Carnegie Capital Investments is a limited partnership founded in 2011. California has granted us great
experience in the up and down markets. Our clients are confident that they are being represented
and supported by a great professional staff with vast expertise in financial, legal and administrative
matters, and experts that bring significant professional knowledge and experience to the table. This
certainly gives investors an edge in negotiating power and in the end, a maximum end result benefits
from the transaction.
We specialize in helping potential clients finding the investment opportunity they are
looking for, as well as to best fit their level of investment, liquidity requirements, investment
experience, liquid reserves, etc.
As part of the services we provide to our clients, we enlist the following:
• Analysis of potential investments in terms of ROI, Cash flow, Cash on Cash, Rent increases
potential. Good rental location. All these, with the purpose of identifying the properties that
make more sense and would bring the most end benefit results.
• Education of investors about Buyer Agency, outlining our fiduciary responsibilities towards
them, which include: complete disclosure, loyalty, confidentiality, obedience and accountability.
• Saving time by regularly searching the market for an affordable investment that meets the
clients’ criteria and expectations.
• Reports of specific property requirements to top producing agents in the area so they know we
have a qualified investor.
• Guided reports of properties to provide comparative analysis. When
required, referring to expert home inspectors to provide more in-depth analysis and advice to
avoid any risk in the acquisition.
• Help exploring the different financing options and, if required, reference to mortgage professionals.
• Professional consultation in connection with a written offer to purchase a property including the
applicable legal and technical terms and conditions.
• Negotiation of the best possible price and terms for our clients, taking care of all the
Up to now, Carnegie Capital LP has mostly focused on local clients residing in Southern California
area. The growing globalization of our economy and the tremendous influence of the Hispanic population in the U.S economy (especially in the Southern States, known as the Sunbelt) has
sparked our intention to focus on the huge potential market appertaining investors from South of our
In the past few years, American Real Estate has become very attractive to foreign investors who are
pouring huge amounts of money into properties.
American Real Estate presents several advantages for the Mexican investors in terms of protecting
and increasing their worth; the following are some of (not limited to) the potential advantages:
• Protection against currency fluctuations and devaluations
• Liquidity in the American Real Estate Market compared to the Mexican alternative (a property
in the USA will take an average of 1 to 3 months
As established by the Public Policy Institute of California, the greatest challenge facing Mexican
policy- makers is to establish a growth path for Mexico that will enable it to become more similar to
advanced industrial nations in its institutions, economic structure, income, and quality of life.
Economic integration with more advanced countries is essential if Mexico is to accomplish this goal.
California, with its large population of Mexican origin, its web of trade and investment relationships
with Mexico, and its potential as a major consumer market for Mexican goods, is already playing an
important role in this economic integration.
In The Emerging Integration of the California-Mexico Economies, authors Howard Shatz and Luis
Felipe López-Calva examine the many ways in which California and Mexico are integrating, focusing
in particular on trade and foreign direct investment (FDI), and they suggest a number of policies that
can facilitate that integration. They point out, however, that Mexico is still trying to unwind from old
political structures and ways of doing business and that a yawning gap lies between that country and
the more advanced economies of the world.
The U.S. and Mexican economies have integrated a great deal since the 1980s and especially since
the 1994 North American Free Trade Agreement (NAFTA) was signed. Trade between California and
Mexico increased dramatically during the 1990s. Some of it was pass-through trade: Goods were
produced elsewhere in the United States and shipped to Mexico through California’s ports or border
crossings, or goods were shipped from Mexico through California’s ports or border crossings and
then sent to other destinations in the United States. Much of the increase, however, can be traced
back to California producers in the case of exports and California buyers in the case of imports.
Trade links between Mexico and California are deep, in the sense that the total value of traded goods
is high, and broad, in the sense that many different types of goods are traded. Exports to Mexico of
goods originating in California grew an average of 12.8 percent annually between 1988 and 2002.
This was a quicker pace than the growth of exports originating in California to the rest of the world
and exports originating in the rest of the United States to Mexico. During these years, Mexico moved up from the third largest destination for California exports to the largest, in 1999. In 2002, Mexico
received 17.4 percent of all California exports, almost $16.1 billion.
The majority of California’s exports to Mexico consist of two broad commodity classes—machinery,
and electrical machinery and equipment. However, California exports to Mexico are more diverse
across product classes than California exports to the rest of the world. In addition, they embody less
skill than do California exports to the rest of the world, implying that trade with Mexico has provided
greater opportunity to production workers—as opposed to executives, administrative assistants, and
marketers—than has trade with the rest of the world. Between 2000 and 2002, more than 200,000
California workers each year produced exports to Mexico—17 percent of all export-related jobs in the
Although export levels are high, their destinations are concentrated. More than three-quarters of all
California- origin exports are shipped to border states, with the vast majority going to Baja California.
Just as exports from California to Mexico have grown dramatically, so have imports from Mexico to
California. Imports from Mexico by California-based importers more than doubled between 1995 and
2002, from $9.1 billion to $20.3 billion.
A large part of California-Mexico trade is two-way trade within the same commodity class. This
suggests extensive production sharing, in which components are made in California, assembled or
further processed in Mexico, and then shipped back to California. Top commodities for this type of
trade include machinery, vehicles, instruments, and electric and electronic equipment.
The main driver of global integration in recent years has been the spread of multinational firms
through foreign direct investment (FDI)—cross- border investment used to establish or control a
business. Available data suggests a large increase in Mexican investment in California in recent
years. California investment in Mexico has remained more level.
As with trade, FDI between California and Mexico is in large part a border story, especially from the
perspective of Mexican investors. More than 72 percent of Mexican- owned subsidiaries in California
are located in Imperial and San Diego Counties, and more than 47 percent of California- owned
subsidiaries in Mexico are located in the border states of Baja California, Chihuahua, Nuevo Leon,
Sonora, and Tamaulipas. More than three-quarters of these are located in Baja California.
The situation is similar regarding parent companies— the companies that own the subsidiaries in
California or Mexico. Most Mexican parents are on the border, and nearly all of those border
companies are in Baja California. California parents are less concentrated, but slightly more than a
quarter is in the border counties of Imperial and San Diego. Almost 41 percent are in the South Coast
counties of Orange, Los Angeles, and Ventura, and another quarter are in the Bay Area.
Many Mexican-owned subsidiaries in California are in wholesale and retail trade, 15 percent are in
manufacturing, and 7 percent are in finance. In contrast, 55 percent of California-owned subsidiaries
in Mexico are in the manufacturing sector.
California faces a number of options in its policy stance toward economic integration with Mexico.
First, it must decide whether it even wants closer economic integration. If it does, three policy
positions are possible. One position would be to focus on border infrastructure and environment but
otherwise let private businesses develop relationships on their own. A second position would be for
the state to provide development assistance to Mexico. And a third would be to work with the
Mexican and U.S. governments in developing more active policies to increase economic integration,
including setting up institutions to encourage more two-way trade and investment.
Whatever route the state chooses, devoting more attention to the border area is a worthwhile starting
point, because the infrastructure of this region is so strongly affected by—and so strongly affects—
the economic interaction of California and Mexico.
Prices are continuing to rise on home sales in Southern California like elsewhere through much of
the country, with the typical real estate agent seeing fewer buyers. What this means for the average
home buyer is less affordability. While that’s not good news for the typical family looking to move
from renting to buying, it is a positive turn for investors. At the same time, commercial real estate
provides options for investors who want to enter the market or add to their portfolios.
Read any news report and you’ll notice that first-time buyers are struggling to afford housing in
Southern California. The median first-time buyer in this area would have to spend 88 percent of their
income on a home. Since this is impractical, it demonstrates the lack of options for the demographic.
How does this impact on investors? With fewer buyers driving the market up further, expectations are
growing that the prices will actually have to come down. As investors watch the housing market, they
can capitalize on those properties.
Some investors are focusing on flipping properties. We have discovered that several neighborhoods
in the country offering the best market for flipping houses were located within San Diego area.
Investors can locate older homes in need of improvement and make enough updates and repairs to
warrant a high price at resale. They are grabbing these undesirable properties because of the
potential they see in them.
Flippers can do extensive remodeling and still walk away with massive profits. With interest rates
remaining low for mortgages, investors with the cash for a down payment and the affordability to
make the payments and pay for renovations will still see income potential in the increasingly
expensive Southern California market.
Investors not interested in single-family dwellings for flipping can still find lucrative opportunities in
commercial properties. If they talk to a real estate agent in San Diego, they will discover that multifamily
dwellings have a vacancy rate of just 3.3 percent, which means new developments will be in
According to the National Association of Realtors, industrial properties have the second lowest
vacancy rate at 3.4 percent and retail has a rate of 4.6 percent. Both of these real estate
subcategories offer potential for investors who are looking for a sound investment. An experienced
real estate agent can provide guidance as to where the best possibilities for future developments
However, the focus for investors today is in rentals rather than flipping. New construction is still low,
which is a prime area for investors who want to take advantage of the economy. Since many buyers
are looking to move to another rental instead of purchasing a home of their own, they will be looking
at new-builds with more amenities and space than their current units. Investors will have no problem
filling properties with tenants if they should choose this avenue.
Demand for housing will continue to increase as more people seek rentals in Southern California.
Mexicans largely drive this growth among other minorities.
In addition to the lack of sufficient housing, the improving job market and income growth is helping
propel multi-family housing forward. For non-residential real estate, technology companies are
driving the demand for new structures. Office space is continually needed, which is the primary focus
for many developments in the area.
The story for investors who are looking at Southern California real estate to add to their portfolio is
the opportunities are still here. However, they are going to have to do plenty of research to discover
the right areas to place their funds, not only in the type of real estate for investing but in the right
location with continued potential for profit.
As for rentals, we are of the opinion that it might be a great option in the future of California real
estate. California’s homeownership rate averaged 53.8% in 2016, continuing its downward trend
from when it was at its highest in 2006, at 60.7%. Expect California’s homeownership rate to remain
around 54% for the next decade.
Fewer homeowners mean more renters. Is rental construction rising to meet today’s growing renter
Not quickly enough — the state’s rental vacancy rate also continues to fall, decreasing to 3.6% in
2016. This is well below the historical equilibrium of 5.5%. The low rental vacancy rate has
contributed to quickly rising rents across the state. If the rent jump is going to end soon, multi-family
construction needs to rise to meet demand.
California’s homeownership rate demonstrated an upward trend from the 1970s until peaking in
2006. This long-term increase and the following crash were due to a variety of economic factors.
During the past 30 years, interest rates were in a continual state of decline, reaching their all-time low
today. Over the next 25 years or so, interest rates will rise, inhibiting homeownership growth.
Some are of the opinion that the Fed intentionally raises short-term interest rates to induce a
business recession when the economy is over performing. The effects usually take hold in two to
three years. More precisely, the recession sets in around 12 months after short-term rates rise above
long-term rates. This cyclical action has occurred periodically since WWII, until the early 2000s, when
the Fed skipped the second phase of this action due to the events of September 11.
Just as the recession’s magic was removing inefficiencies in the economy, fiscal and monetary
moves post-9/11 led directly to the Millennium Boom. In the boom, as aided and abetted by financial
deregulation, low-tier home prices were artificially driven to a three-fold high. A new real estate
paradigm was prematurely declared in which prices would go up and up forever, in defiance of
economic principles. Bond rating agencies, properly induced by Wall Street Bankers, fully endorsed
the concept. Of course, this false paradigm came crashing down in 2007, which resulted in the most
significant U.S. recession since the Great Depression.
According with the California Employment Development Department (Labor Market Information
Division), California employment has surpassed the number of jobs held prior to the Great Recession
— 15.7 million — reaching over 16.6 million jobs as of March 2017. Job numbers in March increased
from the prior month and showed a year-over-year increase of 368,500 jobs. In terms of employment,
we are continuing a strong period of economic expansion.
Demand for all types of real estate increases with the number of local jobs, as during periods of
economic development or boom. Additions to the local labor force tend to drive rents and prices up
on properties in the vicinity and results in local construction of homes and apartments.
To get an idea of the type of job growth we can expect in the coming years, here is a projection by
California’s Employment Development Department on the percentage of growth to take place
Mining and logging 10.4%
Wholesale trade 25.8%
Retail trade 22%
Transportation and warehousing 18%
Finance and insurance 16%
Real estate and rental and leasing 10.7%
Professional, scientific and technical services 25.6%
Management of companies and enterprises 4.7%
Administrative and support and waste management 24.9%
Educational services (private) 28.8%
Health care and social assistance 24.9%
Arts, entertainment and recreation 15.3%
Accommodation and food services 27.5%
Other services 13.7%
Federal government -13.7%
State and local government 6.3%
Mexicans Prefer The United States For Residential Real Estate Purchases
Mexico ranked third, after Canada and China, in international purchases of U.S. residential real
estate in the year through March 2013, according to the National Association of Realtors (NAR). The
NAR’s analysis of data gathered from realtors, reports that nearly 50% of purchases by Mexicans in
the U.S. were in suburban areas and about 30% in resort areas. The vast majority, 91%, were
residential purchases of detached single-family homes. The average price was $156,250 and 48% of
the purchases were made with cash. California and Texas accounted for 62% of all Mexican
purchases; San Diego, El Paso, Laredo, San Antonio, and Las Vegas, were Mexican buyers'
The United States' proximity and security are the most attractive features for Mexicans when it
comes to buying residential real estate. Mexico has a large number of declared millionaires. At the
end of 2012, there were approximately 145,000 individuals with $1 million USD or more in assets,
whose total combined wealth was $736 billion, which equals to 43% of total individual wealth held in
In the 12-month period ending March 2013, five countries accounted for the bulk of the international
purchases: Canada (23%), China (12%) and Mexico (8%), followed by India and the United
Kingdom, with 5% each. In 2007, Mexico was leading international purchases, accounting for 13% of
all, but the increase in real estate prices and the weakening of the Mexican peso against the dollar,
plus the strength of the Chinese Yuan, contributed to Mexico dropping to the actual third place.
International buyers fall into two different categories. The first are foreign citizens with permanent
residence outside the U.S. These people typically purchase property for investments, vacations, or
visits to the U.S. The second category is recent or temporary visa holders. For the 12 months
covered in the NAR’s report, the total sales volume to international clients is estimated at $68.2
billion, 6.3% of the total homes sales market of $1.08 trillion for the same period. The main factors
influencing the decision to purchase in the U.S. are profitability and security.
The types of homes purchased by international buyers are different from homes purchased by
domestic buyers. The international non-resident is likely to be substantially wealthier than the
average domestic buyer and may be looking for a trophy property. They are more affluent than most
buyers, looking for properties in specialized niches, such as a large estate suitable for multi generational living, or a property that establishes the individual’s presence and standing in the
While the local news has focused on Mexicans crossing the border into the United States, there is
also a silent, growing southern migration going on.
Much of it is due to Mexican politicians - and the inflated cost of living north of the border. Americans
are finding that they can, in effect, own Mexican real estate protected by U.S.-type title insurance and
purchased using U.S.-type financing. For some time now, Mexican politicians have been crafting and
approving legislation specifically designed to attract foreign investment. By any measure, the strategy
The Baja California peninsula is a good example. Actually two states - Baja California and Baja
California Sur - the north is famous for rowdy Tijuana nightclubs and the south for spectacular Cabo
sport fishing. But in the middle, Mexicans are managing a sophisticated tourism industry around ecofriendly
whale watching. Tourists from all over the work flock every year like the swallows to
Capistrano to see Greys, Blues, Humpbacks, Finbacks, Orcas and Sperm whales from rented
pangas, dive boats, kayaks and airplanes. Predictably, many learn that they can relinquish their title
as "tourist" and instead watch the whales from their own front porch. Finding both a fantastic lifestyle
and also a safe and inexpensive investment, they buy. It's no wonder that in this interconnected
world of ours, family, friends, friends' friends and co-workers' friends and so on hear firsthand that
Mexico is where an increasing number of Americans love to call home.
Places like Cabo San Lucas, San Miguel de Allende, Oaxaca City and Puerto Vallarta have long
been bursting at the seams with expatriates who embrace living a Hemmingway-like lifestyle where
you can fish for your own dinner, hear the mission bell toll from your bedroom window or see stars
fall out of the sky nearly every night of the year just by tilting your head up. Now, lesser-known places
like Todos Santos, Valle de Bravo, Merida and Chetumal are being noticed, not as tourist
destinations so much as sound locations to invest in a second home, or as ideal places to retire. Still,
critical components of the real estate purchase process that U.S. consumers have come to expect
are missing in Mexico.
In the United States, if you want to buy a home 1,000 miles away, you can easily do your homework
using the Internet. Learning about local events, schools and weather patterns while browsing for a
home to buy is easy. Then, when you've narrowed the decision of where to buy, the agent selling
your home can work with other agents to find the best home to move to and cooperate in the closing
of escrow. Not so if you're moving to Mexico. Typically, agents don't know each other's laws,
customs or languages. Moreover, the Internet is all but useless in doing meaningful research about
Mexican residential properties, commercial real estate or businesses.
Our company is willing to change this. We want to provide homebuyers both sides of the border, a
reliable and smooth buying experience. Investing in Real Estate is a major decision, so our primary
goal is to take our clients through the property finding and investment evaluation process, making it
as efficient, stress-free and profitable as possible.
We have put together a Real Estate Investment Guide to help our clients to understand the process
of finding and buying Real Estate property in the United States and Mexico, and to understand the
different kinds of Real Estate investments and financing choices that are available and assist them
throughout the investment process.
Our goal is to make sure our clients look back and see the transaction as a delightful and profitable
Why do we need a Mexican Expert in Tax Law with ties to both Countries?
We have identified the need to provide the Mexican investors with a complete certainty, close and
direct communication in their language and full knowledge of the following:
• Tax implications when investing their money in the United States.
• Historic behavior of currency fluctuations and how they impact long term investments.
• Comparative analysis of the Real Estate market liquidity in both countries.
• The huge advantages of using leverage to expand investment capability.
• The big difference in legal and system protection that the USA offers to Real Estate Owners.
• Establishing a corporate entity for asset protection and as a fiscal advantage.
• Refinancing, cross-colaterization and Cash-out, financing terms non-existent in Mexico.
• Privacy and discretion.
• Amortization and tax strategies involving the US and Mexico.
• Asset protection in US
• Estate planning in US
• Mexican tax law advice from a recognized expert.
Peace of mind
A profitable, safe and crystal clear management of your investment is what we promise you. Our books are always open and available to our customers.
2281 Green River Dr., 2281 Green River Dr, Chula Vista, CA 91915, US
Monday - Friday: 9am - 5pm
Saturday: By appointment