The Real Estate Espresso Podcast

On today's show, we're talking about a sneaky regulatory change that could cost your next development project tens of thousands of dollars. If you've built, flipped, or remodeled a property in the last thirty years, you know the drill. When you design a kitchen island or a peninsula, the electrical code required you to install at least one electrical outlet on the island or the peninsula. For decades, the standard practice was simple and cheap: you had your electrician cut a standard wall outlet into the side of the cabinetry, just beneath the countertop overhang. It cost maybe ten bucks in parts and a few minutes of labor. But if you're pulling permits under the new 2023 National Electrical Code, you're in for a rude awakening. Those cheap, side-mounted outlets are now strictly prohibited. They have been entirely banned. Why the sudden change? It all comes down to safety data. The Consumer Product Safety Commission analyzed emergency room reports from 1991 to 2020. They found a disturbing trend of severe injuries and burns—particularly involving young children. What was happening is that people were plugging heavy appliances—like slow cookers, hot plates, and blenders—into these side-mounted island outlets. The power cords would drape over the edge of the counter. A toddler walking by would grab the cord, give it a tug, and pull a crockpot full of boiling hot soup onto themselves. The new code does allow for top-mounted, pop-up outlets installed directly into the surface of the island. However, these aren't your standard five-dollar hardware store outlets. Because they are mounted horizontally on a kitchen counter, they must be highly specialized, UL-listed, spill-proof, and water-resistant assemblies tested to withstand spills. A single unit can cost anywhere from a hundred and fifty to three hundred dollars. Add in the cost of having your stone fabricator precision-cut a hole in your granite or quartz slab, plus the specialized electrician labor to wire it, and you're easily looking at four to five hundred dollars per island. ------------- **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: [[email protected]](mailto:[email protected]) **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)

There's a battle brewing in the property management software industry that could have far-reaching implications for real estate investors. The battle is between RealPage, one of the largest property management software companies in the industry, and EliseAI, one of the fastest-growing artificial intelligence companies serving multifamily housing. On October 7, RealPage notified customers that it was suspending all new property-level integrations with EliseAI indefinitely. Existing integrations would continue operating, at least for now. At the center of the controversy is a fundamental question. Who actually controls the data generated by operating an apartment building? To understand what's happening, we need to examine the relationship between these companies. RealPage provides the underlying property management system. It maintains information about tenants, leases, rental payments, vacancies, maintenance requests, and financial transactions. For many property operators, RealPage is the system of record. It's the database that sits at the center of their operations. EliseAI started by automating leasing inquiries and resident communications. Its technology could respond to prospective tenants, answer questions, schedule tours, and handle routine conversations without requiring constant human intervention. Over time, EliseAI expanded into maintenance, collections, renewals, and other operational functions. The company recently raised $350 million at a reported valuation of $4 billion. It says its technology serves more than 6.5 million multifamily units. To put this in perspective, that's nearly 1/4 of the commerical apartments in the US. -------------- **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: [[email protected]](mailto:[email protected]) **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)

When we talk about affordable housing, the conversation usually centers on two groups of people. We talk about low-income families struggling to pay the rent, and young adults who cannot afford to purchase their first home. But there's another demographic that rarely receives the same attention. It's a demographic that's growing rapidly, and one where the affordability challenge becomes more complicated with each passing year. I'm talking about seniors. We are owners and developers of senior housing, including assisted living and memory care facilities. One of our facilities charges approximately $8,000 per resident per month. Clearly, at that price point, we're not talking about affordable housing in the conventional sense. But here's something important that often gets lost in the discussion about senior housing affordability. The building itself is not the primary reason the monthly fee is $8,000. The lion's share of that expense is the cost of providing services. We're talking about around-the-clock staffing, personal assistance, meals, housekeeping, supervision, medication management, and specialized memory care. These are not optional luxury amenities. They're essential components of the product being delivered. When someone says senior housing is unaffordable, they're often combining multiple fundamentally different things: the cost of housing, the cost of food and the cost of care. Because affordable senior housing is only part of the equation. What we're really confronting is the affordability of aging itself. ------------ **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: [[email protected]](mailto:[email protected]) **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 warranty legislation and new rules around consumer products and appliances. The Province of Quebec just implemented the most comprehensive warranty legislation in North America. But other states in the US have also implemented rules that affect how repairs and maintenance get handled for major appliances and HVAC equipment. ------------ **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: [[email protected]](mailto:[email protected]) **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)

Let me start with a simple observation. Insurance companies are in the business of selling policies, and one of the most effective ways to sell more coverage is to describe what could go wrong. Fire, flood, fraud, lawsuits. Every scenario sounds plausible when someone paints the picture for you. And once you've heard the worst-case story, saying no feels reckless. But here's the thing. A scary scenario is not the same as a scenario that is likely to hurt you. Your job as an owner is to separate the two. Let me give you a recent example from my own portfolio. My previous insurer had included loss of income coverage as part of our commercial property policy. On paper, it sounded sensible. If the building is damaged so badly that you can't occupy it, the policy pays you for the income you lose while the space is being repaired. The problem is that this isn't how our business would actually respond to that situation. If the building were damaged to the point of being uninhabitable, we would not shut down. We'd find a temporary sublease, move the team and the operations into that space, and keep running while the original building was repaired. The business would continue. The income would continue. We would never collect on that policy. When we removed the loss of income coverage from the policy, our premium dropped by more than 50 percent. Think about that. More than half of the premium was tied to a coverage we would never realistically use in the way it was written. Now, I want to be careful here. I'm not telling you to strip coverage from your policy. Loss of income coverage can be essential for some businesses. If you operate a restaurant, a medical office, or a manufacturing facility that can't easily relocate, a shutdown really could be catastrophic, and that coverage may be worth every dollar. The point is that the right answer depends on how your business actually operates, not on how the salesperson frames the risk. ---------- **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: [[email protected]](mailto:[email protected]) **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)