The Real Estate Espresso Podcast

On today’s show we are taking a closer look at the various components of the consumer price index and how it is calculated. Today's show will probably shock you. ------------ Host: Victor Menasce email: podcast@victorjm.com

Today’s question comes from Marc in Montreal. I recently got an as-built appraisal report that I wish to use for financing for a new apartment complex in a semi-rural location with lots of industry and extremely low vacancy.  The appraiser is quoting a higher CAP Rate than I was expecting, citing the following.  First, he is using comparables a couple of hundred miles away, in the same province.  Second, he is stating that the Bank of Canada has not lowered interest rates, when multifamily lends on a more floating bond rate.  Third, his only comparable in the same market appears to be an inferior product with less amenities.  Fourth, he is saying that the site is not serviced, but I can tell you that the municipal government has stated that servicing will come in time for the construction.  What kind of arguments can I make to gently push the appraiser to a more favourable CAP Rate?" ------------- Host: Victor Menasce email: podcast@victorjm.com

Brock Holliman is based in Sarasota Florida where he develops build to rent communities in an infill context. Today's conversation is filled with powerful market insights. To connect with Brock, visit hollimancapital.com or connect with Brock at @follow.brock on various social media such as Instagram, Facebook, Youtube, etc. ----------- Host: Victor Menasce email: podcast@victorjm.com

Michael Flight specializes in shopping centers. He was our guest last weekend where we talked about the state of retail. Michael is also a pioneer in the world of applying crypto technology to real estate and how real estate can become tradable using blockchain technology. I've had numerous conversations with proponents of this technology and today's talk was the first one that actually made sense to me. This is one you definitely want to pay attention to. To connect with Michael and to download his white paper on tokenization, visit http://investonmain.com -------------- Host: Victor Menasce email: podcast@victorjm.com

The allure of hunting for that perfect deal can be intoxicating. I hear of many investors often spend countless hours scouring listings, attending networking events, and analyzing market trends. But what if I told you that there’s an alternative approach—one that doesn’t involve the relentless pursuit of deals? Welcome to the all-you-can-eat buffet of CRE investing. ---------- Host: Victor Menasce email: podcast@victorjm.com

Commercial brokerage JLL just published their retail real estate report for 4Q2023. The report contains a number of interesting insights.  Today’s show complements the interview we had with Michael Flight last weekend on shopping centres. Michael has been investing in shopping centres for decades and he is a real expert in the space.  The JLL report highlights that the majority of the growth is in the southern states.  ------- Host: Victor Menasce email: podcast@victorjm.com

On today’s show we are focusing on a change that is looming in the world of real estate marketing.  It’s well established that the average person has a hard time visualizing what their new home or perhaps their rental apartment will look like when fully furnished. Some furniture businesses have been investing heavily in the technology to help you visualize what their furniture would look like if placed in your home. That is very useful and can really help potential customers in making a buying decision on that new sofa or coffee table.  When a developer shows renderings of a future project these images or animations are helpful in visualizing the future project.  But there is little doubt that what we are seeing is an artists rendition. Nobody is fooled into thinking that they are seeing a real image. The images and videos are helpful, but not misleading.  Enter the world of generative artificial intelligence. The next version of Chat GPT is version 5 which has not been released. Some of the industry analysts that I follow are saying that version 5 has not been released because it is actually too realistic.  From a text description, it is possible to generate a photorealistic video that matches the text directive. The problem is not that an animation can be created from a text description. That’s cool and frankly even desirable for a number of applications.  The problem is that if an AI generated video is indistinguishable from a real video, the brain has a problem consuming any content in the future. We have no moral, ethical or psychological dilemma when viewing an animation. ----------- Host: Victor Menasce email: podcast@victorjm.com

What type of organization do you want to work with? Are bigger organizations necessarily better? We’ve all heard of the Pareto Principle, this is sometimes called the 80/20 rule.  80% of the revenue comes from 20% of the customers. 80% of the complaints come from 20% of the customers. 80% of the wear on a carpet happens on 20% of the surface area. There are countless examples.  It’s not a rule, or even a law, but something that occurs with enough frequency that it’s got to be more than coincidence.  A less known rule is called Price’s Law. This speaks to the productivity in an organization. It says that 50% of the work is done by the square root of the total number of people in the group.  So if you have four people in the group, then 50% of the work will be done by two people. Seems pretty efficient so far.  If you have 100 people in the group, then only 10 people in the group will be responsible for 50% of the output, and the remaining 90% will contribute to the remaining 50% of the output. Now either the 90% are really awful, or the other 10% are extraordinary.  ------------ Host: Victor Menasce email: podcast@victorjm.com

On today’s show we’re talking about what’s wrong with today’s internet. You might be wondering why we are talking about technology on a real estate podcast. It’s because the internet is the primary source of information for real estate investors and developers. We’ve come to rely on it. If the document you seek is not accessible online, then it’s as if it doesn’t exist. If it is online, but you can’t find it, then the effect is the same.  Today’s internet has not adapted to the introduction of AI.  Search algorithms rank the search results based on popularity. That’s why Amazon ranks higher than the independent corner bookstore that’s across the street from the University in your home town selling used books. Intuitively that makes sense. In an orderly world where natural organic traffic forms the majority of traffic, this approach makes sense.  Of course there are numerous other criteria that Google and other search engines like Bing use to determine when to present a result. Google has become pretty good at distinguishing between legitimate and spam content. The search algorithms have become progressively smarter at staying ahead of attempts to fool the algorithm. But in recent months, there has been a degradation.  ------------- Host: Victor Menasce email: podcast@victorjm.com

Chris Miles comes from the world of life insurance sales. On today's show we're piercing the veil on some of the practices that are rampant in that industry that everyone needs to know about. To connect with Chris, visit moneyripples.com or check out his Money Ripples youtube channel. -------------- Host: Victor Menasce email: podcast@victorjm.com