The Real Estate Espresso Podcast Victor Menasce

Virtually every apartment project is going to be constrained by parking. That one factor will determine the density that is going to be possible. 

In rental apartments, charging for parking is going to very from one area to another. 

For example in a dense urban area like NYC or Boston, it’s fairly routine to charge for parking. In fact, in cities like NY, I consider a car to be more of a liability than an asset. Those areas have very effective public transit and finding parking at your destination is going to take so much time that you would spend less time and less money if you simply took an Uber or a Taxi to your destination. 

In less dense areas and in places where public transit is not deeply ingrained into the culture like in Texas or Arizona, a car is a must. The distances are too large and public transit simply is not an option. Except in the rarest of instances, parking is free. So when you are designing your apartment project, how much land should you allocate to parking? Well, you’ll be surprised to hear that it’s about the same as your floor area ratio. 

By the time you factor in visitor parking and accessible parking, the parking ratio is going to be pretty close to 2 parking spaces for every apartment. Some projects are not going to be viable with less than a parking ratio of less than 1.75. I’m seeing cities create incentives to reduce the parking ratio below 1.0. In some cases I’m seeing ratios of 0.7 and 0.5. In places where there is public transit within walking distance, I’m seeing buildings approved with zero parking. I personally don’t think that the market will support those buildings in the long term. If someone wants to own a car at some point, they need to move. If they get into a relationship with someone who owns a car, that person faces the choice of parking or their new found relationship. Chances are they will have to move. This translates into higher tenant turnover. 

Parking is a loss leader from the perspective of a developer. It is not a source of revenue, and is simply a necessary cost. 

On today show we are looking at whether increasing interest rates is effective at combatting inflation. 

The theory is that when interest rates rise, people are encouraged to save money and benefit from the income that is available from those higher interest rates. This is particularly true if interest rates are higher than the rate of inflation, so that you get a real positive rate of return on interest-bearing instruments.

When I think back to the early 1980s, I can remember conversations with my mother about putting my savings into high-yield bonds that were government-backed. I did not truly understand the math behind nominal interest rates versus real interest rates at the time I was particularly impressed when in that one year, I earned 18% interest on a $10,000 bond. For a teenager that $1800 in interest was a lot of money.

In the late 1970’s the personal savings rate was around 9% and then in jumped in the early 1980’s to around 13%. These were the days when Pauli Volcker pushed Fed interest rates all the way up to 19%. 

That steadily declined until it hit a low in 2005 of 1.4% and then another low again in 2007 of 1.9%. 

We witnessed a bit of a recovery in personal savings through the 2010’s to about 8.5% in 2019. Then with all of the stimulus money during the pandemic, personal savings jumped to 32% in 2020, before falling down to 12%, and then spiked again to 26% in the second wave of the pandemic. 

Personal savings rates are now down to 3.2% after nearly two years of rising interest rates. The increase in interest rates is not having the desired effect. People are not saving more. Not only that, credit card balances are through the roof. Revolving consumer credit increased to nearly $1.1T in the first quarter, up from $727B in April of 2021. This supposedly strong economy is being funded by credit card debt. People are running out of credit. 

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Host: Victor Menasce

email: podcast@victorjm.com

Dr. Noah has written 25 books on the topic of helping entrepreneurs achieve breakthroughs. On today's show we're talking about what holds people back from achieving those breakthroughs.

To connect with Noah, visit http://breakthroughwithnoah.com. He also has a new book out at http://sevenfigureexpertbook.com. The book is free if you cover the cost of shipping.

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Host: Victor Menasce

email: podcast@victorjm.com

Today's show is an extract of yesterday's livestream where I'm making some predictions for the upcoming period and answering listener questions live.

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Host: Victor Menasce

email: podcast@victorjm.com

Coming up later today at 5PM EDT, 4PM CDT, 3PM MDT, I'm going to be live on LinkedIn and Facebook giving my predictions for the upcoming period and opening up to live questions from the audience. To register and attend, visit

https://www.linkedin.com/events/predictions-askmeanything7191469079046639616/about/

On todays show we are doing a dive into why sheltering from capital gains tax is not as simple as it sounds. There is nuance to the process and it can be more difficult unless you plan carefully.

Let's be clear, I'm not offering tax advice. Talk to your CPA. I'm merely sharing my observations based on what I'm seeing in the market.

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Host: Victor Menasce

email: podcast@victorjm.com

Coming up on Friday May 3 at 5PM EDT, 4PM CDT, 3PM MDT, I'm hosting a live stream on LinkedIn Live. I'm going to be sharing my predictions for the upcoming period and then opening up to questions from the audience on any topic. To connect to the live stream, join me at 5PM EDT here:

https://www.linkedin.com/events/predictions-askmeanything7191469079046639616/

On today's show we're talking about the FTC's recent ban on non-compete clauses in employment contracts. What does it mean for employers and for employees?

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Host: Victor Menasce

email: podcast@victorjm.com