The Real Estate Espresso Podcast

The question is whether you want to partner with the city or not. The city can add value (or erode it) without being formally at the partnership table. How many people underwrite the city as part of their due diligence?
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**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 sponsored by The Cost Segregation Guys. If you own investment real estate and are not taking advantage of accelerated depreciation, you're probably leaving money on the table. Check out the Cost Segregation Guys using the link and you will qualify for a discount on their services.
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Today's show is a case study of a property that is about to go to tax sale. That not the interesting part. The real question is "Why would anyone own it?" and "Who would ever buy it?"
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**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 we’re talking about a change in the condominium market that has received surprisingly little attention.
The question is not whether your condo is worth $300,000 or $500,000.
The question is whether a buyer can get a mortgage on it.
We saw this problem extensively in the wake of the 2008 financial crisis. There were condominium projects all over the country where individual owners stopped paying their mortgages. Many also stopped paying their condominium fees.
As delinquencies increased, the financially healthy owners had to carry more of the burden.
Fannie Mae still has rules addressing precisely this issue. Under its Full Review process, no more than 15 percent of the units can be 60 days or more delinquent on regular HOA assessments. The same 15 percent test applies to delinquency on special assessments. 
Fannie Mae announced in March that it is increasing the minimum replacement-reserve allocation under its Full Review process from 10 percent to 15 percent of annual budgeted assessment income. That new 15 percent standard becomes mandatory for loan applications dated January 4, 2027 or later.
Fannie has also tightened the rules governing reserve studies. If an association is relying on a reserve study rather than the standard budget percentage, the lender must use the highest recommended reserve allocation in that study. The old baseline funding approach, where the reserve balance could essentially approach zero without going negative, can no longer be used to justify the exception. Those reserve-study changes became mandatory for applications dated August 3, 2026 or later.
Freddie Mac has moved in the same general direction, although its current numerical budget requirement remains 10 percent rather than Fannie’s announced 15 percent. Freddie has likewise eliminated use of the baseline funding methodology when a reserve study is being used as an exception. It also requires lenders to use the highest funding recommendation contained in the reserve study.
Your condominium is no longer being underwritten merely as an individual piece of real estate.
The lender is effectively underwriting your condominium association.
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**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)

Frank Rolfe is based in Missouri and invests in mobile home parks across the US. He is the fifth largest owner of mobile home parks in the country. On today's show we are talking about the "buy box" for mobile home parks and the which properties you should stay clear of.
To connect with Frank, visit mhu.com
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**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)

Neal Bawa is based in Silicon Valley where he invests in multiple asset classes including new development in several markets across the US. On today's show we are talking about the state of the apartment market in the sunbelt. In particular, Neal makes a distinction between the syndication market and the rest of the apartment market.
To connect with Neal, visit https://multifamilyu.com/club
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**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)