Real Estate Without Borders – Episode Summary
Episode: Global capital flows & the importance of skilled operators - ft. Ian Colville of Carpathian Capital Management
Date: October 1, 2025
Guest: Ian Colville, Managing Partner at Carpathian Capital Management
Host: Dan (without co-host Dave Hutchinson)
Overview
This episode explores the complexities of global capital flows in real estate, with a distinct focus on U.S. market dynamics and the vital role of skilled local operators. Ian Colville shares his unique perspective as a U.S.-based manager with extensive experience in the former Soviet Union, detailing the reasons why foreign investors choose U.S. real estate, the hurdles they face, and how investment structures can mitigate taxation. The discussion further branches into differences in homeownership culture, housing shortages, taxation, and the nuances of capital market structures in the U.S. relative to other countries.
Key Topics & Discussion Points
1. Ian Colville’s Background & Carpathian Capital’s Focus
Timestamp: 00:26–02:07
- Ian’s firm manages ~$150M in U.S. real estate, spanning several states
- Core focus: housing—owning rental homes, private lending to builders, and equity investments in developments (e.g., large communities in Atlanta, townhomes in Ohio, senior living in Minnesota)
- Significant experience with foreign investors, drawn from Ian’s background in Russia and Ukraine as an investment banker
- Emphasis on housing shortage as an investable theme
Notable Quote:
“Everything we do is focused on housing, the idea of a housing shortage.” — Ian Colville, 01:35
2. The Challenge of Direct Investment & Importance of Operator Expertise
Timestamp: 02:07–03:28
- Both host and guest agree: Direct investment in real estate is extremely difficult for foreign investors
- Local expertise, connections, and market knowledge are essential for accessing deals and managing properties
- U.S. tax system poses additional complexity for foreigners
- Skilled operators like Carpathian Capital bridge these gaps, justifying why foreigners prefer to invest via funds or partnerships rather than buying directly
Notable Quote:
“As soon as you do anything in the US, you’ve touched the US tax system... it’s opaque and messy from a foreigner’s perspective.” — Ian Colville, 03:04
3. Housing Shortage and the ‘Missing Middle’
Timestamp: 05:06–07:47
- Discussion about structural housing shortages in the U.S. and other developed economies due to shifting demographics and immigration
- Exploration of the “missing middle” concept (housing types between single-family homes and dense apartments)
- Minneapolis cited as a leader in allowing zoning changes (ADUs, four-plexes, etc.), fostering more diverse housing supply
- Carpathian primarily focuses on single-family and small multi-unit, with some multi-family/apartment projects as exceptions
4. Lending Approach: Serving Small and Mid-sized Builders
Timestamp: 07:47–09:37
- Carpathian fills a gap left by banks who are more risk-averse post-financial crisis
- Faster, more flexible funding; often no personal guarantees required for larger borrowers, contrasting with traditional banks
- Their value proposition is speed, flexibility, and structure to meet builder needs
Notable Quote:
“We can close on something within a week or two and sometimes that matters quite a bit...” — Ian Colville, 09:02
5. U.S. vs. Foreign Real Estate Markets: Debt, Culture, and Property Rights
Timestamp: 09:49–13:54
- Unique aspects of U.S. housing: stick-built (wood frame) homes vs. concrete/brick in Europe/Eurasia
- 30-year fixed-rate mortgage in the U.S. is a global anomaly—most countries have floating rates or short-term fixed periods
- The U.S. mortgage system (Fannie/Freddie) enables homeownership, liquidity, flexibility, but can also create systemic risks (e.g., housing crisis)
- Cultural differences in homeownership: U.S. “American Dream” vs. “stability” in Russia/China due to privatization and history
- Former Soviet states have high homeownership due to state asset transfers, not market dynamics
Notable Quotes:
“Foreigners call our houses cardboard boxes and expect them to fall over.” — Ian Colville, 11:10
“One of the biggest weird things about the US market is the existence of a fixed 30-year mortgage…” — Ian Colville, 11:51
6. Homeownership, Property Taxes, and Market Liquidity
Timestamp: 13:54–19:07
- Contrasts in motivation: American homeownership as wealth-building and freedom; in Russia/China as stability
- High U.S. property taxes force liquidity and “highest and best use” of property, increasing transaction volume
- This constant churn fuels a large ancillary economy (realtors, renovations), which in countries like Canada and Australia can create vulnerabilities
7. Real Estate as an Inflation Hedge
Timestamp: 20:09–22:24
- Real estate generally outperforms stocks/bonds during inflationary periods, offering a hedge over the long term
- Not always true in short-term or local contexts, but hard assets retain value when inflation erodes currency or savings
- Host and guest agree that buying real estate “time capsules” input costs, aiding as an inflation buffer
Notable Quote:
“If you’re supposed to be leaving cash in the bank, you’ll have a better return on your money if it’s sitting in real estate…” — Ian Colville, 21:12
8. U.S. Capital Markets, Securitization, and Government Guarantees
Timestamp: 22:24–24:46
- Unique U.S. system: Fannie Mae and Freddie Mac buy conforming mortgages, provide guarantees, and keep mortgage rates low
- Government backstops create a perception of additional safety, making U.S. mortgage-backed securities attractive to investors
- Privatization proposals (e.g., spinning off Fannie/Freddie) raise concerns about increased risk and higher mortgage rates
Notable Quote:
“If you IPO these entities, that makes them more independent from the government… and therefore it’s riskier to own U.S. mortgages.” — Ian Colville, 24:21
9. Structuring Foreign Investment to Minimize U.S. Taxes
Timestamp: 25:11–29:23
- Carpathian sometimes uses British Virgin Islands (BVI) entities to structure foreign investment, routing capital via BVI into the U.S.
- Portfolio Interest Exemption: Allows foreigners to lend money to U.S. companies and receive interest with no U.S. taxes or filing requirements (so long as they’re not significant stakeholders)
- Equity investment is more complex: tax shields, depreciation, and other advantages often require expertise and scale
- Such structures are typically only worthwhile for larger investments due to cost and complexity
Notable Quote:
“Foreigners can lend money to US companies and not pay any taxes on the interest… That’s a big deal.” — Ian Colville, 25:45
10. Closing Thoughts & Where to Find Ian
Timestamp: 29:32–30:13
- Ian invites listeners to learn more or get in touch at carpathiancapital.com
- Open to future appearances and deeper dives into U.S. and international real estate structures
Memorable Moments & Quotes
- “This is such an interesting topic… Russians generally will view like anything that provides stability as a valuable thing. And real estate throughout all of that was something that was stable.” — Ian Colville, 15:55
- “You can’t always hold on to an asset… that adds liquidity to the market. That’s different from Russia.” — Ian Colville, 18:09
- “If people want to get in touch… Carpathian, like the mountain range in eastern Europe—carpathiancapital.com.” — Ian Colville, 29:32
- “I think the rate [of homeownership] is very different than the culture piece… it’s just a place to live.” — Dan, 14:17
Recommended Listening Segments
- On U.S. market differences: [09:49–13:54]
- Foreign capital, taxation, and structures: [25:11–29:23]
- Inflation hedging & investment strategies: [20:09–22:24]
Overall Tone
Engaging, nuanced, and analytical. The conversation is a blend of practical investor insight with macro-level economic and cultural context, delivered candidly and with a conversational flow. Both Ian and Dan use real-world examples, market anecdotes, and personal experience to illustrate complex topics in international real estate investment.
For More Information
Visit carpathiancapital.com or reach out to Ian Colville for direct inquiries on investment opportunities and fund structures.
End of Summary