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The Real Estate Addicts (REA) podcast is a must-listen for anyone interested in real estate development, investment, construction and entrepreneurship. Each episode dives into a wide range of industry topics and features conversations with savvy, successful entrepreneurs who candidly share their career paths, challenges, breakthroughs, and the stories behind the remarkable companies they’ve built. Expect big personalities, thoughtful insights, and conversations that both educate and inspire.
Co-hosted by Ray Hurteau, Dan Rubin (Instagram: @rhinvestgroup), and Marc Savatsky (Instagram: @choose_boston)
Follow the Real Estate Addicts Podcast on YouTube: @RealEstateAddicts
00:09
Right. We're back. We're back. And then we're not muted. Looks like we're unmuted and recording. Hey, look at that. Welcome to the Real Estate Addicts podcast, take two. Mark Savatsky, Choose Boston. Dan Rubin, RH Investment Group. Ray Hurteau, RH Investment Group. So I was mentioning earlier when we were, thought we were recording, but we were not, that had a friend come to the office, to the union this morning. And he was saying that he was at an event for Colliers with some of like the bigger commercial players and the guys on stage.
00:39
were sort of preaching that there's a lot of debt, a lot of money out there from banks, traditional lenders who are interested in putting it into projects and employing that capital. Like multifamily projects. Yeah, multifamily projects. like even at terms which even given today's interest rates, like aren't crazy. Like it's not that much more than like what a retail consumer pays for a residential loan for an investment. Is this because banks are maybe getting desperate to deploy capital now? I think they have a lot of capital on the sidelines.
01:08
I think they're itching for deals, but his retort response, which I thought was very interesting was like, yes, you can get ah somebody to come in on first position, but the equity, the mes debt, the pref debt, the family offices, the life insurance companies, uh these guys are nowhere to be found. If you put them second in the capital stock, all of sudden they're, you know, deer in headlights, then they're not lending. So unless you're going to write the check out of your own pocket ah for the difference between what the
01:38
the debt sources and the cost of the project, it's really tough to get a project going. That's why you're seeing a lot of these larger multifamily projects get installed. Like the smaller stuff can get capitalized fairly easily, like the stuff that we're doing, right? But the bigger projects you're seeing so much, you're seeing the approvals, but you're not seeing anything being built, probably because of that. And you also don't know what the primary lenders are charging or what they want you to bring to the table from an equity standpoint.
02:08
because long gone are the days where you can just bring 25 % to the table. People want 30%, like lenders want 30 % plus now. And when you go out there and the equity is so expensive that it just kills the project. It doesn't make sense. Right, you gotta bring more equity and that's more expensive. Right. And you can't even find it.
02:31
Well, I was going say, why can't you find it? What would they Well, you could probably find it. It's just going to be very expensive to find. I mean, I'm sure you... I... I... Anecdotally, I heard of a very large developer, um, locally, uh, who has a... has a, uh, allegedly a very nice project and went out to the debt... to the equity market and came back with goose eggs. So they used a debt broker. Really? They came back, you know, a month later and sat around the table and they're like, so, who do we have competing for the equity slice? It's like, nobody. And what was the reasoning?
03:00
Because of that, the risk factor. That's a very common thing out there. So a couple of things are happening in the equity market. One is, as we've talked about, I think the political risk represents a real headwind. Are we talking about what specifically? Like the rent control measures? Oh, so these are multifamily rentals. It's not for sale development. Both are having just as hard of a time. You're better off with a rental than a for sale product if you're trying to source equity.
03:28
because a lot of these funds are, it's a tax decision for them. And they're written in such a way that doesn't let them invest those funds into a for sale product. Cause they want to deploy it longer term. Yeah, yeah. They don't want to get hit with whatever K1 you're going to send them for having.
03:46
You know, yeah, they long term capital gains. They don't want short, right? Right, right. Which seems kind of silly. Like why wouldn't you just want your fund to perform better? And if the for sale market will be doing better, well, you're not just, if you're de-risking things by the, by doing a for sale development, it's you're, you're bringing something in versus nothing, guess. I've also heard again, there's no data to support this, but that like the St. Regis, uh, which has had, you know, well-known problems in terms of, uh, it's sales. Um,
04:16
including some foreclosure auctions, you know, on each floor of the building. that's like, that's like on the one end of the spectrum, right? But it's scaring the piss out of uh the equity market. Yeah, I could see that. And it's tough to, you know, speak reason always to people's like fears. And they see that and you can say all the reasons, you know, like one of them I heard recently was that there's no, the feng shui in the units is bad. And there aren't any 90 degree angles. It's built,
04:45
resemble like a sail, like a sailboat and those columns lean in and I think it's quite cool from the outside. But apparently a lot of the foreign money is, you know, pulling back from those purchases for years and years now because this isn't a new product on the market. That's interesting. Didn't you have a Feng Shui, not to get off topic, did you have a Feng Shui expert over in your Newton project? You I said that if I built a project in Newton again or a suburb that has good schools where international buyers will place money, I would hire a Feng Shui expert to the point that
05:14
I don't think I would have had a unit four. I would have gone two, six, eight, 10, 12. Oh, interesting. four is not a lucky number. Wow. Yeah. Good to know. All right. And more windows. That's the other thing. Oh, more windows. More glass. More glass. More natural light. More bigger windows. Like I value engineered 50 grand of structural steel out of that building. I probably paid for that two and a half times in my sales. Interesting. With the number of buyers who walked in. You know, the end units went like this.
05:41
because they have three exposures of glass and lots of light. But the middle unit's by the nature of a townhouse. Huh. You know, didn't have the biggest windows in the front. I could have done bigger. Interesting. Yeah. All right, so it's good to know. Tell us about this cold plunge situation you were telling us about before we started. So cold plunge, the union right now is like right on the precipice between being a co-working space and being a like a Turkish bath, spa situation. Turkish bath.
06:11
She's got people walking around in towels. Bathrobes. Oh, bathrobes. Sorry. They're embroidered. They say the union and they say your name. Yeah. Alibaba. Oh my God. Wait, didn't you get the laundry thing on Alibaba or did that die? Like what happened with that? No, no, that was a scam. That's that's all gone. my money back. Okay. And you weren't trying to buy it anymore? Like the, luster wore off of whatever the laundry machine was that you were doing. Like it steamed your clothes. Yeah. More recently I'm trying, I'm buying a mini excavator.
06:40
Oh, really? From, from, yeah. Another Alibaba. I I'm thinking about buying some exterior furniture on Alibaba. I think I texted you the other day. yeah, yeah. Amazing, dude. Really? You sent me the link to Restoration Hardware. Yeah. And then the next one, I'm like, I'm pretty positive that like RH Hardware buys from... I always wondered that. Do they buy from there and then slap their label on it or are they just getting knocked off and you're... I mean...
07:06
They're going to find this episode and hunt you down when you hear equipment, you have furniture. I mean, it's, I'm buying it legit from a company that's making it like, but back to the Turkish baths. So, um, hydro systems, I get introduced to their VP of sales through our friends at Futura. Uh, this guy's name is Kenny. Awesome dude. He, uh, he and I chat and I'm telling him about the union. I'm like, we just got our first sauna, uh, donated by a sponsor, backyard design systems. And, um, I'm like,
07:35
I'd love to also put a cold plunge next to it." And he's like, well, tell me the pitch. Like, why would it be good for the union? And I was like, listen, we have a lot of high-end single-family home builders and a lot of multifamily builders. And like right now, the thing that everybody wants is like health and wellness. our really rich buyers want a cold plunge in their house or in their backyard. You know, they probably want a steam shower too. And we've talked about that as well. But I think as far as an amenity goes,
08:04
the cold plunge and the products that they offer, hydro systems, punch above their weight. Because we think about square footage. We think about how much space we need to allocate to a given amenity. And if you're walking a tenant around, a prospective tenant, and you show them the cold plunge area, and I just think that that's like one of those things that you go home and you remember. like, oh, It's super hot right now. Everyone's focused on health and wellness, you know? Especially you see some of these like huge single-family houses that they're building. They want, you know, they have these like,
08:33
massive spaces like in the basement or lower level or even like in a pool or a secondary A huge backyard, right? Sorry, a secondary building. They usually have the pool house, right? Yeah, pool house or ADU, but it's like the second floor, the first floor is all health and wellness. So like they have their free weights and they have their sauna and they have their cold plunge and they have a massage room and they have like, they have all this stuff and all these amenities and everyone wants that in their house now.
08:59
I think it's cool. So we were, left it as you said, like I have one condition we're on board and we're going to support the union. Uh, but I'd like you guys to wait until September because we have like version 2.0 for our cold plunge outdoor cold plunge product and it's a mobile mobile ready. So it has its own app. You can turn it from a hot tub to a cold plunge. Uh, I saw a picture of it. It's super slick. It's like very modern, uh, think like concrete encasement around the outside. And then the top is a solid surface white. Um, and it's, uh it's,
09:28
Does it look like a tub or is it something you stand in? I'm confused. It's proper cold punch tub. can steam in the tub also? can turn it into either hot or tub almost. Like a hot tub. can change it, yeah, from your phone. So I'll report back in September when we get it. Please. I'll get you guys each a bathrobe with your name on the Union logo. Perfect. Excellent. I like it. It's just one at a time though, right? I mean, you you. It's 2026, It's all good. I can see that in a You're saying you want to share?
09:58
I don't care. I'm just curious how many people were putting in this thing at once. When guys say that you're partners, do you say you're business partners or just much? It's funny you say that because sometimes, yeah. Depending on the audience. Depends on the day. Yeah. We say partner and then they're like, oh, so your husband's want to do something. like, no, no, we're business partners. Yeah. It's all good. I think we're husband. We're open. Yeah. I just threw you off. You really threw me off. Why are we here? We're here. I want to try something new.
10:27
I'm calling it the Multifamily Minute maybe. Just a couple of news articles and I printed them out because I suck at remembering things off the top I point in time, like, what's going on right now? We'll call these some. Tell us what's Updates from May of 2013. All right. 13? Excuse me, 2026, May 13, 2026. right. So this one came from the Multifamily Dive and some other places, but essentially, you guys remember the pandemic, right? How much fun everyone had there?
10:56
Remember when they put us on lockdown? Yes. And you couldn't evict anybody? So now the federal government is staring down a bill of over $1 billion, all on the tab of taxpayers, of course, from that policy decision where they froze evictions. What, from the raft payments? the CDC eviction moratorium. So the multi- from the federal government could pay about a billion dollars to settle claims from roughly 1,800 landlords who say the nearly year-long eviction freeze from the CDC during COVID-19.
11:23
cost them rental income and most importantly violated their fifth amendment rights in the case known as Darby Development versus United States. The legal road was long on August 7th of 24, the court of appeals for the federal circuit overturned the lower courts dismissal of the case. So essentially got dismissed initially, then they overturned it. And they held that the landlords had plausibility stated, had plausibly stated a fifth amendment takings claim was valid. And then,
11:52
Reported by Jenner and Block on June 6th of 25, the federal circuit denied the government's petition for rehearing. One judge noting the case would benefit from Supreme Court guidance, given its high financial stakes. And then according to BizNow, attorneys at Duane Morris wrote that, Darby to proceed opens up the potential for billions of dollars in takings claims against the federal government. At the same time, the government is waiting through tariff refund requests. So we have to have that going on separately.
12:22
But the legal theory, the moratorium stripped landlords of their right to exclude non-paying tenants and under Cedar Point Nursery versus Hasid, that is a per se physical taking, not a regulatory one and was a much easier legal standard to meet. So high level, the eviction moratorium that the CDC put in place during COVID was not legal. It seems to be trending in that direction and- And the government is gonna be
12:52
stuck with a billion dollar bill. Possibly. Now, the claims from the article, which I sent in the summary here, were saying that the estimated economic loss was around 54 billion. So one billion in damages is essentially a drop in the bucket. And there were rental assistant programs run out, but the I haven't filed my claims yet. Well, you have until September of this year. Okay, good. And you can reach out to the attorneys hoping to get the case resolved. They're obviously looking to settle, but- I'm down hundreds of dollars.
13:20
I don't know. It's, something that we've talked about. Like you can't just put a moratorium in place and expect no consequences because if you have somebody that's aware of that situation and then takes advantage of it, what are you supposed to do versus somebody that is actually struggling? So, mean, it will prevent things like this from happening again. Now that there's precedent. Right. Maybe it's a very interesting situation because this took six years to play out. I'll pivot off this slightly. Another challenge we're having right now is
13:50
first time in a long time where rents are coming down in Massachusetts and Boston. No. Yeah, rents are softening. Between four and 7 % is what I've heard. uh Some would say that uh there's some larger buildings that have come online and those are absorbing much more slowly. And that's what's skewing towards the seven. I've heard others, uh smaller guys like, was it, uh Demetri, Boston Pads, they do their own data.
14:19
Yeah. And their data would suggest it's closer to 4 % down. And I think that their data is probably more our properties, though the smaller to mid-size multifamily than it is the like brand new avenue um or uh but where I was going with the low income stuff is that uh they're running low on funds. So traditionally our market rates were pushed by section eight rents.
14:46
shockingly, and for the longest time you'd like sit around like, I'm gonna leave what I get for a section eight three bedroom. And now there's like no money in those coffers for the section eight. So those rents are really being pinched. And that's also like, you know, kind of putting negative pressure. it's interesting that you say that because that kind of leads into your next topic on the second. It sure does. And I don't want to, I don't want to cut the conversation off. No, no, I think it's relevant. Well.
15:12
Do it without reading It does a couple things. I can't not read it if I don't... Yes, you can. It's very easy. Let's do it. No, no. Let me take care of this. So number two here. This one has to do with a mass rental voucher program, which is like... It's a housing subsidy. But it's administered and funded straight through Massachusetts only. Okay? And then they also have another one, AHVP, which is alternative housing voucher.
15:39
They're essentially what's happening is to follow up on what you're saying about the smaller pool of funds that is very specific to Massachusetts, right? But we also have at the federal level, they want to change how the funds are allocated. So just to sort of not close the loop there, there's two separate things when you talk about Section 8. There's the federal bucket and then Massachusetts has its own bucket. So we're going to talk about the Massachusetts bucket and I'm to go back to the ah
16:08
rent control discussion that we had. And the long story short here is that the executive office of housing and livable communities just basically sent a letter out nonchalant to all program participants and landlords saying that they're effectively putting a 3 % cap on rent increases. And this was done uh apparently through no legislative process. It's just program guidance.
16:35
and I now draw the parallel back to this federal lawsuit, is this now, it's not the same thing, but is it basically rent control? This is essentially rent They're basically putting rent control in place without rent control being in place. On what, affordable units? No, no, no, no, no, no. This is just individuals who have MRVP and holders that have this Massachusetts voucher, state voucher. It's like having a BH, like people have BHA vouchers, people have MRVP vouchers, people have, but like- No, no, BHA, let me just clarify.
17:04
BHA, Metro Boston, all these places, they're public housing authorities. They administer the vouchers. They administer both federal and state vouchers. So we're talking about the state vouchers. And what's the percentage? That I don't know. But we have in our portfolio, we have a number of voucher holders and typically the process to- So they're gonna call you and be like, listen, Ray, I know you wanna increase my rent, but here's the issue. My voucher's only going up by 3 % and I can't do anything more than that.
17:30
They're saying you cannot request more than three percent. cannot request it. You cannot request. They will not grant more than percent of an increase regardless of CPI or any other factors. the other thing is that typically, you know, a section eight, a voucher holder will, like the housing authority or the government will pay a certain percentage of the rent and then the tenant is responsible for the difference, right? Sometimes they might pay 100 percent, sometimes they pay 90 percent, whatever.
17:59
You can't even ask the tenant to pay more. can just not, 3 % is the cap. Correct. And there's a few other cuts that they're making probably for the funding thing. They used to pay for security deposit, some utility reimbursements and some other things for disabled households. The ones who actually need it, they're cutting those funds as well. They're just screwing over the people. increase the friction and the approvable nature of folks. Cause if you can't afford to pay more than call it a couple hundred bucks for your rent.
18:27
how are you gonna come up with a full security deposit for a new apartment? And then if the 3 % is capped, what will end up happening at the end of the day is people will just say, if I can't get the increase and the market's gone up enough, we'll just say we're not renewing since it's month to month and turn over tenants that way, which kind of defeats the purpose. Cause once you reset, it's not like the guidance says it goes backwards and retroactively looks at the prior rent. So you're gonna increase the evictions because- Well, not necessarily evictions.
18:55
try and hope it's a move out, but if they don't move out, then, or they can't move out. not gonna move out. Right, but uh all these programs piss me off so much because they try and do things that sound good, but they just fuck with the market and it doesn't make any sense. They fuck with the market and then they ultimately fuck with the people that are trying to rent. Right. Well, where's the federal government in this? Like, you know, Trump 2.0 here, like...
19:23
this should be something that you'd like latch your teeth into. Like stop worrying so much about transgender bathrooms and like actually like think about people who are just meddling in the free market and destroying the problems. is a state specific thing though. Well, it doesn't matter because now there's the- Can't like the attorney general sue the state and be like, you have to stop this socialist- Do you think she cares? No, they're probably all behind it. And I don't want No, no, no, the attorney general of the federal government, not the attorney general of Massachusetts. don't know.
19:52
Yeah. Nice enough of a headline. I don't know. They're like defunding all the universities in Massachusetts, taking away grants. It's like the biggest, I call it like an own goal, you know, like a defender who like turns around and shoots on his own goal. Like, what are you doing? That's basically how the Trump administration is handling Massachusetts right now. Like instead of doing that, like come at us guns blazing over policies like this. I'm here for it. Like, what is this? It's Wyatt. Yeah. Well, it's funny enough because obviously we talked about rent control, but the current
20:20
law of the land is that you can't have rent control and this essentially conflicts with that. So we'll see what happens. Yeah, I'm changing the subject now. Moving on. Do you see, I read an article over the weekend that Wu is now considering tax breaks to spur housing development now. So she's basically now flipping. Where's your multifamily minute on that? I just read the article. it's just like now she's talking out of the other side of her mouth. It's wild. I don't get it. Well, I can tell you why.
20:50
Because there's no, the facts of the matter is when you start taxing everybody to hell, it's just the same as, where are they trying to tax everybody in New York, right? When Dami wants to tax everybody and no one's going to want to do business there. goodbye. Money talks and money walks. You need rich people. As much as you may hate them, you need them to create jobs and spur the economy. know, what happens is there's going to be layoffs in the city hall and there's.
21:18
Already salary freezes and we're getting emails back from our plans examiner saying things like sorry for the wait I know we promised you these in four weeks It's gonna be more because we've been told by our superiors that there is no overtime available and like That's cuz all these overtime. It's also like interesting to know it's an interesting thing to say like they scum the customer You're the customer. They can you imagine writing to a customer in a in a private sector job like hey?
21:47
Sorry you're disappointed with the service. My boss won't give me overtime this week. I'm not going to get to it in the time I promise. Like you get chewed out. Or you'd immediately just be like, I'm not doing business with you. Like, see you later. I know, know. You know, it's just. That's like your call today with the dumpster company. Oh, sorry. We only have two trucks available. So. Bro, call Circa Demo on disposal. 1844 Waste Less. Yeah, but I need a 30 yard dumpster sitting on my job site. Can you offer that? You don't want that.
22:15
No, I do. We do. The customer is always right, Mark. Call Andrew and Justin. That's just going to take up space. Yeah. And your guys aren't going to load it anyway. And then you're going have to pay for laborers to load it. They'll load it. Right now, because you have framers on site. And there's no diffusion of responsibility for who's not cleaning up. But once you get like four trades out there, forget about it. OK. I don't know. This has been the multifamily minute.
22:43
I don't know, see what you is good, this is good. If you guys wanna hear more about current events in the real estate world, let us know. And if there's any specific real estate topics you want us to cover, hit us up in the comments and The next update, we'll probably be talking about the Roads, the Housing Roads Act or something like that. It passed in the House, the House and the Senator are Rent control in November. Rent control in November. We'll have some more updates for you. We're gonna try and hit local and national levels and just what's going on. Things that we read about that we...
23:12
chat about internally, we'll share with you. uh one more shout out to Hydro Systems for sponsoring the union, uh, with their cold plunge and spa products. Um, you know, just awesome group and, I'm really grateful. uh, can we, um, and everyone's invited here. Uh, only Dan and Ray are getting their own bathrobes, but first a hundred, first a hundred, uh, customers get their bathrobes. Come check it out. The unions we're doing good stuff. We're excited. We'll check it out. Thank you for listening.
23:40
rating, reviewing, subscribing, watching. We'll catch you on the next one. Cheers. you later.