The Real Estate Espresso Podcast

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

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

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

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

US Federal politics might be appropriately described as legislative gridlock.  You can’t seem to get a single piece of legislation through the house and the senate on its own merits. These omnibus bills seem to get loaded up with dozens and sometimes hundreds of provisions, each one designed to amass the number of votes needed to get a majority vote in the House and the Senate. The move to restore 100 percent depreciation took a step forward with the U.S. House's approval of the Tax Relief for American Families and Workers Act of 2024 last Friday.  For real estate investors, what the bill essentially says is that the 100% bonus depreciation is extended. Under the 2017 tax code, the bonus depreciation would have been calculated as 100% bonus depreciation in 2022, 80% in 2023, 60% in 2024 and so on down to zero.  Under the amendment, the 100% depreciation is extended until 2027. Not only that, the bonus depreciation is retroactively calculated at 100% for the year 2023 which just ended. I recently did an interview with CPA Mike Pine from Pine & Co in Dallas. It’s an incredibly useful session on how to effectively use depreciation as part of your investment strategy. I’ve included a link to the video replay of that session with CPA Mike Pine HERE. So if you want to save a bucket load on your taxes, using the benefits of depreciation this particular session should help make the power of this tool pretty clear.  This piece of legislation is something that almost all real estate investors are going to want to follow closely over the next 30 days or so.  ------------ Host: Victor Menasce email: podcast@victorjm.com

A Shun of the bank is not the same as a run on the bank. But the effect can sometimes be the same.  The latest bank to suffer from the banking crisis that erupted last year is a name that most people might not remember. NY Community Bancorp announced their year end financial results and their 4th quarter results.  The bank was the winning bidder in the auction to take over the assets of Signature Bank when it failed in the Spring of 2023. Signature was the second bank to fail after Silicon Valley Bank.  NY Community Bancorp completed two acquisitions in less than a year. They bought Flagstar Bank in December of 2022 and Signature in the Spring of 23. They took on nearly 40 branches that belonged to Signature Bank and  $38B in Assets from the FDIC. At the time they trumpeted how good a deal they got on the assets. Well, they made a surprise announcement last week as part of their Q4 financials.  ------------ Host: Victor Menasce email: podcast@victorjm.com

Paul Moore is the principal at Wellings Capital who are now on their sixth fund. Their latest fund is focused on preferred equity and on today's show we're talking about one company's take on how to use preferred equity effectively in deals. To connect with Paul, visit wellingscapital.com where they have some useful resources on their resource page. -------------- Host: Victor Menasce email: podcast@victorjm.com

Dave Foster is a specialist in tax deferred exchanges. You can connect with him at https://the1031investor.com. On today's show we are taking about where is the fuzzy line between capital gains treatment and ordinary business income treatment when in comes to land investing. ------------- Host: Victor Menasce email: podcast@victorjm.com

We often get questions from clients and even listeners to the podcast about the merits of a legal case. To be clear, we are not lawyers and the purpose of today’s show is not to provide legal advice in any way.  The purpose of today’s show is to illustrate the uncertainty of the legal process. I’m going to report on a case of a commercial lease in the province of Ontario. Commercial leases really are fully described by the contract and are usually not subject to being torn apart by a tenant board in the way that a residential lease might be. The interpretation is going to rely largely on the wording of the lease and much less on outside legislation that might trump the lease.  ------------- Host: Victor Menasce email: podcast@victorjm.com

Our book this month is a brand new book that was just released two weeks ago called “How to Make a few Billion Dollars “ by Brad Jacobs. Brad is a serial entrepreneur at the highest level having built multiple multi-billion dollar companies in succession. When I heard his story it became obvious that he had something to teach me. Throughout the book he takes the reader through his thought process. He talks about how he had to rewire his brain to reject the social conditioning. ------------ Host: Victor Menasce email: podcast@victorjm.com