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Capitalizing On The Crazy Real Estate Market – With Or Without Upfront Cash


Capitalizing On The Crazy Real Estate Market – With Or Without Upfront Cash

How Investors Who Find Their Niche Can Prosper

The real estate market continues to experience skyrocketing prices and lower-than-normal inventory, leaving a general state of frustration and confusion in its wake.

But despite these unsettling times, real estate as an investment remains a good option, even for people who aren’t flush with cash, says Toby Mathis (, a tax attorney and ForbesBooks author of Infinity Investing: How the Rich Get Richer And How You Can Do The Same.

“There are ways to get involved in real estate without having a nickel to your name,” says Mathis, who owns several hundred pieces of real estate throughout the United States. “You could jump in and start doing this right away just by creating the relationships, finding the need, and helping put deals together.”

Mathis says a few ways to make money off real estate – with or without an upfront investment – include:

  • Bringing buyers and sellers together. Play the role of the middle man, helping investors find the properties they seek. Mathis likens this to someone giving you a grocery list. Investors specify what kind of property they are looking for and in what area, then you act as wholesaler, making connections to track down properties that fit their requirements. “There are people with massive appetites to acquire properties, and they need people who can go door to door, who know the area, who have the expertise to go out and do that,” he says. This role is both simple and difficult, Mathis says. “It’s simple because you know exactly who you’re buying for and you know what to look for,” he says. “But it’s difficult because you have to do the research and put in the labor.” Mathis says he buys many of his properties from such wholesalers. “Just recently,” he says, “they brought me a great warehouse, something I was looking for, at the right price.”
  • Owning rental property. One of the advantages of owning rental property, Mathis says, is that it provides you with passive income. Unlike the paycheck from your employer, passive income is not subject to Social Security tax or Medicare tax. It’s also not subject to self-employment tax. You do pay income tax on money you make from rentals, but deductions such as depreciation and upkeep can reduce that amount. “One of the great things about it is you can have someone else manage the property for you and sit back passively and take in the income,” he says. But there are caveats. For example, if you operate your property as an Airbnb or a traditional bed and breakfast, providing services to the guests, you can be subject to the self-employment tax, Mathis says.
  • Owning land without structures. When it comes to generating revenue from real estate, people often think about apartment complexes, self-storage facilities, warehouses or similar structures. But Mathis says there are other ways to bring in money, such as with a cell tower or by selling mineral rights.
  • Considering other lease opportunities. Another way to bring in income from real estate is to provide housing for disadvantaged groups. That could mean veterans housing, residential assisted living for the elderly, or transitional housing for non-violent offenders, among other possibilities. “There are people getting county money constantly to do transitional housing,” Mathis says. “Some organizations lease these properties, then contract them out to other organizations.”

“There are endless opportunities when it comes to real estate,” Mathis says. “It’s just a matter of figuring out which of these niches is best for you and your circumstances.”

About Toby Mathis

Toby Mathis, Esq., is the ForbesBooks author of Infinity Investing: How the Rich Get Richer And How You Can Do The Same. Mathis, a tax attorney, founded Anderson Business Advisors, one of the most successful law, tax, and estate planning companies in the United States. In addition, he is a successful investor and owns several hundred pieces of real estate throughout the U.S. His businesses have been featured five times on the Inc. list of fastest-growing U.S. companies, and have won numerous other awards. Mathis has authored more than 100 articles on small business topics and has written several books on good business practices, including Tax-Wise Business Ownership and 12 Steps to Running a Successful Business.


7th National Conference on CFIUS

The American Conference Institute is pleased to announce the 7th National Conference on CFIUS taking place virtually on April 20-21, 2021! Attend to ensure deal success amidst expanded scrutiny of foreign investments in Technology, Infrastructure, Data and Real Estate. Plus, obtain government insights from the U.S. Department of Justice, U.S. Department of Defense, U.S. Department of Defense Trusted Capital, Delegation of the European Union to the United States, Embassy of Australia to the United States, and the U.K. Department for International Trade (DIT).


-A 360 Degree View of Today’s CFIUS Landscape 1 Year Post-FIRRMA Implementation

-Interactive Think-Tank with CFIUS Alumni: Addressing FIRRMA Pressure Points and Challenges

-Examining New Rules on CFIUS Mandatory Filings: Implications for Critical Technology Investments and the Interplay with Recently Issued Export Control Reform

-Updating Your Mitigation Approach to New and Evolving CFIUS Requirements and Trends

-Managing the New Enforcement Regime and the Uptick in Investigations of “Non-Notified” Transactions

-How CFIUS’s Expanded Jurisdiction Over Sensitive Data is Affecting Deal Reviews, Deal Flows and Mitigation Approaches

-And More!

View the Full Agenda and List of Distinguished Speakers and Register Today!

SAVE 10% off registration with Global Trade Magazine Code: D10-858-858GX08.



Phone: 1-888-224-2480


Cities With the Most Startup Businesses

Startups are a significant driver of the U.S. economy. Each year, thousands of entrepreneurs launch new businesses that create jobs and spur innovation and efficiency across the market. According to the U.S. Census Bureau, more than 420,000 startups accounted for 2.2 million new jobs in 2018.

Unfortunately, entrepreneurship in the U.S. has been declining for decades. In the late 1970s, the startup formation rate in the U.S.—defined as the number of new firms in a given year divided by the total number of firms—was nearly 14 percent. Four decades later, the rate was just above 8 percent

One of the major factors contributing to this trend is firm concentration. In recent decades, many sectors have shown a trend toward consolidation and greater concentration in the market, making large firms even larger and more successful through economies of scale, network effects, and other incumbent advantages.

Economic downturns also tend to slow startup formation, and the Great Recession’s effects on new business creation have proven to be especially stifling over the last decade. Unlike in past recessions, when a dip in startup activity has been followed by a period of growth, the overall startup formation rate fell in the wake of the Great Recession and has more or less remained flat at around 8 percent since. With less economic security due to a long, uncertain recovery, many potential entrepreneurs chose to minimize their risk and forgo new business opportunities. This is especially true of many would-be founders now in their late 20s and 30s, who graduated in a poor job market with large debt burdens.

This past year, the COVID-19 pandemic has brought even more economic hardship, and the unique circumstances of this downturn have created an even more complicated picture. In addition to the typical barriers to entrepreneurship that a recession creates, different industries face divergent fortunes in the era of shutdowns and social distancing. Certain sectors have become even more entrenched in daily life, creating new opportunities for growth in areas like e-commerce, video conferencing, online education, and collaboration tools. On the other hand, COVID-19 is likely to further suppress startup activity in many sectors like accommodation, food services, and retail. In recent years, these fields have experienced stagnant or declining startup formation rates. Today, the prospect of entering these industries will become even more daunting with consumer concerns about health and safety stifling demand and increasing overhead costs.

New startup formation is distributed unevenly across geographies as well as industries. Most of the states seeing the highest rates of new business creation are based in the western and southern U.S., led by Nevada (10.39 percent) and Florida (10.16 percent). Many of these states offer some combination of business-friendly policies, low individual and corporate tax rates, relatively low costs to operate, good educational institutions, and population growth that provides both a customer base and a market for labor.

Unsurprisingly, at the metro level, most of the leading hubs for startup formation are found in the states with the highest levels of startup activity. Many locations in the West and South continue to see strong rates of new business creation and associated job growth. To find out which metros are leading the way, researchers at Roofstock calculated the trailing five-year average startup formation—defined as the number of new firms in a given year divided by the total number of firms. The research team also analyzed the impact of startup activity on job growth.

Here are the large metropolitan areas with the most startup business activity.



Startup formation rate

Annual startup formations

Annual new jobs created by startups

Jobs created by startups as a percentage of all new jobs

Las Vegas-Henderson-Paradise, NV     1      11.44%     3,467     21,074 17.82%
Orlando-Kissimmee-Sanford, FL     2      10.95%     4,861     25,533 16.68%
Austin-Round Rock-Georgetown, TX     3      10.61%     3,858     21,357 16.49%
Miami-Fort Lauderdale-Pompano Beach, FL     4      10.46%     14,894     69,769 18.57%
Dallas-Fort Worth-Arlington, TX     5      9.82%     10,731     69,696 15.11%
Denver-Aurora-Lakewood, CO     6      9.64%     5,590     28,485 14.69%
Phoenix-Mesa-Chandler, AZ     7      9.63%     6,108     37,785 14.02%
Atlanta-Sandy Springs-Alpharetta, GA     8      9.52%     9,140     48,582 14.14%
Jacksonville, FL     9      9.50%     2,474     11,796 14.41%
Houston-The Woodlands-Sugar Land, TX     10      9.48%     9,214     55,475 14.44%
Los Angeles-Long Beach-Anaheim, CA     11      9.47%     24,718     144,716 18.05%
Tampa-St. Petersburg-Clearwater, FL     12      9.47%     5,174     25,792 12.31%
Riverside-San Bernardino-Ontario, CA     13      9.40%     4,867     28,137 16.10%
San Diego-Chula Vista-Carlsbad, CA     14      9.28%     5,599     27,338 15.13%
St. Louis, MO-IL     15      9.09%     4,715     19,078 12.22%
United States     –      8.13%     423,148     2,285,251 14.12%


For more information, a detailed methodology, and complete results, you can find the original report on Roofstock’s website:


The Future of Work is Flexible: Reimagining Office Designs and Strategies to Thrive in Our New Reality

With the Covid-19 vaccine finally making its way through the country, bringing staff back into the workplace is at the forefront of companies’ minds. This has continued to push conversations from when staff will come back to the office, to how.

Archetypes of the workplace

As companies explore the future of the return to the workplace, it has challenged new ways of thinking – how the office will adapt and change, what will be its purpose, and how can it become better for staff.  However, how businesses approach the workplace evolution will be different. From conservative approaches to pushing the boundaries, three mindsets have emerged as we look at the future of the workplace.

Traditionalists – cultures grounded around in-person environments with low investment in virtual working and higher investment in physical work environments.

Progressives – cultures that are flexible and promote a hybrid work model with employees being comfortable working remotely or in offices. Investment for this model will equally be split in the virtual and built environments to support hybrid work models.

Visionaries – cultures encouraging autonomy and remote work with employees who come into the office as needed. This includes a significant spend in technology to enhance the virtual environment and to monitor productivity and performance.

Regardless of your future workplace strategy – scaling, adapting, or staying the same, the pandemic has altered the real estate landscape as we know it. Social distancing, sanitization processes, working from home, and virtual communication are here to stay, even if the vaccine turns out to be everything we’ve hoped for. While we’ve had no choice but to accept this new reality, many occupiers and landlords are struggling with “what’s the best next move” for their space.

As we navigate these unchartered workplace waters, flexibility has emerged as a key player. Office strategy and design will need to be flexible to support the changing needs of staff and companies both in the short and long-term. The question remains, what does flexibility look like in the future workplace?

Riding the Evolutionary Forces

As the saying goes, “change is the only constant,” and while inevitable, change gives us the opportunity to grow and evolve. How and where we work is different from a year ago, which has influenced changes from workplace strategies to business models and processes, to workforces. This has caused decision makers to pause on making long-term real estate commitments until we better understand the lasting effects of the pandemic.

Driving regional and industry trends

As real estate shifts and trends begin to emerge, many will play out differently depending on their location. By the end of 2021 it’s expected businesses will return to the office at a reduced capacity, however, how this will be done is the question.

The pandemic has accelerated an already growing migration of knowledge workers from cities like New York and California to less-expensive locales. Raleigh, N.C., and Austin, Texas, are among the boomtowns attracting young workers. These cool, vibrant cities offer culinary experiences, cultural and social scenes that appeal to young professionals who enjoy an urban lifestyle but find large metro areas too dense or expensive.

The recent growth of these midsize cities shows the pandemic and work-from-home policies aren’t undermining all of urban America. It illustrates a reshaping of what many companies, families and individuals are now looking for, a location that is more affordable, has more space, and access to job opportunities and talent.  Several recent high-profile corporate relocation announcements suggest companies are inclined to follow this migration.

Solutions for “the next best move”

What should be your next move? Research is saying space will be used differently and we still don’t fully know how Covid-19 will influence office use and behaviors in the future. Before making permanent, long-term decisions, companies are trialing office strategies to see how their people are working in a new environment.

Pilot spaces and employee surveys are a good way to learn what will work best for your people. Companies are starting to accelerate these programs, repurposing the workplace to align with work modes and conducting 60-day utilization studies to see if these new workplace designs are effective.  Some actions may include improvements to office décor, an increase in collaborative hubs, and bringing back some private offices or quiet areas, providing staff with a place to go to work and build relationships.

Occupiers with larger real estate portfolios may adopt strategies like maintaining the hub location but adding the spokes (hub & spoke model). This allows them to expand their footprint, keeping their CBD presence, while providing staff with much-craved collaboration, culture, and connection in spoke locations. We’re even seeing C-suite focused hubs emerging to support board related tasks, client meetings, and leadership-driven activities.

The impact of transformational technology on workplace design

With this fundamental shift to incorporate flexibility, transformational technology is going to play a critical role. Firms have already adopted this status quo- leveraging digital tools to improve business operations and communication. As technology continues to power collaboration in the workplace, from Microsoft Teams video meetings, to AI wearables and VR presentations to smart whiteboards, it’s likely work styles are going to shift into more team-oriented environments.

In turn, offices will need to be outfitted to support in-person and remote workers, providing them with the technology and space to seamlessly connect. Leadership communication and change management will play an essential role in navigating the return to the workplace. Outlining clear protocols and processes can guard against burnout, help manage meetings and communication expectations (in-person and virtual), and coordinate teams to make sure they are driving the right outcomes.

As digital innovations continue to emerge, virtual sharing and collaborating will increase, causing reimagined horizons, like a world without email, creating monumental changes in the workplace.

Meeting the pace of change

With the current real estate landscape and continued disruption, there is still uncertainty about what the future workplace will look like. Partnering with a company that has an agile and flexible end-to-end approach to workplace creation, can empower smarter and responsive decision making to meet the ever-changing needs of businesses and their people.

Propeller, a workplace framework, provides stability and a solution for companies’ next real estate move. Using data, the model can help outline what teams’ experiences should be in the office and at home, from purpose and work modes, to behaviors and culture. Whether it’s a long-term commitment to remote work, embracing a flexible model, or taking a wait-and-see approach, this workplace strategy can help outline the best next step.


Ryan leads the Americas region, managing the United States and Latin America. With more than 20 years of experience in the industry, Ryan has led teams to execute complex workplace projects, driven global initiatives, and redefined Unispace standards. With a strong knowledge of local and global markets, he brings his strategic vision to drive growth and improve operational excellence across all aspects of the business.

life sciences

Top 12 Benefits Commercial Life Sciences/Pharma Leaders Must Consider When Evaluating an AI-Analytics Investment

In a detailed white paper titled, “Achieving the Vision of What BI Should Be,” authors at WhizAI highlighted the importance of accurate, timely data for commercial businesses within the life-sciences sector. In order to successfully achieve the very best information in the post-pandemic economy, businesses will need to utilize tools within the technology toolbox to manage the immense amount of information critical to success.

Specifically outlined in the whitepaper is the use of artificial intelligence to help businesses navigate market shifts while accurately tracking the latest trends essential to maximize investments.

WhizAI’s co-founder and CEO, Rohit Vashisht itemized the top 12 things benefitting AI-enabled analytics and why businesses within the life sciences arena should consider this as a critical element in managing data.

1. AI-Driven Real-Time Insights: On-demand insights and real-time charts via Visualization AI

2. Self-Service Access to Content: Ask questions in natural language; drill to any data granularity; minimal training; no code environment

3. Scalable to Meet Evolving Needs: No need to create reports; automatically adapts to business changes (product launch, realignment, etc.)

4. Reduced Manual Upkeep of Reports: AI-powered maintenance and enhancements; lower total cost of ownership

5. User Preferred Interface: Seamless experience across mobile, tablet, web, and text; Voice and text-based interaction

6. Augmented Analytics: Life Sciences trained ML algorithms answering how/why questions; relevant alerts

7. Performance: Lightning fast response to ad-hoc user queries; sub-second responses on billions of records

8. Platform Scalability: Containerized microservices-based architecture; highly scalable; runs on standard hardware

9. Cloud Native and Agnostic: Optimized and designed to deploy on any public/private cloud (AWS, GCP, Azure, etc.)

10. Enterprise Ready: Single sigh on; Multi-tier security provision; audit and log capabilities; behind a firewall

11. Data Source Connectivity: Direct connectors and adaptors for data sources/systems; no need to host filed on FTP/S3

12. Change Management: Minimal planning needed; save time and money in rollouts; high adoption rate


The Best-Paying Cities for Millennials

Numbering over 72 million, millennials have surpassed Baby Boomers to be the largest living adult generation. Millennials, defined by the Pew Research Center as people born between 1981–1996, are now in their prime home-buying years. However, millennial homeownership rates have lagged that of older generations—in part, because while home prices have been rising, income has not kept pace. According to the latest data from the U.S. Census Bureau, median annual income for full-time working millennials was $42,000 in 2019, leaving many millennials struggling to afford a home.

Nationally, data from the Census Bureau shows that while the homeownership rate in the U.S. was 64.6% in 2019, the rate for millennials was just 39.9%. The median income for 25 to 34-year-olds has increased 2.5-fold since 1980; however, housing prices have more than tripled over the same time period. Median income growth for that age group kept pace with housing prices until the year 2000 when housing prices began to rise more steeply. Although housing prices dropped significantly during the Great Recession, they have been rising rapidly since 2012.

At the state level, millennials living in Minnesota and Massachusetts had the highest median incomes after adjusting for cost of living, at $51,282 and $50,137 in 2019, respectively. Due to its very high cost of living, millennials living in Hawaii tend to earn less with a cost-of-living adjusted median income of $37,849 last year. The cost of living in Florida is about the same as the national average, but millennials in Florida earned just $34,990 in adjusted median income, the lowest in the country.

To find the best-paying metropolitan areas for millennials, researchers at HireAHelper analyzed the latest data on income and home prices from the U.S. Census Bureau and Zillow. The researchers ranked metro areas according to the cost-of-living adjusted median income for full-time working millennials. Researchers also calculated the unadjusted median income for full-time millennials, the median home price, and the millennial homeownership rate.

To improve relevance, only metropolitan areas with at least 100,000 people were included in the analysis. Additionally, separate rankings were generated for small (100,000–349,999 residents), midsize (350,000–999,999 residents), and large (1,000,000 or more residents) metros.

Here are the large metropolitan areas with the highest median income for full-time millennials, after adjusting for the cost of living.

Metro Rank Median income for full-time millennials (cost-of-living adjusted) Median income for full-time millennials (unadjusted) Median home price Millennial homeownership rate Cost of living (compared to the national average)


San Jose-Sunnyvale-Santa Clara, CA     1         $60,201 $77,900 $1,219,074 26.6% +29.4%
San Francisco-Oakland-Berkeley, CA     2         $53,191 $70,000 $1,113,664 25.0% +31.6%
Seattle-Tacoma-Bellevue, WA     3         $51,727 $58,400 $555,689 36.3% +12.9%
Boston-Cambridge-Newton, MA-NH     4         $51,664 $59,000 $520,206 35.4% +14.2%
Pittsburgh, PA     5         $51,557 $48,000 $172,719 44.3% -6.9%
Washington-Arlington-Alexandria, DC-VA-MD-WV     6         $50,934 $60,000 $455,038 38.0% +17.8%
Hartford-East Hartford-Middletown, CT     7         $48,972 $50,000 $246,266 41.3% +2.1%
Minneapolis-St. Paul-Bloomington, MN-WI     8         $48,733 $50,000 $307,156 48.8% +2.6%
Cincinnati, OH-KY-IN     9         $48,667 $43,800 $201,822 43.9% -10.0%
Kansas City, MO-KS    10         $48,439 $45,000 $218,314 43.9% -7.1%
St. Louis, MO-IL    11         $47,967 $43,650 $188,845 48.0% -9.0%
Denver-Aurora-Lakewood, CO    12         $47,664 $50,000 $462,724 42.9% +4.9%
Milwaukee-Waukesha, WI    13         $47,489 $45,020 $200,213 35.4% -5.2%
Baltimore-Columbia-Towson, MD    14         $46,860 $50,000 $307,675 44.3% +6.7%
Columbus, OH    15         $46,790 $43,000 $223,010 37.9% -8.1%
United States         $42,000 $42,000 $259,906 39.9% N/A


For more information, a detailed methodology, and complete results, you can find the original report on HireAHelper’s website:

real estate

7 Insights to Prepare Investors for the Impact of the Presidential Election on Real Estate

The 2020 presidential election campaign is a highly contentious affair. Doubtless, the results of the election will have a far-reaching impact on a number of sectors of the American economy. But what are the true implications for the housing market?

How will each candidate’s policies affect real estate? Whether you’re investing in real estate or just looking to buy or sell a house, here are some tips and insights to help you prepare and prosper, regardless of who wins.

1. Keep calm and carry on

Regardless of who wins on election day, real estate prices probably won’t see any drastic long-term changes. Historically speaking, the housing market performs consistently (and consistently well) under both Democrats and Republicans. Since 1979, the annual rate of property returns averaged between approximately 7 and 10 percent for both Democratic and Republican presidential administrations.

Real estate under Republicans and Democrats

2. Prosperity often follows uncertainty

In election years, home sales usually drop off from October to November more steeply than in non-election years (-15% vs -10%). This reflects buyer caution facing the uncertain outcome of a presidential election. However, the year following a presidential election is typically the strongest housing market year in every four-year election cycle, suggesting that the dropoff in November simply delays demand until the following year.

House Price Trends During Election Years

3. Ignore red herrings, watch for black swans

Our system ensures that presidents alone don’t make laws or control fiscal and monetary policy. This means the president’s impact on housing may be overrated. On the other hand, natural disasters, geopolitical events, and ongoing developments with COVID-19 are more likely to have an impact on property values and rent trends than election results. Exogenous shocks to the system can increase unemployment and force interest rate changes, which in turn disrupt financial and housing markets.

4. Pay attention to investor incentives

Election results in the 2020 cycle probably matter a bit more to real estate investors than to retail home buyers. This is because the candidates have divergent policy prescriptions on several investor-oriented policy tools, including 1031 Exchanges and opportunity zones.

5. To the victor go the construction spoils

Red states have reported higher consumer confidence levels than blue states since the 2016 election. Likewise, single-family building permit growth was stronger over the same period in Trump-voting counties than in Clinton-voting ones, despite similar job and wage growth. It logically follows that a Biden win could benefit home building in blue counties, while a Trump re-election could continue propelling strong performance in red counties.

6. Follow the money

Over time, as presidential administrations roll out their spending priorities, different economic sectors respond in varying ways. The true consequences of the election on real estate markets will likely take a couple of years to materialize. Opportunities for investors and consumers to seize will present themselves based on what industries a president focuses on, and how well their administration works with Congress.

7. Weather the storm (and hope it passes quickly)

The biggest short-term risk to the housing market and the larger economy overall is a disputed election and protracted legal battle. Such a scenario would likely be accompanied by widespread civil unrest, which would spook stock markets, rattle consumer confidence, and in extreme scenarios cause massive property damage across the country. During the disputed 2000 election, the Dow Jones average fell 4% in the month between election day and the moment Al Gore conceded. It rebounded rapidly thereafter.


This article originally appeared here. Republished with permission. 


Impact of the Coronavirus Crisis in the American REITs

Victor Kuznetsov, Managing Director of Imperial Fund, examines how US real estate investment trusts are weathering the COVID-19 storm.

Real estate investment trusts (REITs) have always been, historically, a classic of dividend investment through the Buy & Hold formula, which has allowed both retail, institutional and investment fund investors to have periodic cash flows, which complement their pensions in some cases, and that they increase their profit accounts in others.

In general, the REITs were distributing a dividend that usually ranges from the most “modest” of Realty Income (O) of 1.5-2% per year to that of other mortgage REITs such as Annaly or Agnc, whose dividends they reach 8-9% per year.

Nevertheless, the health crisis is practically causing an economic emergency, in which almost all the REITs are seeing their prices decrease, anticipating the fall of the real estate market and the entry into the technical recession.

At Imperial Fund one of the fundamental aspects in this investment sector, which seeks to achieve attractive risk-adjusted returns by exploiting inefficiencies in the residential and commercial real estate lending market, is diversification, which makes it possible to reduce both the beta (risk) of our portfolio, without jeopardizing the return on investment.

General and Sectoral Real Estate REITs

In these historical moments in which the coronavirus crisis is hitting strongly all investment portfolios, including those of institutional investors even though they use hedging instruments, the losses due to the drop in the price of the listing are being high, in view of the prospect of  business downturn and recession across the United States.

Observing the different sectoral types of REITs, and among the most penalized, and which have more possibilities to continue distributing a dividend without decreasing it and recovering in presumably a shorter period, we can distinguish:

Realty Income (O): It is the classic of investment in the field of REITs, it is considered an aristocrat of the dividend, and it distributes a monthly dividend, which in turn allows increasing the utility of compound interest. Its price has decreased from $84.92 to approximately $54, although we should not forget that in the 2008 crisis, its price dropped to $17.

Annaly Capital Management (NLY): It is the mortgage with the largest capitalization in the United States. Its price per share has decreased from $10.50 to $6.70. It is clearly being harmed by the global alarm situation, but that it is another diversified company that allows to systematically cover the risk.

Omega Healthcare Investors (OHI): It is another of the classic and most important REITs in the residential sector for the elderly. Its price has fallen from $45.22 to $17.50. The only explanation from the point of view of the fundamental analysis is that the market is picking up the loss of potential clients in their residence, because it is one of the most punished REITs, although obviously and in the worst case the replacement rate, in both the United States and England is clearly guaranteed.

The current situation should not provoke investors to believe that we are not able to think about the future, a future that, as has happened with previous crises, will always bring something positive, and will reward investors who trust in those companies that have adequate diversification, distribute a sustainable dividend, and are able to adapt to any situation that may arise.

At the present time, we may have entered a general downward curve on the stock market, and the aforementioned share price of REITs will drop further still, but they should be on the investment radar as a possibility in the future not far away.


Imperial Fund is a mortgage investment fund formed in 2014 and headquartered in Hollywood, FL. Imperial seeks to achieve attractive risk-adjusted returns by exploiting inefficiencies in the residential and commercial real estate lending market.


Treasury Proposes Filing Fees for CFIUS Voluntary Notices

On Monday, March 9, 2020, the U.S. Department of the Treasury (“Treasury Department”) published a proposed rule in the Federal Register establishing a tiered filing fee system for parties filing voluntary notices with the Committee on Foreign Investment in the United States (“CFIUS”). The proposed rule accompanies other recently implemented regulations issued by the Treasury Department that implement the Foreign Investment Review Modernization Act of 2018 (“FIRRMA”), effective since February 13, 2020.  We have previously summarized the FIRRMA implementing regulations here and here.

FIRRMA expanded the scope of transactions subject to CFIUS review and modernized the review process. FIRRMA also authorized CFIUS to collect filing fees up to the lesser of 1 percent of the value of a transaction or $300,000. The proposed rule establishes a fee structure intended, according to the Treasury Department, to “not discourage filings and…allow parties to continue the practice of determining whether to file a voluntary written notice based on an evaluation of the facts and circumstances of the transaction.” The fees were set to only be a small proportion of the value of any transaction, in order to avoid discouraging voluntary filings. Under the proposed fee structure, the required fees are in proportion to the value of the transaction, as follows:

The same fee structure applies to both foreign investments under Part 800 and real estate transactions under Part 802. Fee requirements are only in place for voluntary CFIUS notices, however, and there are no filing fees for declarations or for unilateral reviews of transactions self-initiated by CFIUS. Accordingly, parties for whom the filing fee would be particularly burdensome, or parties engaged in low-risk transactions, can take advantage of the mandatory or voluntary declarations authorized by CFIUS under Parts 800 and 802.

The proposed rule requires parties to pay the fee at the time a notice is filed, so parties must calculate the total value of a transaction prior to filing. To calculate the value of a transaction, parties should include “the total value of all consideration that has been or will be paid in the context of the transaction by or on behalf of the foreign person who is a party to the transaction, including cash, assets, shares or other ownership interests, debt forgiveness, services, or other in-kind consideration.” Because transactions often include consideration paid in securities or non-cash assets, the rule provides the following guidance:

-Value on national securities exchange: value is calculated based on the closing price on the national securities exchange on which the securities are primarily listed on the trading day immediately prior to the date the parties file a notice with CFIUS. If the security was not traded the day prior to the date of filing, then the last published closing price will apply.

-Non-cash assets, interests, or services or other in-kind consideration:  value is calculated based on the fair market value as of the date the parties file the notice.

-Lending transaction: value is calculated based on the cash value of the loan or other similar financing arrangement.

-Conversion of contingent equity interest previously acquired by a foreign person: value is calculated including the consideration that was paid by or on behalf of the foreign person to initially acquire the contingent equity interest in addition to any other consideration.

-Real estate leases: value is calculated by the sum of fixed payments to be paid by the foreign person over the term of the lease; variable payments that depend on an index or rate over the term of the lease, measured by using the index or rate as of the date of the filing of the notice; and any non-cash or in-kind consideration to be provided by the lessee to the lessor over the term of the lease, as reasonably determined as of the date of the notice.

In light of the calculation requirements, the proposed rule also adjusts the content requirements for joint voluntary notices, requiring parties to provide the value of the transaction and the methodology used to calculate the value, along with the applicable fee.

Because parties are required to pay applicable fees at the time the notice is filed, CFIUS is authorized to delay its review until and unless the fee has been paid. In general, CFIUS will not require parties to submit double payments if it requires parties to withdraw and re-file a notice, absent a material change to the transaction or a material inaccuracy or omission in the initial filing. The proposed rule also allows for fee refunds in certain limited circumstances.

CFIUS will refund the filing fee if it later determines that the notified transaction is not a covered transaction, and it may issue partial refunds if parties can demonstrate that they paid a higher filing fee than required by the tiered fee structure. Notably, CFIUS has not indicated that it will refund the filing fees if a transaction is blocked.  Although CFIUS is also authorized to waive fees, it may only do so under “extraordinary circumstances relating to national security,” and the proposed rule states that it anticipates infrequent partial or total waivers.

The proposed fee schedule has not yet gone into effect, and it will only apply after the Treasury Department publishes its final rule.  Interested parties have until April 8, 2020, to submit comments on the proposed rule. Specifically, the Treasury Department has solicited comments from the public “on the impact of the proposed tiered fixed-fee structure and whether additional tiers or additional features should be considered.”


By Ryan Fayhee, Roy (Ruoweng) Liu, Alan G. Kashdan, Tyler Grove and Sydney Stringer at Hughes Hubbard & Reed LLP

real estate

Global View of How the Coronavirus Affects Stock and Real Estate Markets

The coronavirus has already killed more than 3,000 people worldwide. Although most cases are concentrated in the Chinese city of Wuhan, the virus has left the country and has spread to up to 30 nations. On February 16, 2020, Kristalina Georgieva, managing director of the International Monetary Fund, warned that the growth of the world economy that is currently estimated at 3.3% for this year, could be cut between 0.1% and 0.2% due to the coronavirus.

The optimism at the beginning of the year for Asian markets has blurred in the shadow of the coronavirus epidemic.

In the medium term, so long as the epidemic is contained in the coming weeks, equity markets will probably rise again. This is partly because global growth should benefit from the delayed effect of the decline in fixed income yields and an improvement in the global industrial sector due to significant restitution of stocks.

Furthermore, uncertainty — an important risk aversion factor for investors — receded considerably with the truce in the commercial war and the adoption of an orderly Brexit, as investment firm Imperial Fund recently stated. There is confidence that the budgetary/credit stimuli in developed countries (mainly Europe) may continue with a change of stance of the German Government due to the pressure from recent external events.

China should also contribute its grain of sand. Its percentage of health spending remains much lower than that of developed countries, which will lead the Government to increase social spending and continue adding liquidity to support its economy.

Production chains are also much more interconnected, in a world that is still very globalized despite Donald Trump’s attempts to limit trade.

In the U.S., the favorable forecast of the economy persists despite some inconveniences derived from the potential spread of the disease and its effect in the manufacturing and services sector. The Fed made a mid-cycle adjustment before entering pause mode and there is some uncertainty about a possible increase in protectionism and fiscal regulation.

In essence (for now), there is no reason to panic. But, let’s face it, the market provides for a strengthening of corporate results, an increase in investment in capital goods and a greater willingness of investors to take risks. This is not really the intended scenario. At a minimum, we must protect ourselves against risk of an extended pandemic that affects the economy for a longer period than the planned months.

Does it affect the real estate market?

Yes. Housing is another sector that is affected by the coronavirus. For instance, in the first week of February alone, house sales plummeted 90% year-over-year in the 36 main Chinese cities and most real estate agencies are closed to the public. The price of housing in the country has registered the most moderate growth during the past year and a half.

The real estate industry in the U.S. has had to take its own challenges to keep the market moving as well. The presence of the coronavirus becomes a new hurdle to overcome within luxury real estate in cities like New York, Miami, and San Francisco.

The federal government suspended the entry of foreign citizens who have visited China in the last 14 days in an attempt to stop the spread of the virus, a situation that could affect the housing sector due to the blocking of access by potential investors.

Foreign entrepreneurs often get an idea of ​​their future homes with the offer presented on the internet; however, investors have less incentive to buy real estate if its uncertain he or she can visit the property. Therefore, in the short term, the virus could further reduce luxury sales. Time will tell.


Imperial Fund is a mortgage investment fund formed in 2014 and headquartered in Hollywood, FL. Imperial seeks to achieve attractive risk-adjusted returns by exploiting inefficiencies in the residential and commercial real estate lending market.