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 The Cal State Companies:  Center for Real Estate Studies ¨ Cal State Properties ¨ Cal State Investment LTD Partnership

 Web page calstatecompanies.com ¨  E-Mail  calstatecompanie@aol.com

Media Contact: The Center for RE Studies                       For: Immediate Release

 

Real Estate vs. the Inverted Yield Curve

        Los Angeles, CA. An inverted yield curve is an interest rate situation in which long-term debt instruments have a lower yield than short-term debt instruments of the same credit quality. This type of yield curve is the rarest of the three main curve types and is considered to be a forecaster of economic recession.

          A renewed center of attention on the yield curve inversion this week raised fears of an upcoming recession. On Wednesday, the S&P 500 declined 2.93%.The 10-year US Treasury yield fell below the 2-year yield for the first time in over a decade – a negative sign since yield curve inversions have occurred prior to each of the past recessions. In addition, the 30-year Treasury yield fell to a record low in a flight to safety, suggesting investors expect low rates to persist for an extended period. The price of gold, up 1% Wednesday and 18% for the year, is another sign of investor fear. Despite such indications of concern from the market, we only see a minor chance of a US recession in 2020.

          This may be a warning sign for recessions, but they are shocking as timing indicators for selling real estate investments. Unlike trade conflicts, an inverted yield curve by itself has limited economic impact. Instead, its signal about the health of the economy is what matters, and it is not as negative as some investors fear. Historically, there has been a long and variable lag between initial yield curve months for the last five recessions. Additionally, the length of time the yield curve is inverted, and by how much, matters. If Fed rate cuts successfully steepen the curve into positive territory, this brief curve inversion may be a premature recession signal. Neither does a yield curve inversion indicate it is time to sell real estate investments. Since 1975, after an inversion in the 2-year/10-year yield curve, real estate continued to rally.

          So hold on to your hat and try to enjoy the ride. Remember, one of the best lessons you can learn in life is to remain calm. Before you panic over the latest inverted yield curve story, keep in mind the Fed can lower interest rates any time they feel like it to  restore a rising yield curve, and that even telegraphing that they might do so in the future can impact the real estate markets. The Fed is very aware that a prolonged inverted yield curve won’t be interpreted as a healthy sign. They can drop rates almost instantly whenever the spirit moves them. However, predicting what they might do or when is a loser’s game. The only people who really know aren’t talking.

ABOUT THE AUTHOR: Eugene E. Vollucci,  is considered to be one of the foremost authorities on  taxation and real estate investing and has authored books in these fields published by John Wiley & Sons of New York. He is the Director of the Center for Real Estate Studies, a real estate research organization. To learn more about the Center, please visit our web site at http://www.calstatecompanies.com

UTUBE: https://youtu.be/868wrjNPQFM

              News

Center for Real Estate Studies ¨ Cal State Properties ¨ Cal State Investment LTD Partnership

E-Mail  CalStatecompanie@aol.com ¨ Webpage Calstatecompanies.com

Media Contact:  Center for RE Studies                         For: Immediate Release

                  

How Landlords Can Help Prevent

 Domestic Terrorism

          LOS ANGELES, CA. If you look back at where the majority of these domestic terrorists lived, you will find that many of them were renters.  Landlords, with the right training, could alert the authorities. How can they accomplish this?

Find the Right Property Management Company

          Landlords should use a property management company that only does property management. You will find companies that advertise that they do property management but also conduct real estate brokering activities These kinds of companies usually have a divided staff. Their efforts to be vigilant will be divided also. They might not keep an EYE OUT for suspicious activity or do proper background checks.

Procedure Manuals Are Critical

          Landlords searching for property management companies should ask to see their operations or procedure manual. Read it and ask questions. You will get a clear indication of how a property management company manages rental property from the manual. Be leery of the company that does not have one. In fact, do not consider using a company unless they have a formal plan. Probably one of the most important section in the manual is “how to screen tenants”. It should include procedures for indentifying and reporting suspicious individuals to the US government.

          The U.S. government  maintains a central database  the Terrorist Identities Datamart Environment (TIDE), that lists  known or suspected  domestic terrorists, and contains highly classified information provided by members of the Intelligence Community such as CIA, DIA, FBI, NSA, and many others.

          As of February 2017, there are 1.6 million names in TIDE.  In 2008, more than 27,000 names were removed from the list when it was determined they no longer met the criteria for inclusion. According to the FBI, terrorists include those persons who carry out terrorist activities. For this purpose, they may include U.S. persons (U.S. citizens and legal permanent residents). The Terrorist Identities Group (TIG), located in NCTC's Information Sharing & Knowledge Development Directorate (ISKD), is responsible for building and maintaining TIDE.^[3]

          From the classified TIDE database, an unclassified, but sensitive, extract is provided to the FBI's Terrorist Screening Center, which compiles the Terrorist Screening Database (TSDB).

          This database, in turn, is used to compile various watch lists such as the TSA's No Fly List, State Department's Consular Lookout and Support System, Homeland Security's Interagency Border Inspection System, and FBI's NCIC (National Crime Information Center) for state and local law enforcement.

What to Expect from Your Property Manager

Your role as a landlord is to monitor the property management company in order to establish effective policies and to make management decisions.

          What support should your property management company provide?  Ideally, they should be able to provide all services in the areas of acquisition, operation, and disposition of your property.

          A first-rate property management company should be able to give statistical, as well as subjective, information concerning socioeconomic, political, and developmental conditions. A quality firm should be capable of preparing physical inspection reports, capital improvement requirements, and an effective operations budget.

          During the operations phase, a competent property management company will issue timely monthly operating reports that compare actual income and expenses to budgets and report any suspicious activity.  Homeland Security and Preparedness has released a new document entitled “Terrorism Awareness and Prevention”.   The paper is aimed at raising awareness on how one can help combat terrorism, including tips on how to spot signs of suspicious activities and behaviors.

            Your property manager should have this plaque in the office. “If You See Something, Say Something”.   Those who become domestic terrorists do so because they feel as though they are not being heard; or they feel insignificant, or unimportant. Trained property managers can help in identifying domestic terrorists.

ABOUT THE AUTHOR: Eugene E. Vollucci,  is considered to be one of the foremost authorities on real estate taxation and real estate investing and has authored books in these fields published by John Wiley & Sons of New York. He is the Director of the Center for Real Estate Studies, a real estate research organization. To learn more about the Center for Real Estate Studies, please visit our web site at http://www.calstatecompanies.com

UTUBE: https://youtu.be/868wrjNPQFM