The Real Estate Espresso Podcast

Jim Ross is based in Phoenix Arizona where he is a partner at the accounting firm Pro Vision. On today's show we are talking about the provisions of the latest US tax legislation that was signed into law on July 4. The focus of our conversation is the aspects that specifically affect real estate investors. To connect with Jim, visit https://www.provisionwealth.com/------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Robby Butler is Managing Director and head of capital markets at Y Street Capital, our development company. On today's show we are talking about attacking complexity and simplifying business processes. To connect with Robby, he can be found on LinkedIn at https://www.linkedin.com/in/robby-butler/ or at Y Street Capital.-------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

On today’s show we are talking about the changing face of business. This is the first in a two part series that explores the connection between the online world and the offline world. We live in the offline world, even though it seems at time that we spend much of our time with a device in our hand. I need to first start with a distinction between marketing and sales. On today’s show we are talking about marketing. On Monday’s show we are going to be talking about sales which is a different process. 10 years ago they would scrape 2 pages for every visitor they would send to your website. That’s a pretty good trade. You would share your content with Google and Bing and they would send you traffic in exchange. They would also advertise along side your organic links and would provide themselves with ad revenue as part of the implicit arrangement. That remained relatively constant over much of the past decade. The Google crawl rate has remained relatively consistent over that entire time period, up until 6 months ago.We have seen it get harder to attract traffic over the past decade. It feels like it is about 3x harder and that in fact lines up with the data. Up until the end of 2024 Google was scraping 6 pages for every visitor it sent you. But in the past six months, Google which still represents about 58-60% of all search traffic is now scraping 18 pages for every visitor it sends you. When you perform a search using AI, the AI tool gives you the link to its references at the end of each AI result. But how many people actually click on the little link icon. They don’t share an entire web address with a blue link, it’s an anonymous icon of two chain links. You don’t know where the link is going to take you unless you click on the link and almost nobody does. The ratio of content scraping to website visits has now risen to 1500 to 1. A decade ago we were at 2:1 then 6:1, then 18:1. Now we are at 1500 to 1. Who is going to invest all of that time and effort to create content with a 1500 to 1 ratio?-----------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

On today’s show we are looking at a divergence between lumber futures prices and current lumber composite prices. These two graphs always tend to track each other, sometimes with a small delay. But the prices always follow the futures. However, this is a moment in time when the lumber futures are diverging. The week-to-week framing lumber composite price fell by 0.5% on June 27, 2025, declining to $422 per 1,000 board feet. This was the 12th consecutive week of declines, and the lowest price since October 2024. The falling prices reflect falling demand for lumber as construction starts continue their steady decline. Production also fell in response to the fall in demand. But the July Futures price is $615, September is $664 and November is $675. That's a 60% premium over the current spot price. Holding physical lumber (spot price) incurs costs. This includes warehousing, insurance, and the cost of capital tied up in inventory. Futures prices reflect these "carrying costs" that would be avoided by buying a contract for future delivery rather than purchasing the physical commodity today and storing it. Storing that lumber incurs interest costs if the inventory is financed. So part of the difference in price is explained by the cost of carrying physical inventory. There is anticipation of future increase in demand for new construction later this year and into next year. So the market is forecasting growth, even though the market is clearly experiencing a decline over the past 6 months. Finally, the trade war is anticipating supply side constraints as we have already seen a 6% decline in lumber from Canada entering the US. This is further anticipated to amplify as the trade dispute continues. This will make forecasting of construction costs more difficult for the foreseeable future in the US which will put downward pressure on new construction until the uncertainty is removed. ------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

On today’s show we are looking at what the Fed could do that would cause a major increase in demand for US Treasuries. If the demand for Treasuries were to increase, the prices would rise and the market rate for those bonds would fall. The US Treasury would no longer be dependent on the interest rate guidance coming from the Federal Reserve. That could save hundreds of billions per year in interest costs for the US government.--------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Genesis is a profound exploration of how artificial intelligence is reshaping the human experience—our cognition, ethics, politics, and even our sense of self. Our book this month was co-authored by three people. Eric Schmidt who was the CEO of Google for nearly 20 years. In the last 15 years Eric Schmidt and Henry Kissinger developed a deep friendship which turned into several collaborations. Henry Kissinger was Secretary of State in the Nixon administration and he has continued to be influential and controversial on the world stage for most of his life. The third author is a computer scientist (Craig Mundie), the book blends historical insight, technological expertise, and philosophical inquiry.  It offers a potential roadmap for navigating the AI era. It argues that AI is not merely a tool but also challenges the foundations of human knowledge and dignity.This book was extremely important to Henry Kissinger who continued to make edits to the book during the last week of his life with Henry’s wife and Eric Schmidt by his bedside.The book is divided into five main sections. Part I: The Cognitive RevolutionPart II: Human Dignity and the SpiritPart III: Politics, Security, and Global OrderPart IV: Economics and SocietyPart V: A Roadmap for the FutureGenesis is not a technical manual or a utopian or even dystopian manifesto. It’s a deeply reflective, interdisciplinary meditation on what it means to be human in an age of intelligent machines. ------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

On today’s show we are taking a look at two different measurements of the exact same thing. Imagine for a moment that you wanted to cut a piece of wood. You take out your trusty tape measure and measure the distance you think you need. But then along comes an economist who says, “Oh no. You’re not going to use that simple tape measure are you? That will only give you a nominal measurement. There are a bunch of adjustments to be made in order to get the real measurement.”This is a joke of course, but often jokes mirror reality. The Case-Shiller real estate market index reports both nominal (non-seasonally adjusted) and seasonally adjusted data. So when is it appropriate to use the seasonally adjusted number? Seasonally Adjusted data is best for analyzing short-term trends, like month-over-month changes, because it removes the noise of seasonality.Non Seasonally Adjusted data is better for year-over-year comparisons, since seasonal patterns occur in the same month each year.For example, I would personally compare June of 2025 against June of 2024. That’s a valid comparison for the same point in the seasonal cycle on a year over year basis. For that measurement I would not use seasonally adjusted data. If I wanted to compare June to January which are at different points in the annual cycle, I might use the seasonally adjusted data. But because the seasonal variations are so large I personally would not even perform that comparison even with the seasonal adjustments. I don’t know what conclusions I would draw from the data. I personally don’t like to mess around with adjustments at all. I would prefer to compare this January against January the year before, and then February against the same month the year before and so on. That way there is no seasonal adjustment required for the exact same period one year earlier. It’s a like for like comparison. ---------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Today's show is a talk that I gave last month at the Ottawa Real Estate Investors Organization on Small Bay Industrial. This is a segment that our firm is active in and one that we see as having structural shortages in many major markets across North America.------------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

Ashley Garner is based in Wilmington North Carolina where he runs a growing investment portfolio. He's recently made the jump from 30 unit properties to 200 unit properties and is scaling the business systems to match the new portfolio. Our discussion centers around investment mandate and scaling up. To connect with Ashley, visit https://www.abgmultifamily.com/----------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)   Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)  

On today’s show we are talking about distorted valuations. When you consider risk, I’m seeing what I can only describe as an atmospheric inversion in today’s markets. Wall Street surged toward new record highs on Thursday, as the S&P 500 briefly topped its February 19 closing high of 6,144.15, extending a nearly $10 trillion rally from the brink of a bear market.On today’s show I’m going to compare the risk free yield on US Treasuries as a baseline benchmark. In some ways, every other investment could be compared to that benchmark. I’m not going to get into the debate whether the US is going to default on its debt in the next decade or not. For the purpose of today’s discussion let’s take it as a given that the US will meet its debt obligations even if that means expanding the annual deficit and the global debt. We know that will eventually break down, but let’s accept the US Treasury as a foundation for now. The reason I’m proposing that is that the reference for all of these investment returns is the US dollar. If the dollar is in question, then the value of all the other investments that a dollar denominated could be called into question as well. That includes Nvidia, Amazon, Walmart, United Airlines and so on. So let’s call the risk free rate of return the yield on the US 10 year treasury. Today the market opened at 4.25%, pretty much in lock step with the Fed Funds rate. So whether you buy a 30 T-bill or a 10 year bond, your risk free rate of return today is at 4.25%.The argument is that if another investment is offering a lower yield, then it is somehow a better investment than the risk free rate of return. Does that make sense that the S&P 500 index would be more expensive than the risk free rate of return? --------------**Real Estate Espresso Podcast:** Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)   iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)   Website: [www.victorjm.com](http://www.victorjm.com)   LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)   YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)   Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)   Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)  **Y Street Capital:** Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)   Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)