Latest / Financial Survival Network / Florida’s Real Estate Rebound: Risks & Rewards - Moshe Popack #6177

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Florida’s Real Estate Rebound: Risks & Rewards - Moshe Popack #6177 · Financial Survival Network

• 0:00
  Speaker 1: What's actually happened in general Florida A thousand people moving
• 0:03
  Speaker 1: to Florida every day, net migration and very business friendly,
• 0:09
  Speaker 1: but also number one back to office. So just math wise,
• 0:16
  Speaker 1: if you're buying fifty sixty seventy cents in the dollar
• 0:19
  Speaker 1: compared her to what the peak was.
• 0:21
  Speaker 4: Right.
• 0:22
  Speaker 1: Eventually, as people more and more people go back to
• 0:24
  Speaker 1: the office and the business trends are trending positive.
• 0:27
  Speaker 2: And I'm seeing that in the leasing Velocity.
• 0:30
  Speaker 4: You are listening to Carrie.
• 0:31
  Speaker 3: Let'sa's financial survival Network where you get valuable information you
• 0:36
  Speaker 3: just can't find anywhere else to thrive in today's trying times.
• 0:40
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• 0:45
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• 0:48
  Speaker 3: newsletter and gift. Financial Survival Network now more than ever.
• 0:58
  Speaker 4: And welcome you are listening to watching the Financial Survival Network.
• 1:02
  Speaker 4: I'm your host, Carrie Lutz got a really interesting guest
• 1:06
  Speaker 4: for you right now. Like me, he's a recovering attorney,
• 1:10
  Speaker 4: former New Yorker now a Floridian and a real interesting,
• 1:15
  Speaker 4: all around interesting person. His name is Mosha Poppik and
• 1:20
  Speaker 4: Company hy Am he real estate management and well welcha,
• 1:27
  Speaker 4: let's talk about you. You came to Florida at the
• 1:33
  Speaker 4: height of the foreclosure epidemic and you saw value when
• 1:40
  Speaker 4: everyone else was fleeing the space. And fast forward now
• 1:45
  Speaker 4: what is it fifteen years? Tell us what's happened.
• 1:49
  Speaker 1: So, just in general to that point, I think anyone
• 1:52
  Speaker 1: who wants to have outsize returns or make a difference,
• 1:57
  Speaker 1: they're going to have to take decisions, leader decisions if
• 2:00
  Speaker 1: they want to be an entrepreneur that are beyond the
• 2:05
  Speaker 1: regular bell curve right there, the logic or what everyone's
• 2:08
  Speaker 1: telling you. So right, So if I were to apply
• 2:13
  Speaker 1: the first real estate deal that I did, everyone thought
• 2:15
  Speaker 1: I was nuts during the time. So we fast forward
• 2:18
  Speaker 1: out the We have three divisions in seven states.
• 2:24
  Speaker 2: We have multifamily apartments that we own and manage. We
• 2:27
  Speaker 2: have office.
• 2:28
  Speaker 1: Buildings, and we have assisted living and about over is
• 2:33
  Speaker 1: over about over a billion dollars of assets we manage
• 2:36
  Speaker 1: and own long term. So commercial real estate is in
• 2:40
  Speaker 1: the dumps right now. Do you think you're going to
• 2:43
  Speaker 1: be able to do the same thing with commercial real
• 2:45
  Speaker 1: estate that you did with the residential But way back
• 2:50
  Speaker 1: fifteen years ago, so I'm hoping we're still in the
• 2:55
  Speaker 1: I guess second inning, third inning like that.
• 2:58
  Speaker 2: We don't have it fully.
• 2:59
  Speaker 1: Played out, but I have taken financial bet this past
• 3:05
  Speaker 1: eight months. You're seeing the front page of the Roll
• 3:08
  Speaker 1: Street Journal to your point right, office buildings, everything looks terrible.
• 3:14
  Speaker 2: But what was the reason?
• 3:15
  Speaker 1: It was something abstract COVID, everyone's working remote, But what's
• 3:20
  Speaker 1: actually happening? And I've taken the bet here in South Florida.
• 3:25
  Speaker 1: What's actually happened in general Florida? A thousand people moving
• 3:28
  Speaker 1: to Florida every day, net migration and very business friendly,
• 3:34
  Speaker 1: but also number one back to office. So just math wise,
• 3:41
  Speaker 1: if you're buying fifty sixty seventy cents in the dollar
• 3:44
  Speaker 1: compared her to what the peak was, right, Eventually, as people,
• 3:48
  Speaker 1: more and more people go back to the office and
• 3:50
  Speaker 1: the business trends are trending positive. And I'm seeing that
• 3:54
  Speaker 1: in the leasing velocity on the commercial real estate. I'm
• 3:56
  Speaker 1: seeing that through reality on the ground. Uh, you know,
• 4:00
  Speaker 1: we're able to buy deals at you know of eleven
• 4:03
  Speaker 1: percent yield right cap rates twelve Uh.
• 4:07
  Speaker 2: You know, and you're and you're and you're in a
• 4:09
  Speaker 2: good market. Uh.
• 4:10
  Speaker 1: You know, our corporate offices in isn't and we have
• 4:13
  Speaker 1: over a million square feet just in that just in
• 4:15
  Speaker 1: that counting.
• 4:15
  Speaker 4: Interesting. Interesting. So you see the return back to the office. Uh,
• 4:21
  Speaker 4: but maybe hybrid, maybe not as much as many people
• 4:26
  Speaker 4: working in a spaces was before the pandemic.
• 4:31
  Speaker 1: Well, I think I think real estate in general is
• 4:33
  Speaker 1: very localized. So I think that you took San Francisco
• 4:37
  Speaker 1: and New York City, Uh, maybe less.
• 4:41
  Speaker 2: Maybe the employees are pushing.
• 4:42
  Speaker 1: Back in reality, Uh, there's a there's more leasing that
• 4:49
  Speaker 1: I've done the past twelve months of companies moving down
• 4:53
  Speaker 1: and expansions here in South Florence. You have to take
• 4:57
  Speaker 1: each market and study we're we're where are we because
• 5:01
  Speaker 1: it's moving fast, the transition from COVID and that remote work,
• 5:06
  Speaker 1: hybrid work coming back to office.
• 5:08
  Speaker 2: But what are we seeing?
• 5:09
  Speaker 1: We're seeing that you know, major Fortune five hundred companies
• 5:14
  Speaker 1: are demanding that the employees come back five days a week.
• 5:19
  Speaker 1: You know, So there is because I think the actual
• 5:22
  Speaker 1: number in South Florida think it's about ninety one percent
• 5:25
  Speaker 1: compared to twenty nineteen are back in office.
• 5:30
  Speaker 4: So what percent was that? I'm sorry, ninety one.
• 5:34
  Speaker 2: In South Florida, which is odd, which is interesting.
• 5:37
  Speaker 1: Yeah, and like I said, you have to have a
• 5:40
  Speaker 1: contrarian view if you want to reap the upsides. So right,
• 5:45
  Speaker 1: you can't expect if you don't take calculated risk, you
• 5:50
  Speaker 1: can't expect to get outside returns.
• 5:53
  Speaker 2: It just goes onalon.
• 5:54
  Speaker 4: Okay, So what about the malls. I know they're doing
• 5:58
  Speaker 4: well here in South Florida for the most part of that.
• 6:01
  Speaker 4: There's a few that are ready to close their doors.
• 6:04
  Speaker 4: But around the country it looks like the time of
• 6:08
  Speaker 4: the mall has passed. Can you repurpose them? What would
• 6:13
  Speaker 4: be your vision for them?
• 6:16
  Speaker 2: What have I seen? It's interesting.
• 6:17
  Speaker 1: State of Florida last year they passed them they called
• 6:20
  Speaker 1: the Local Act, which is basically able to take commercial
• 6:24
  Speaker 1: zoning and circumvent local city.
• 6:28
  Speaker 2: Zoning and build more residential.
• 6:31
  Speaker 1: So if I would have a big swath land in
• 6:35
  Speaker 1: kind of a city, maybe I'd cut off a big
• 6:37
  Speaker 1: chunk of it knocked out. Let's say there's a Sears
• 6:41
  Speaker 1: or something that's you know, that's out of business, maybe
• 6:45
  Speaker 1: knock it down. Maybe it's always maybe some need for supermarkets,
• 6:52
  Speaker 1: food right or food, dunkin Donuts, things like that, out parcels.
• 6:57
  Speaker 1: And then and then maybe some experience like trampline parks
• 7:01
  Speaker 1: I've seen so I'm not so much in the mall space,
• 7:05
  Speaker 1: but I've seen success in that where you're really buying
• 7:09
  Speaker 1: the mall ten cents twenty cents in the dollar really,
• 7:12
  Speaker 1: but the costs of the land.
• 7:14
  Speaker 2: And I've seen.
• 7:15
  Speaker 1: Them turn it around and then you can go to
• 7:18
  Speaker 1: regional banks, local banks to get that vision finance.
• 7:21
  Speaker 2: I've seen that done.
• 7:23
  Speaker 4: Interesting. Interesting. Yeah, well, there's just so many ghost malls
• 7:29
  Speaker 4: and you see the pictures of them deteriorating. They have
• 7:31
  Speaker 4: trees growing through the middle of them. The roofs are collapsing,
• 7:36
  Speaker 4: and something should be done. That can't all be Amazon,
• 7:43
  Speaker 4: you know, distribution centers or illegal alien processing centers.
• 7:48
  Speaker 2: Right, No, no, be sure some of them are doing that.
• 7:53
  Speaker 1: But also I saw that Amazon compared to let's say
• 7:57
  Speaker 1: twenty twenty one, they are not expanding as fast as
• 8:04
  Speaker 1: they were.
• 8:04
  Speaker 2: They're slowing down. So in general, again in business, the
• 8:09
  Speaker 2: most important.
• 8:10
  Speaker 1: Thing is you have to be level headed to be
• 8:13
  Speaker 1: able to pivot, and your strategy has to be planned
• 8:15
  Speaker 1: a B C d EFG. Right, you have to You
• 8:19
  Speaker 1: can't just have one thing and you have to di
• 8:21
  Speaker 1: asply because right, nobody expected that.
• 8:25
  Speaker 4: Yeah, yeah, well, you've got to be flexible. And I
• 8:29
  Speaker 4: just remember, you know, the Chrysler building in Manhattan during
• 8:35
  Speaker 4: the Great Depression, Massachusetts Mutual Insurance Company had the mortgage
• 8:41
  Speaker 4: on it. They took it back and then yeah, everyone
• 8:46
  Speaker 4: thought it was doomed. And you know, the next time
• 8:49
  Speaker 4: they sold it was for hundreds of millions of dollars.
• 8:52
  Speaker 4: But I don't know what you think. New York City
• 8:56
  Speaker 4: is a good play, a countercyclical play, or is it doomed.
• 9:00
  Speaker 1: Well, I'll tell you I have a lot of family.
• 9:03
  Speaker 1: Most of my family live in New York. I still
• 9:07
  Speaker 1: there's this core dynamic and I go back and forth
• 9:09
  Speaker 1: in my mind about New York. I don't like the
• 9:14
  Speaker 1: homelessness issue. A lot of friends that I have in
• 9:18
  Speaker 1: the real estate business are using their hotels for migrants.
• 9:22
  Speaker 1: That's happening in prime areas because they're getting top dollar
• 9:25
  Speaker 1: from government. That's top and they're also just locals are
• 9:29
  Speaker 1: complaining heavy, heavy stench and every block of marijuana. It's uncomfortable.
• 9:34
  Speaker 1: It's become uncomfortable. But it will always be that four.
• 9:40
  Speaker 1: It will always be New York. But we just said
• 9:42
  Speaker 1: at our major import Ken Griffin, right, a huge Hedge Fund.
• 9:49
  Speaker 1: He said that Florida or South Florida is becoming the
• 9:53
  Speaker 1: Wall Street of the South.
• 9:54
  Speaker 2: Oh yeah, more and more and more.
• 9:57
  Speaker 1: And I think that, well, you'll still have because the money,
• 10:02
  Speaker 1: the money is in Manhattan. The money's in New York, right,
• 10:06
  Speaker 1: so you got to go there and hotels and stuff, right.
• 10:10
  Speaker 4: But tax is, quality of life issues, everything you described. Really,
• 10:16
  Speaker 4: Miami has become the financial capital of the country. It
• 10:20
  Speaker 4: shifted and population numbers twenty three million here and the
• 10:25
  Speaker 4: population state static in New York around nineteen and a
• 10:30
  Speaker 4: half million. And really you could just see Goldman Sachs
• 10:37
  Speaker 4: sent their most profitable division down to Palm Beach County,
• 10:40
  Speaker 4: I think on Beach County.
• 10:42
  Speaker 1: So it's interesting because I mentioned on my podcast Common
• 10:45
  Speaker 1: Denominator the other day it was interesting that from Manhattan
• 10:51
  Speaker 1: to the Hampton it's one hundred and eighteen miles right,
• 10:55
  Speaker 1: and from Homestead Jupiter is also a hundred eighteen miles
• 11:00
  Speaker 1: with ocean on one side, yeah, and everybody than the other.
• 11:04
  Speaker 1: And six and a half million people in South Florida
• 11:08
  Speaker 1: and eight million from the Hamptons to Manhattan in New York.
• 11:14
  Speaker 1: So I'm very I'm very bullish on the economy in
• 11:20
  Speaker 1: here in South Florida for the next ten years, all.
• 11:23
  Speaker 4: Right, But we have several headwinds here. Well. Once upon
• 11:27
  Speaker 4: a time Florida was substantially cheaper than New York. Not
• 11:31
  Speaker 4: so much anymore. And we've got the condo crisis due
• 11:36
  Speaker 4: to the surf side condo collapse that happened I guess
• 11:41
  Speaker 4: three almost foty years ago, and that led to an
• 11:45
  Speaker 4: overreaction by the state government mandating all these reserve funds,
• 11:50
  Speaker 4: and all of a sudden there is a rush by
• 11:53
  Speaker 4: every single condo in the certainly in South Florida to
• 11:58
  Speaker 4: remedy decades of deferred maintenance. And then you got the
• 12:02
  Speaker 4: insurance crisis taking place, where you know, basically the state
• 12:07
  Speaker 4: has become the insurer of last resort. They've made some
• 12:10
  Speaker 4: steps to try to get the market back on its equilibrium,
• 12:16
  Speaker 4: but we'll see how successful. But you know, condo is
• 12:20
  Speaker 4: people can't sell them now.
• 12:23
  Speaker 2: You know, I see it all it right, all right,
• 12:25
  Speaker 2: at the condos.
• 12:26
  Speaker 1: I do believe interesting about government in general, it's only
• 12:31
  Speaker 1: when it's an issue, the government.
• 12:35
  Speaker 2: Generally, you know, react there they're react.
• 12:41
  Speaker 1: Because I saw that right insurance was an issue, so
• 12:44
  Speaker 1: different laws were passed over the past two years in
• 12:47
  Speaker 1: the state of Florida to help remedy, re up some
• 12:52
  Speaker 1: capacity and try to and try to do things. These
• 12:56
  Speaker 1: two hurricanes, what we just had is probably not gonna help,
• 13:01
  Speaker 1: not at all. Smart insurance market which is which is
• 13:04
  Speaker 1: a shame. But I believe that it's still going to
• 13:09
  Speaker 1: be contained to be worked on. And I also believe
• 13:13
  Speaker 1: between now and there's just a gut a gut call.
• 13:18
  Speaker 1: But I don't think because there's so many condos in
• 13:21
  Speaker 1: South Florida, this spend over this per condo unit of
• 13:27
  Speaker 1: reserve that under the state law, I don't believe that
• 13:32
  Speaker 1: it's going to stay in law for so long. I
• 13:34
  Speaker 1: think it's going to have to be mitigated and changed.
• 13:37
  Speaker 4: It should have been phased, Yeah, it should have been phased.
• 13:41
  Speaker 4: You should have glad by the buildings is you know
• 13:44
  Speaker 4: A through S S immediate most of them are C
• 13:48
  Speaker 4: and B. They could have been phased in over five
• 13:52
  Speaker 4: years rather than in people getting hit over the hit
• 13:55
  Speaker 4: you know, one hundred thousand dollars bills in these condos,
• 13:58
  Speaker 4: they are not motion are not unusual right.
• 14:04
  Speaker 1: Yeah, By the way, I see the statisticated developments because
• 14:08
  Speaker 1: some of these condo buildings are old.
• 14:10
  Speaker 2: What are they doing? They know there's this pressure point
• 14:13
  Speaker 2: with this reserves from millions of dollars. Uh, they're going
• 14:18
  Speaker 2: making proposals to the boards of these condos.
• 14:21
  Speaker 1: Uh. You know, I'll buy out all the condos for
• 14:24
  Speaker 1: X and name a time. I see that land right,
• 14:26
  Speaker 1: You've seen that right on the ocean to develop. I've
• 14:29
  Speaker 1: seen related in other companies down there. Uh do that successfully.
• 14:33
  Speaker 1: So we'll we'll, we'll, we'll see where this goes. But
• 14:37
  Speaker 1: you know that there's many, many, many condo owners, as
• 14:41
  Speaker 1: many condos and kind of owners, and I think that
• 14:44
  Speaker 1: there is a lot of frustration there. And when you
• 14:48
  Speaker 1: have a large scale frustration again we saw we saw
• 14:51
  Speaker 1: with the insurance issue, and I think they can have
• 14:53
  Speaker 1: a lot of lobbying as well to mitigate this issue.
• 14:57
  Speaker 4: So one of the things I know is one of
• 14:59
  Speaker 4: your pet CAUs is also one of mine, which is
• 15:03
  Speaker 4: better health, especially through nutrition. And not to get political,
• 15:08
  Speaker 4: but the RFK junior being elevated by Trump in his
• 15:15
  Speaker 4: campaign and you have to make America Healthy again campaign.
• 15:22
  Speaker 4: You know, this is a national disaster here. We have
• 15:25
  Speaker 4: the worst health of any developed country in the world.
• 15:28
  Speaker 4: Although pretty much. The rest of the world is racing
• 15:31
  Speaker 4: to catch up with us here, obesity, all these things,
• 15:37
  Speaker 4: and it all comes down to what you put in
• 15:39
  Speaker 4: your mouth under thing.
• 15:41
  Speaker 2: So you have what I see.
• 15:44
  Speaker 1: I saw is five major companies control the food. So
• 15:47
  Speaker 1: what do we see once let's just take.
• 15:50
  Speaker 2: A step back.
• 15:51
  Speaker 1: Eighty percent of just feeling good. All us just want
• 15:54
  Speaker 1: to kind of feel good. But like you said, it's
• 15:57
  Speaker 1: the food we eat, the what do we drink, and
• 16:00
  Speaker 1: the air we breathe. Those three if those can be
• 16:06
  Speaker 1: why should we put chemicals in our body?
• 16:09
  Speaker 4: Right?
• 16:09
  Speaker 2: Like they shouldn't have chemicals.
• 16:12
  Speaker 1: They should be good for us and not cause us
• 16:16
  Speaker 1: to feel obeace or and then and then basic you
• 16:20
  Speaker 1: can do it's free exercise. You go for walks every day,
• 16:24
  Speaker 1: right and then and then sleep. So much of healthcare,
• 16:28
  Speaker 1: the trillions that we spend healthcare so would be it
• 16:32
  Speaker 1: would be wiped away.
• 16:34
  Speaker 2: Uh.
• 16:35
  Speaker 1: You know, Medicaid, medicare, all of those issues. You know
• 16:39
  Speaker 1: what they are, not for profit neighborhood farms USA. So
• 16:43
  Speaker 1: we're slow and steady. Uh, in our workforce, thousand communities,
• 16:48
  Speaker 1: we're uh in the green areas. Instead of having non
• 16:52
  Speaker 1: edible we're having kind of raised gardens, teaching, uh, teaching
• 16:58
  Speaker 1: the kids instead of them going out and making.
• 16:59
  Speaker 2: Trouble after school. Teaching them.
• 17:02
  Speaker 1: You'd be surprised they really don't know about what healthy
• 17:06
  Speaker 1: eating is. So it's an education program to teach, you know, workforce.
• 17:12
  Speaker 2: Housing, community about healthy eating.
• 17:16
  Speaker 1: And it's crazy because a fruit and vegetable, which basically
• 17:21
  Speaker 1: you complied to in the ground, is actually more expensive
• 17:24
  Speaker 1: than processed food.
• 17:25
  Speaker 4: Oh yeah, well it's all economics. And look the worst
• 17:31
  Speaker 4: chemical of all though, we don't even consider a chemical.
• 17:35
  Speaker 4: That's sugar. And there's something like two hundred and forty
• 17:38
  Speaker 4: different names for the sugar that goes into food dextros.
• 17:41
  Speaker 4: I mean, you look at it. If you can't understand
• 17:44
  Speaker 4: what it is, it's probably sugar. And if we just
• 17:47
  Speaker 4: cut out ninety percent of the sugar and a substantial
• 17:52
  Speaker 4: portion of grains, that alone would have a dramatic effect
• 17:56
  Speaker 4: on global health.
• 18:00
  Speaker 1: Think that, why should it be that there's certain foods?
• 18:03
  Speaker 1: Think about this way, why should it be that there's
• 18:05
  Speaker 1: certain foods that were addicted to They say, the hardest
• 18:08
  Speaker 1: thing to talk about sugar. That's the hardest thing to
• 18:13
  Speaker 1: wean off to really be sugar. I know, for me,
• 18:16
  Speaker 1: just my coffee, something simple, just to not have sugar
• 18:20
  Speaker 1: in my coffee.
• 18:20
  Speaker 2: It was like.
• 18:21
  Speaker 1: Struggle and right and and then when I got there.
• 18:24
  Speaker 1: But it's it's it's a it's a process for sure.
• 18:29
  Speaker 4: Yeah. You know that experiment they did where they put
• 18:33
  Speaker 4: they gave rats heroin, cocaine and sugar, and the rats
• 18:39
  Speaker 4: skipped the heroin and cocaine and they went right for
• 18:42
  Speaker 4: the sugar and they got addicted to it. It's the
• 18:45
  Speaker 4: most addictive thing. And you got to eat. You don't
• 18:49
  Speaker 4: necessarily have to inject stuff in your body that becomes
• 18:52
  Speaker 4: a need, but you have to eat. And that's the problem.
• 18:55
  Speaker 4: That's where they got us. And is it a conspiracy
• 18:59
  Speaker 4: or did it just happened over time. We're not even
• 19:02
  Speaker 4: getting into seed oils and all the other stuff that's
• 19:06
  Speaker 4: out there that you know is awful. So I applaud
• 19:09
  Speaker 4: you for that. Hey, we want to connect with you,
• 19:13
  Speaker 4: want to find out what you're doing. How do you
• 19:15
  Speaker 4: do that?
• 19:16
  Speaker 2: So we have our podcast I'm a Denominator.
• 19:20
  Speaker 1: We've got almost about two hundred episodes, range with many
• 19:24
  Speaker 1: about mindset about business. That's on Apple, Spotify, YouTube, wherever
• 19:30
  Speaker 1: you can get your podcasts. But and then I handle Instagram, Facebook,
• 19:35
  Speaker 1: LinkedIn m poppak Mosha Pope back and you can find
• 19:39
  Speaker 1: buy me there. All right, Yeah, welcome to any questions
• 19:43
  Speaker 1: and ideas.
• 19:44
  Speaker 4: Great. Well, we'll have a link in the show notes
• 19:46
  Speaker 4: of this interview on Financial Survival Network dot com. And
• 19:50
  Speaker 4: while you're there, please sign up for your free newsletter.
• 19:52
  Speaker 4: I you've got a question for Mosha myself, shoot me
• 19:55
  Speaker 4: an email k L at Kerrie Let's dot com. Mosha.
• 19:58
  Speaker 4: We'll talk to you again soon. Thanks so much, Thank you, Kerry,
• 20:01
  Speaker 4: thank you so much.
• 20:02
  Speaker 3: Thanks for listening to Carrie Letz's Financial Survival Network your
• 20:06
  Speaker 3: solution to today's trying times. For the latest, go to
• 20:10
  Speaker 3: Financial Survivalnetwork dot com. Financial Survival Network now more than ever,