long as possible. They were looking beyond inflation for signs of excess, and so far they can't find any. The Bank of Canada also announced yesterday that they were keeping their rate fixed at 1.5% while they wait to see how the renewed North American Free Trade Agreement talks play out. The result of the negotiation could impact inflation and the balance of trade between the two nations. | 9/6/2018 | Free | View in iTunes |
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171 |
CleanAMA - Is Wholesaling a Business or a Tool in the Toolbox | Adam asks whether Wholesaling can be a sustainable business, or whether it is simply a tool in the toolbox? | 9/5/2018 | Free | View in iTunes |
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172 |
CleanWhat is a Family Office, and Why Do They Exist? | Today's episode dives deep into why family offices exist and what problems they can solve for families with wealth. It may seem like the family is simply being lazy and they would rather enjoy their money than manage it. But that's not necessarily the case. Family offices serve a very important function in preserving intergenerational wealth. | 9/4/2018 | Free | View in iTunes |
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173 |
CleanLabor Day Edition - Who Are Your Advisors? | On today's show we're talking about how to get advice. There is no shortage of opinions. But are those opinions actually worth anything? What are those opinions based on? | 9/3/2018 | Free | View in iTunes |
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174 |
CleanSpecial Guest Scott Smith | Scott Smith is an asset protection attorney based in Austin Texas. He is a real estate investor and he also works with his clients to educate them on the types of structures that minimize risk from frivolous law suits. You can learn more from Scott at www.royallegalsolutions.com/espresso where he has put together a special offer for Real Estate Espresso podcast listeners. | 9/2/2018 | Free | View in iTunes |
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175 |
CleanSpecial Guests John Lee Dumas and Kate Erickson | John Lee Dumas and his partner Kate Erickson launched the Entrepreneurs on Fire Podcast 5 years ago. More than 2,000 episodes later, and over 65 million downloads, he has one of the most successful business podcasts in existence. Today's episode is a glimpse of a mastermind call I had with John and Kate a few weeks ago. I believe it's vitally important to surround yourself with the very best people on the planet and learn from them. Enjoy.... | 9/1/2018 | Free | View in iTunes |
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176 |
CleanClean Tech and Commercial Buildings | Sometimes the best clean tech involves using less energy. On today's episode we examine 3 things that can save major expense in an office building. | 8/30/2018 | Free | View in iTunes |
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177 |
CleanAMA - Is Clean Energy Worth Investing In? | Adam asks a great question. He asks if clean energy is worth investing in? It's a complex question which requires an understanding of the linkage between energy consumption and economic output. It also requires and understanding of energy density. The short answer is yes, it is worth investing in, but which one specifically? | 8/30/2018 | Free | View in iTunes |
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178 |
CleanBIG Data | Big data refers to the mining of gazillions of unstructured data looking for trends and in some cases specific information that can give a business advantage. It's simultaneously an opportunity for business and a massive invasion of privacy for private citizens. What does it mean for you? | 8/29/2018 | Free | View in iTunes |
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179 |
CleanAMA - Is This Building a Deal? | Today is another AMA (Ask Me Anything) episode. Michael asks about a specific building that appears to be at a discount to the market when compared with similar properties that have sold in the area. This is a very common situation, and requires a structured way of analyzing in order to make a decision. | 8/28/2018 | Free | View in iTunes |
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180 |
CleanThe Real Estate Value of Great Internet Service | On today's show we're talking about how a 1% increase in total investment can create a true market differentiator that will keep clients engaged. The fact is, most real estate investors don't know how to design a world class Internet distribution network. Let's keep it a secret. Shhh! | 8/27/2018 | Free | View in iTunes |
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181 |
CleanSpecial Guests from Park Place Property Group | Matthew Mesick and Ricardo Rodriguez are the principals at Park Place Property Group in Chicago where they perform full gut renovations of homes in high value neighborhoods in the city. It's an aggressive strategy that is paying off for the young company. | 8/26/2018 | Free | View in iTunes |
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182 |
CleanSpecial Guest, Keith Elias | NFL Legend Keith Elias is my guest today. He was a star running back for the NY Giants and the Indianapolis Colts. After the NFL he went into real estate working with developers to raise capital for development projects. Today, he's back in the NFL coaching players transitioning in and out of the league. His life lessons are extremely powerful. Don't miss this episode. | 8/25/2018 | Free | View in iTunes |
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183 |
CleanAre There Any Good Markets? | Prices are so high today that you might conclude there are no good markets. Some markets like Seattle are overbuilt. Are there any good opportunities left? We think so. But it requires a very structured thought process to select a market that meets investment criteria. | 8/24/2018 | Free | View in iTunes |
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184 |
CleanWhat Can 8 Million Vacancies Teach Us? | Today there are 8 million vacant homes in Japan. How did this happen? Who should be held accountable for such a major mistake? Could it have been predicted? | 8/23/2018 | Free | View in iTunes |
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185 |
CleanThe Demographic All You Can Eat Buffet | Its estimated that only one in thirteen businesses owned by baby boomers will sell when the owner retires. The rest will shut down. 72% of business owners have no succession plan even though they plan to retire. This has to be the opportunity of the century for enterprising millennials who can buy a revenue stream under very favorable terms. | 8/22/2018 | Free | View in iTunes |
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186 |
CleanMotorcycles Predict The Housing Market | We're continuing our look at demographics as a predictor of real estate markets. On today's show, we examine the fortunes of Harley Davidson and what it can tell us about the future of the housing market. | 8/21/2018 | Free | View in iTunes |
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187 |
CleanBaby Boomers Could Crash The Housing Market | On today’s show we will be focusing on demographics as a predictor of the housing market demand. Baby Boomers inhabit 32 million owner-occupied homes in the US, accounting for two out of five homeowners in the United States. These folks are due to retire and will exit home ownership faster than any generation in history. Will this create a glut of old, badly maintained homes on the market? | 8/20/2018 | Free | View in iTunes |
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188 |
CleanSpecial Guests, David and Gina Fabry | David and Gina Fabry invest in recreational camp grounds. This is a different take on investing, and one that you probably have not heard about before. Enjoy this conversation and learn about a new asset class. | 8/19/2018 | Free | View in iTunes |
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189 |
CleanSpecial Guest George Ross | On today's show I'm talking with George Ross about making sense of the conflicting market data that is out there. Supply surplus in some areas, and major shortages across the nation. George sets me straight. | 8/18/2018 | Free | View in iTunes |
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190 |
CleanDemographics and the Stock Market | A lot about the economy can be predicted by human behavior. Demographics predicts behavior. Yet few economists look at this. They look to government as the driver for the economy. In truth, they're missing one of the biggest sources of economic activity. | 8/17/2018 | Free | View in iTunes |
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191 |
CleanThe Zoning Two Step | On today's show we do a deep dive on a strategy for getting site plan approval. We examine a specific case study whereby we got a zoning variance with a separate variance application instead of requesting the variance up front. as part of the initial site plan application. | 8/16/2018 | Free | View in iTunes |
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192 |
CleanWill Turkish Coffee Spill All Over Europe? | On today's show we're examining the impact of the currency and financial crisis in Turkey. It has the potential to create a ripple effect through-out the European banking system. Eventually, the impact could be felt here in North America. | 8/15/2018 | Free | View in iTunes |
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193 |
CleanA Rare Stock Market Rant | Today's show is a rare rant about the insanity I'm seeing in the stock market. Bubbles are formed when expectations deviate too far from the fundamentals of making money. Our case study is one of my favourite companies, Tesla. | 8/14/2018 | Free | View in iTunes |
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194 |
CleanThe Next Real Estate Downturn is Here Now. | Folks, I’m here to report that the next real estate downturn is already upon us. It’s not 18 months away or 24 months away like many have predicted. It’s here now. I’m going to show this conclusively with the example of Seattle. | 8/13/2018 | Free | View in iTunes |
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195 |
CleanMahogany Bay Village Walking Tour | A few days ago I took a tour with Robert Helms, one of the developers of Mahogany Bay Village and host of the Real Estate Guys Radio Show. This ambitious project is impressive in its own right. Even more impressive is how it was built in an environment of virtually no infrastructure. | 8/12/2018 | Free | View in iTunes |
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196 |
CleanThe Future of Money and Wealth | On today's show I'm speaking with special guest Russ Gray, co-host of The Real Estate Guys radio show. We're talking about the market cycle and how we prepare. | 8/11/2018 | Free | View in iTunes |
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197 |
CleanWill They Choose To Rent Versus Purchase? | Market analysis should examine all the potential choices a new resident could make. They could buy or rent, and they could consider more than one type of property. A complete market analysis should show you clearly all sources of competition. Otherwise you risk making flawed investment decisions based on incomplete information. | 8/10/2018 | Free | View in iTunes |
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198 |
CleanAMA - How Did You Decide To Change Career? | David from Pittsburg asks, Since you came from tech background, how did you decide to go into real estate development instead of other options? | 8/9/2018 | Free | View in iTunes |
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199 |
CleanAMA - Should you establish a rule of thumb? | Today a listener from Pittsburg asks how we can establish a rule of thumb to guide investment decisions. It's a great question. Check it out. | 8/7/2018 | Free | View in iTunes |
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200 |
CleanCap Rate Compression | On today's show we're examining a recent report from Colliers International on different asset classes across several Canadian cities. We are seeing significantly high prices. I can't seem to make sense of how investors are willing to pay these high prices. They make no sense to me. | 8/7/2018 | Free | View in iTunes |
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201 |
CleanAMA - Building Single Family Homes | On today's episode, a listener in Raleigh North Carolina ask about developing a small residential subdivision. There are a number of considerations that need to be deeply examined to determine if the project is viable. | 8/6/2018 | Free | View in iTunes |
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202 |
CleanHow Sensitive Are You? | How resilient are your projects to increases in interest rates, or construction costs, or perhaps changes in international exchange rates? There are so many variables that have increased in volatility this year that planning has become much more difficult. Performing sensitivity analysis to each of these variables is of paramount importance. | 8/5/2018 | Free | View in iTunes |
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203 |
CleanSpecial Guest, Kevin Day | Kevin Day is one of the most distinguished and knowledgeable asset protection attorney's in the world today. You will learn a great deal from Kevin as I have from just spending time with him and hearing him teach the principles and tactics of asset protection. | 8/4/2018 | Free | View in iTunes |
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204 |
CleanA $14.5 Billion Dollar Profit | Hilton Group of Hotels were recently sold from the Blackstone Group through an IPO process. They booked a $14.5 billion dollar profit on the sale. | 8/3/2018 | Free | View in iTunes |
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205 |
CleanAre Condo Hotel Rooms a Good Idea? | Having a separate deed for each room in a hotel is the latest twist on the condo concept. The question is, does the model make sense? We dive into that in today's episode. | 8/2/2018 | Free | View in iTunes |
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206 |
CleanBoutique Apartment Hotels | There are more changes coming in the hotel industry as providers become more specialized in their product offers to target the specific needs of clients. There are a number of new entrants in the hotel market with a new class of product offer, specifically addressing the need for medium term stays with fully equipped kitchens. This is a new segment worth paying attention to. | 8/1/2018 | Free | View in iTunes |
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207 |
CleanSurprise City Powers | Most people know that if you don't pay your taxes, the city will put a lien on your property. But there are 4 ways the city can extract money from property owners that may surprise you. Buckle up.... Here we go. | 7/31/2018 | Free | View in iTunes |
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208 |
CleanAMA - Infill Versus Greenfield | A listener in Pennsylvania asks which type of development do I prefer, infill or greenfield? | 7/30/2018 | Free | View in iTunes |
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209 |
CleanStay Away From The Casino | Fortunes are changing in the market, just like at the casino. The key is to recognize the difference between investing and gambling. Sales are slowing and the days on market are extending to more normal levels. | 7/29/2018 | Free | View in iTunes |
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210 |
CleanSurprise! | Today's episode is full of surprises. In truth, this is a small sampling of the myriad of surprises we routinely in experience in the world of development projects. | 7/27/2018 | Free | View in iTunes |
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211 |
CleanFacebook Takes A Tumble. I Love Real Estate | I was reminded today why I invest in real estate. Analysts downgraded their estimate for Facebook's earnings, and the stock took a 24% hit overnight. As a small investor in the stock market you have no control. But as a real estate investor, one who focuses on value-added opportunities, I feel a tremendous level of control. The fundamentals of profitability seem to be missing when it comes to valuation of many companies listed on the NYSE. Real estate isn't perfect, but I have much more control. | 7/27/2018 | Free | View in iTunes |
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212 |
CleanChinese Buyers Have Vanished | In June, Chinese investors sold more US real estate than they purchased for the first time in 10 years. This reversal marks a huge shift in a growing trend of Chinese money buying marquis assets across the country over the past 5 years. | 7/26/2018 | Free | View in iTunes |
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213 |
CleanI Won't Waste Your Time | Today's episode was recorded in front of a live studio audience at Podcast Movement 2018 conference in Philadelphia. In today's talk I outline the deliberate thinking that is behind the design of the podcast, and the daily commitment to value that most precious commodity, your time as a listener of the show. | 7/25/2018 | Free | View in iTunes |
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214 |
CleanSignals of the Next Recession | Recessions occur when producers expand in anticipation of continued growth in demand. They over estimate the true demand and by the time they realize their mistake, it's too late and they're sitting on excess inventory. How many places in the economy do you see this happening? | 7/24/2018 | Free | View in iTunes |
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215 |
CleanNew York City Walking Tour | Today I'm taking you on a walking tour of several landmark properties in Manhattan and sharing some of the history behind those buildings. My mother was an architect on two of those projects and I give you a behind the scenes look (via audio) at what those buildings entailed. | 7/23/2018 | Free | View in iTunes |
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216 |
CleanShort Term Rentals Are Under Assault Again | Yes, this time the Province of British Columbia is giving condominium corporations the power to ban short term rentals in their bilaws and fine owners or residents up to $1,000 per day. The City of Los Angeles just passed a new motion that limits owners from renting their property for more than 120 days a year, and New York City increased their budget for enforcement and will hire 50 more employees to crack down on illegal short term rentals. | 7/22/2018 | Free | View in iTunes |
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217 |
CleanSpecial Guest George Ross | Earlier this week I spoke with George Ross about the current news cycle which is very focused on the outcome of the Helsinki Summit between Donald Trump and Vladimir Putin. George has a very clear way of looking at a situation and separating what actually happened from interpretation. | 7/21/2018 | Free | View in iTunes |
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218 |
CleanDo You Have Rights To Water On Your Property? | This is one of the most complex areas of property ownership, and one where common sense doesn't apply. There are so many special cases that the same water will change ownership depending on what happens to it along its journey from the sky into the ground. | 7/20/2018 | Free | View in iTunes |
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219 |
CleanWind and Water Insurance Coverage? | In the wake of last year's Hurricanes and tropical storms, very little has changed in terms of insurance coverage nationwide. In today's episode we discuss different types of insurance coverage and the merits of each one. | 7/18/2018 | Free | View in iTunes |
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220 |
CleanDo You Have Rights to the Wind? | Is Wind part of your property? Does it have value? Can you own it? Can you harvest it? Can you sell it, or rent it? All these questions and more on today's episode of the Real Estate Espresso Podcast. | 7/18/2018 | Free | View in iTunes |
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221 |
CleanDo You Have Solar Rights? | As more and more people install solar panels, does a neighbor have the right to cast a shadow on your property? Today we're discussing the conflict between development rights and solar rights, a key due diligence item that most developers are not paying attention to. | 7/17/2018 | Free | View in iTunes |
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222 |
CleanIs Senior Housing Overbuilt? Yes, it is! | The National Investment Center for Seniors Housing & Care reported this week that the Nationwide, senior housing occupancy has reached its lowest level in over eight years. Data for the 31 primary markets shows that assisted living occupancy fell to 85.2% this quarter. New supply isn't being absorbed as fast as it's being built. So what does it mean? | 7/16/2018 | Free | View in iTunes |
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223 |
CleanSpecial Guest, Meagan Duhamel | Meagan Duhamel is an Olympic gold and bronze medalist in figure skating, two time world champion, and seven time Canadian champion. She's just a great person to hang out with and learn from. Meagan and I spent a day together this week. Some of it was recorded and I'm happy to share it with you here. | 7/15/2018 | Free | View in iTunes |
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224 |
CleanSpecial Guest, Chris Picciurro | Today's guest is a CPA who believes that being a strategic consultant is far more important than simply a commodity number cruncher. His thoughts on tax reform confirm that philosophy | 7/14/2018 | Free | View in iTunes |
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225 |
CleanInflation and the Balance of Trade | We are experiencing a new wave of protectionism, but this is really about addressing the balance of trade and minimizing the risk of a global default on sovereign debt. | 7/13/2018 | Free | View in iTunes |
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226 |
CleanBank of Canada Increases Interest Rates | The Bank of Canada has been slower to raise interest rates compared with the US. Rates are currently at 1.5%, the result of the second increase this year, and the 4th in the past 12 months. What does this mean for you as a real estate investor? | 7/11/2018 | Free | View in iTunes |
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227 |
CleanAMA - Should I Buy That Townhouse | Beau in Toronto asks about a specific market opportunity to buy a townhouse as a Joint Venture partnership. He provided detailed information about the deal and I analyzed the deal live on air after doing no more than about 5 minutes of market research. | 7/11/2018 | Free | View in iTunes |
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228 |
CleanPartnerships That Work | As business owners we need the right people in our core team. Whether they are partners, or members of the executive team, each of those people are key. How do you forge a successful partnership? There are certain characteristics that make a partnership work. If they're absent, you're in for a tough time. | 7/10/2018 | Free | View in iTunes |
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229 |
CleanThe Product of The Product | As real estate investors we often focus on the real estate aspects of our work. After all, we're real estate people, not marketers. Today, I'd like to challenge that way of thinking. I'd like you to consider why you might stage furniture in a rental apartment. It's probably not the reason your thinking. | 7/9/2018 | Free | View in iTunes |
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230 |
CleanSpecial Guest, Paul Kazanofski | Volume Flipper Paul Kazanofski is my guest today. His no-nonsense approach is very refreshing. If you are wondering how to scale your business beyond a couple of projects, listen to how paul is scaling his business. | 7/7/2018 | Free | View in iTunes |
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231 |
CleanSpecial Guest, Loe Hornbuckle | Loe Hornbuckle is the founder and principal at The Sage Oak, specializing in residential senior assisted living. I love this conversation with Loe, where he takes a very refreshing common sense approach to how senior housing should be operated. | 7/6/2018 | Free | View in iTunes |
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232 |
CleanI Can't Afford to Hire Staff Fallacy | Sustainable businesses require 7 key functions. You may be trying to operate a small business and can't afford to hire the staff, hoping someday to grow organically into a more sustainable business. You'll almost never achieve that kind of growth. There's a much simpler way, but it requires a leap. | 7/5/2018 | Free | View in iTunes |
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233 |
CleanThe Interest Rate Fallacy | Today's episode compares two different construction loans on two projects that are only a few blocks apart. One had a much more attractive interest rate, but ultimately was the more expensive loan. Yes, the devil is in the details. But in this case the details were buried a little deeper than usual. | 7/5/2018 | Free | View in iTunes |
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234 |
CleanMoney is Hard to Find Fallacy | Fallacies are mistaken beliefs. Today and every day this week we are talking about fallacies. On today's episode, we are talking about where you can find money. | 7/4/2018 | Free | View in iTunes |
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235 |
CleanThere Are No Deals Fallacy | Deals are very hard to find these days. The market is so competitive. Projects are selling for stupid prices. You could easily come to the conclusion that there are no deals. Yet, that would be a mistaken belief. | 7/3/2018 | Free | View in iTunes |
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236 |
CleanThe I Can't Afford Fallacy | A Fallacy is a mistaken belief. We all have them. They're supported by evidence that confirms our belief. Today and all week we're talking about fallacies. | 7/2/2018 | Free | View in iTunes |
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237 |
CleanSpecial Guest, Billy Brown | Billy Brown is a professional lender based in Nashville, Tennessee. Our conversation centers around how to scale your team to create a sustainable business. | 7/1/2018 | Free | View in iTunes |
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238 |
CleanSpecial Guest Brien Lundin | Brien Lundin runs the New Orleans Investment Conference, the longest running investment conference in the world. He's an investor in gold, precious metals, and real estate. He has a fascinating perspective on real assets. Don't skip this episode. | 6/29/2018 | Free | View in iTunes |
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239 |
CleanHousing Affordability in the Bay Area | San Francisco median home prices are now $1.6M, the highest in the country. In fact, a family earning less than $117,000 is considered low income according to HUD. What's going on, and what's driving these prices? | 6/29/2018 | Free | View in iTunes |
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240 |
CleanSeparating The Operating Business From The Real Estate | Most real estate has a business tied to it. Separating the business from the real estate can be very dangerous if you can't practically operate the business. You become dependent on the business for the financial health of your property. | 6/28/2018 | Free | View in iTunes |
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241 |
CleanAMA - What is a Waterfall and When Should I Use One? | AMA - Ask Me Anything. Frank from Portugal asks about waterfall payments. What are they and what are some of the most common uses in syndications? | 6/26/2018 | Free | View in iTunes |
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242 |
CleanThere's gold hidden in the walls of your home | Holding some gold in your portfolio is just a smart thing to do. How do you buy gold if you don't have the cash? What if gold later drops in value? Gold doesn't generate cash flow. Objection, objection, objection. On today's show, we discuss how to buy a large amount of gold using existing assets as leverage. | 6/25/2018 | Free | View in iTunes |
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243 |
CleanA Rural Home in France | Coming to you live from the Loire Valley in NW France. We're looking at what a second home in France might mean for a foreigner. Big changes in the market that make purchase prices attractive, and cost of ownership unattractive. | 6/24/2018 | Free | View in iTunes |
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244 |
CleanSpecial Guest, Tom Laune | Tom Laune is a financial planner, unlike any other financial planner. He fundamentally disagrees with the way the financial planning industry uses clients money to maximize their commissions. This conversation is a breath of fresh air in an otherwise mirky segment of money management. | 6/24/2018 | Free | View in iTunes |
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245 |
CleanSpecial Guest, Doris Belland | Doris is a very successful real estate investor. She lost her husband to illness and was left with $400,000 in debt. She used real estate to extract herself and her family from this predicament. She has an amazing story to tell and is a real educator. You won't want to miss this episode. | 6/23/2018 | Free | View in iTunes |
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246 |
CleanAMA - How to Change Career into Real Estate Investment | Jason asked how I changed career from corporate life to real estate investor. It's a great question and I share my journey and mistakes that I made in my early years during my transition to full time real estate investor. | 6/21/2018 | Free | View in iTunes |
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247 |
CleanWill 20 Million Square Feet Be Absorbed? | The Dallas industrial space market is expected to add another 20 million square feet of new space this year. What is driving the demand for all that space, and will it be absorbed? | 6/20/2018 | Free | View in iTunes |
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248 |
CleanSingle Points of Failure | Do you have a key team member who is so vital that a resignation would severely damage your business? Today we're talking about how to create resilience in your business to single points of failure. | 6/20/2018 | Free | View in iTunes |
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249 |
CleanAMA - Tampa Bay Market | Frank from Portugal asks about how to do a thorough job of market research on the Tampa Bay market. This is a great question and one that I get all the time. | 6/18/2018 | Free | View in iTunes |
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250 |
CleanFederal Reserve Increases Interest Rates | Federal Reserve Chairman Powell announced last Wednesday a 0.25% increase in interest rates. What does this mean for you as a real estate investor? | 6/18/2018 | Free | View in iTunes |
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251 |
CleanSpecial Guests, Chris Martenson and Adam Taggart | Today's episode is extra special. These two gentlemen are among the smartest dudes I know. They have performed some of the deepest thinking around how our world and economy functions. They've seen things that most economists have totally missed. Don't miss this episode. | 6/16/2018 | Free | View in iTunes |
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252 |
CleanSpecial Guest, Mike Ayala | Mike Ayala is one of the principals at 4 Peaks Capital Partners. They specialize in portfolio investing in mobile home parks. They've scaled their business to a high level in a short time by bringing in the right team and a strong capital base. | 6/15/2018 | Free | View in iTunes |
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253 |
CleanFire! This is NOT a Drill! | Today's episode is based on a real life situation of a fire that resulted in loss of life. To make matters worse, the owner of the property had made upgrades to the fire safety equipment in the home but still didn't meet code. They were fined and found to be liable for damages. It's such a simple fix, and one you can't ignore. | 6/14/2018 | Free | View in iTunes |
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254 |
CleanCarriage House Wealth | Secondary dwellings can be a way of increasing density without changing the zoning of residential properties. Some of the most expensive neighborhoods in the core of a city often have deep lots that have enough space for a separate building. Many cities have started to allow carriage houses as a form of legal secondary dwelling. They're a much more desirable alternative to the basement apartment. | 6/13/2018 | Free | View in iTunes |
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255 |
CleanSeller Arrogance | Sometimes a seller seems to take an arrogant position. It can almost seem like they aren't interested in selling the property. When you're dealing with a seller, it's important to understand both sides and how to negotiate assignment of responsibility for any uncertainty that may exist during the pre-phase of the purchase contract. | 6/12/2018 | Free | View in iTunes |
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256 |
CleanA 1% New Construction Tax | The City of Philadelphia is talking about doing away with a 10 year property tax abatement and imposing a 1% tax on new construction projects across the city. The move is designed to raise funds for affordable housing. What are the consequences of such a tax? Will it work? | 6/11/2018 | Free | View in iTunes |
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257 |
CleanAMA - How to Win in an Inflationary Environment | AMA (Ask Me Anything). A listener from California asks about whether it's safe to hold debt in an inflationary environment. We measure inflation as an increase in prices. In truth, it's a devaluation of the currency. Savings become worth less. Debt goes down in value as well. Hard assets appear to go up in price because the money is worth less. In today's episode I show you the new rules of the game. | 6/10/2018 | Free | View in iTunes |
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258 |
CleanSpecial Guest, Robert Kiyosaki | I had the privilege of spending several days with Robert Kiyosaki on the Investor Summit at Sea. There is nothing quite as intense as an early morning article study with Robert. In this episode we talk about being a life-long student, and the true meaning of team. | 6/9/2018 | Free | View in iTunes |
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259 |
CleanSpecial Guest, Seth Mosley | Seth Mosley is a Grammy Award winning musician, song writer, producer, and real estate investor. Seth and I spent a day together in Nashville at the Music and Money investment group. Our conversation centered around the interplay between his main gig in the music industry and a profitable side hustle in real estate. | 6/8/2018 | Free | View in iTunes |
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260 |
CleanDistortions in the Market | Today we are examining distortions in the market. These distortions result in many sellers putting a property on the market and asking too much for it. But you can’t blame the seller. They are simply trying to maximize their profit. Distortions in the market are everywhere. One of the biggest contributors is lack of knowledge. There is a fallacy that if a single property sold in your immediate area for $100,000 more, your property is now worth $100,000 more. That's not the case. You need sustained averages. The problem arises when you're dealing with a small number of transactions. There isn't enough data to create a statistically valid average. What do you do? | 6/7/2018 | Free | View in iTunes |
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261 |
CleanAsk Me Anything. Should I Attend a Family Office Conference? | A listener in NYC asked whether they should attend an upcoming family office conference. What are the chances of closing a deal at that conference? Is it a waste of time? Such a great question. I answer it in the context of the 5 principles of raising capital. Straight out of my book Magnetic Capital. | 6/6/2018 | Free | View in iTunes |
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262 |
CleanShort Term Rental Case Study | Short term rentals are under assault by many local governments. It's crazy to make long term loan commitments in an uncertain regulatory environment. Today we show how you can determine whether the short term rental market in your city is a good bet. | 6/5/2018 | Free | View in iTunes |
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263 |
CleanRecession Resistant Asset Classes | I’m talking about what assets can you buy when we are at the top of the market. When the recession has already hit, and prices have fallen, there will be bargains in multiple asset classes. That market bottom discussion will be for another day. What we're looking for are assets we can buy today that will continue to hold their value and perform well when a recession hits? | 6/4/2018 | Free | View in iTunes |
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264 |
CleanCounter Party Risk | On today's episode we examine what is counter party risk and how even a stress test of your own balance sheet or your bank's balance sheet doesn't tell the full story. | 6/3/2018 | Free | View in iTunes |
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265 |
CleanA $30,000 Surprise Assessment | We're in front of a live studio audience, interviewing Mary Brauner who lives in a condo complex that handed each unit owner a $30,000 surprise special assessment, on top of condo fees that were already $800 per month. This situation is becoming increasingly common in older condo buildings, and we talk about the conditions that conspire to make this ugly surprise a reality. | 6/2/2018 | Free | View in iTunes |
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266 |
CleanSpecial Guest John Lee Dumas | Last week we spoke about Puerto Rico. When I was there I had the chance to meet face to face with John Lee Dumas, host of the Entrepreneurs on Fire Podcast. He just completed over 2,000 episodes and 65 million podcast downloads. Definitely at the top of his game. Love this conversation with JLD! | 6/1/2018 | Free | View in iTunes |
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267 |
CleanCan Italy Help US Real Estate? | The recent election in Italy has thrown Europe into turmoil. The result has been a flight of capital from the Euro in US Treasuries, lower the yield on 10 year T-Bills. Since many commercial loans have their rate linked to the 10 year Treasury rate, a fall in T-Bill rates directly helps US Real Estate Investors. See how you can capitalize on this temporary situation. | 5/31/2018 | Free | View in iTunes |
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268 |
CleanUnder-Serviced Segments of Student Housing | We continue our look into student housing. The US Department of Education publishes reports on university enrollment. We do a deeper dive into their numbers are look at some specific opportunities for investment. | 5/30/2018 | Free | View in iTunes |
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269 |
CleanIs Student Housing Facing a Headwind? | University enrolment fell by over 200,000 in the past year, marking the 6th straight year of decline. Overall, student enrolment in universities has fallen by 2.6 million students compared with 2011. That's a huge decline. If enrolment is falling, it stands to reason that demand for student housing will also decline. How to make sense of the numbers and decide where to invest? | 5/29/2018 | Free | View in iTunes |
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270 |
CleanStudent Housing Investing | Today we're talking about student housing. This is one of my favorite asset types. But not everyone feels that way. I share why I like it and what it takes to run a successful student housing portfolio. | 5/28/2018 | Free | View in iTunes |
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271 |
CleanAmazon is Coming to Town | CTV News reported that a large parcel in the East end of Ottawa will be site of a new 1M square foot warehouse. Sources close the project have confirmed off the record that the occupant will be Amazon. This is part of a growing strategy across North America for local fulfillment centers as Amazon strives to reduce their delivery times for Amazon Prime customers. The question is, how can you capitalize on this as a real estate investor? What opportunities does it create? | 5/28/2018 | Free | View in iTunes |
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272 |
CleanSpecial Guest George Ross, Commentary on the News | George was Mr. Trump's advisor and right hand man for many years. In today's episode he's sharing his perspective on what we're seeing in the news media. I’m sharing this with you to underscore how difficult it is to make sense of what is being reported in the news. I believe it’s important for everyone, including you to consume content critically. Ask yourself the question, why is the producer of the show sharing this content with me? I don’t know if George is correct in his perspective. I really have no idea. I just know that he has a different vantage point than I do. Enjoy... | 5/27/2018 | Free | View in iTunes |
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273 |
CleanSpecial Guest, Dave Zook | Dave is the CEO of The Real Asset Investor. He's a real estate guy, but as the name implies, he also invests in multiple types of real assets. On today's show, we're talking about how he invests in ATM machines and why it made sense for him and his investors. | 5/26/2018 | Free | View in iTunes |
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274 |
CleanBuy and Sell Like a Blackstone | Warren Buffett famously said that he would go out and purchase a few hundred thousand single family homes if he had the ability to manage them. One company that took his advice was the Blackstone Group private equity firm. They aggressively went on a buying spree across the nation. The problem with buying is that you also need to sell in order to get your money out. Imagine the impact of dumping thousands of single family homes on the real estate market. But that's not what they did. Check it out. | 5/25/2018 | Free | View in iTunes |
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275 |
CleanAre You Paying Too Much in Property Taxes? | Today’s episode is focused on property taxes. This is the principal method that cities use to collect revenue to fund the operation of the city for everything from police, fire department, road repairs, and community housing. But the assessed value is key to determining the revenue to city will received. The city can hide a tax increase by arbitrarily determining that your property is now worth more. If you feel that your property taxes have been unfairly assessed, there is a process for appealing the assessment. | 5/24/2018 | Free | View in iTunes |
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276 |
CleanPuerto Rico, is it ready for investment? | Last month I visited Puerto Rico. We did a real estate investment tour as part of our visit. I’d like to share some of my observations from that visit. While the cleanup from hurricane Maria was largely complete in some areas, there was still plenty of evidence of storm damage. You didn’t need to look very far to find broken trees, broken fences, damaged roofs and smashed lamp posts. In 2012, Puerto Rico enacted several new tax incentives. The most famous are Act 20 and Act 22. I know several people who relocated to PR in search of tropical weather and the tax friendly environment. There certainly are properties that can be purchased at fire-sale prices. But that doesn't mean they're a bargain. Listen to find out the bottom line. | 5/23/2018 | Free | View in iTunes |
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277 |
CleanHow we saved $40,000 | When you get a quote from a contractor, how do you know if it's a good price? Is it too high, too low? How do you even evaluate it? Today's episode is a specific case study on how to answer that specific question. | 5/22/2018 | Free | View in iTunes |
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278 |
CleanWe Buy Houses (For Real) | You've all seen them, the free evening seminar with a TV celebrity. They invite you to attend a 3 day bootcamp for a modest price. After that, they invite you to an advanced course or a coaching program that is priced in the thousands of dollars. These professional educators are in the education business, not the real estate investing business. If you really want to learn, who will you learn from? | 5/21/2018 | Free | View in iTunes |
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279 |
CleanSpecial Guest, Mark Podolski | Today's guest has automatic his business to a very high level. He has completed over 5,300 transactions. His strategy is brilliant. Check it out. | 5/20/2018 | Free | View in iTunes |
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280 |
CleanSpecial Guest, David Sewell | David Sewell is the owner of International Coffee Farms, a specialty grower of coffee. He has 9 coffee farms in Panama, and a Cocoa operation in Belize. Agricultural real estate investing is one of many potential strategies you can employ. Both these products are easy to transport and have a long shelf life, reducing the risk of spoilage on the way to market. Listen for a fascinating way to invest. | 5/19/2018 | Free | View in iTunes |
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281 |
CleanWells Fargo In The News Again | Today, the Wall Street Journal reported on the front page that Wells Fargo was cited for altering client information on business client accounts. They just can't do things right. A month ago, they were fined $1B dollars for improper practices in the car insurance and mortgage businesses. Then there is the famous account opening scandal where Wells Fargo opened millions of accounts without client's knowledge. So how do you choose your bank? Is it for the free calculator, or the free toaster? | 5/18/2018 | Free | View in iTunes |
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282 |
CleanI'll See You in Person | I'm hosting a mixer for listeners of the podcast and for other podcast hosts at the Philadelphia office of my development partner on July 22. Those attending the Podcast Movement Conference will be in town that week for what aims to be a landmark event. You can register at https://mailchi.mp/victorjm/real-estate-podcast-mixer | 5/17/2018 | Free | View in iTunes |
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283 |
CleanMonarch City is in the Path of Development | Allen Texas is one of the fastest growing communities in the North Dallas market. The Monarch City development consists of 240 acres and will span nearly 8 million square feet of new construction when completed. Nearly 4 million square feet of office space will form part of the project. What does this mean for you as a real estate investor and developer? | 5/16/2018 | Free | View in iTunes |
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284 |
CleanBig Win at The Zoning Board | Today's episode is a story about two of our new projects that were approved last night at the zoning board. These types of wins aren't accidental. They're the result of months of hard work by many members of the team. In particular, designing a project that is embraced by the local community requires a design sensibility that is in keeping with the local architecture, and feels inviting to local residents. Finally, making sure that local community input is heard is another key element. | 5/15/2018 | Free | View in iTunes |
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285 |
CleanCredit Cycles, Not Economic Cycles | I'd like you to think of the credit cycle as a leading indicator of the economic cycle. In fact, some would say that we actually have a credit cycle and not and economic cycle at all. What is the cause of the credit cycle, and what does it mean for the overall economy, and for real estate in particular? | 5/14/2018 | Free | View in iTunes |
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286 |
CleanSpecial Guest, Kathy Fettke | I caught up with Kathy Fettke and her husband Rick on the Investor Summit at Sea. Our conversation over breakfast was wide ranging and focused on financial education, the stock market, running a startup company, and how the Fed is giving us a signal that more are choosing to ignore. Check it out. | 5/13/2018 | Free | View in iTunes |
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287 |
CleanSpecial Guest, Inaky Strick | Inaky is a very impressive young man. I really wanted you to meet him to get a sense for what can be accomplished with no resources, and only a bit of ambition and a positive attitude. Check it out. | 5/12/2018 | Free | View in iTunes |
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288 |
CleanExcuse me, may I have a room please? | Today we're tackling rooming houses. Philadelphia's Licenses and Inspections Commissioner is proposing an overhaul to the zoning code that would bring legal rooming houses into residential neighborhoods. This controversial idea has both pros and cons. Listen to today's episode to find out about why rooming houses might be desirable in your city. | 5/11/2018 | Free | View in iTunes |
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289 |
CleanDo You Have Bad Neighbors? | On today's episode, we're talking about a real world scenario where two separate neighbors tried to block us from building a fully permitted project. How did they do it? Have a listen. | 5/10/2018 | Free | View in iTunes |
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290 |
CleanThe One That Got Away | I missed an opportunity to complete a land assembly located less than 4 blocks from my house. It's hard to fathom that I wan't paying attention. In today's episode we discuss why that project would have made so much sense. | 5/9/2018 | Free | View in iTunes |
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291 |
CleanWould You Build Next to An Active Volcano? | You don't need molten lava to experience natural disasters. Many municipal governments are becoming much more savvy when it comes to handling zoning rules to protect properties from disasters in higher risk areas. In some cases, areas that were previously built are no longer permitted for habitation. Having insurance isn't enough to protect you in those cases. | 5/8/2018 | Free | View in iTunes |
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292 |
CleanWhere to Advertise Your Rental Property | In today's episode we cover all the different ways you can put your rental property in front of potential tenants. Lots of creative off the wall ideas that most people don't think of. | 5/7/2018 | Free | View in iTunes |
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293 |
CleanSpecial Guest, Brad Sumrok | Brad has been investing in multi-family apartments and educating others on how to invest for several years. He's active in 14 markets and his students are active in over 30 markets. This wide ranging conversation on apartment investing is packed with value bombs. Check it out. | 5/6/2018 | Free | View in iTunes |
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294 |
CleanSpecial Guest, Shanna Badry | Short term rentals are the rage now, and platforms like AirBnB and VRBO have made it easier than ever to maximize your income through a higher nightly rate compared with long term rentals. But it's not that easy. Shanna is the President of the Momentum Property Group and Founder of the Edmonton Short Term Rentals Association. In today's episode she shares some of the secrets to running a successful short term rental business. | 5/5/2018 | Free | View in iTunes |
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295 |
CleanGetting a New Apartment Building Fully Leased | The biggest concern with a new building is how long it will take to get it fully leased. What strategies should you employ to get it leased quickly and only attract quality tenants? Today's episode give several strategies that we've used effectively in our business. | 5/4/2018 | Free | View in iTunes |
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296 |
CleanHow to Budget Repairs and Maintenance | I've recently seen an operating budget that used averages per apartment. The problem is that there is no average apartment. It's a dangerous way to create a budget. In today's episode, I recommend a method for creating a repair and maintenance budget that is much more accurate. Check it out. | 5/3/2018 | Free | View in iTunes |
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297 |
CleanHow Much to Pay for Development Land? | In today's episode we compare three land sales that vary in price by a factor of 17. How much is too much to pay? How do you even determine how much you can afford to pay for land? All is revealed in today's episode. | 5/2/2018 | Free | View in iTunes |
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298 |
CleanYikes, 4300 Stores Closing | This week, Subway announced it was closing 500 locations after closing 800 locations in 2017. We have numerous stores closing including locations at Sams Club, Toys R Us, Walgreens, Kmart, Best Buy, Sears, just to name a few. What does this mean as a real estate investor? Listen to find out. | 5/1/2018 | Free | View in iTunes |
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299 |
CleanWeWork Adds 1,300 Desks to San Franciso Market | The shared collaboration office model is a growing trend that complements the home office environment. This translates into higher rents for shared space, but falling demand for office space overall. What does this mean for you if you own office space? | 4/30/2018 | Free | View in iTunes |
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300 |
CleanSpecial Guest, George Ross on How to Say "No" | George is a mentor and I cherish the relationship that's been formed over the past several years. We have a regular phone call where we talk about a wide range of subjects from leadership, to real estate, to negotiation, and philanthropy. George is a frequent guest on the show, because frankly there is nobody else quite like him. Enjoy... | 4/29/2018 | Free | View in iTunes |
| 300 Items |