This Letter of Intent involves
Title: Enters Letter of Intent to Acquire Hospitality Assets
May 6, 2013, 4:00 p.m. ET
Inspired Builders Announces Intent to Convert to Real Estate Investment Trust Status
Enters Letter of Intent to Acquire Hospitality Assets
SANTA MONICA, CA--(Marketwired - May 6, 2013) - Inspired Builders, Inc. (OTCBB: ISRB) ("Inspired" or the "Company") has announced today that its board of directors has determined that the Company will elect to be treated as a real estate investment trust, or REIT. A REIT is a company that owns, and in most cases, operates income-producing real estate, or engages in financing real estate.
REIT status has many attractive attributes for our shareholders, including no corporate level federal income tax, annual distribution of at least 90% of its otherwise taxable income, and easier reporting to shareholders (Form 1099 versus Schedule K-1). Publicly traded REITs offer other distinct advantages for investors: portfolio diversification, dividend income, public liquidity, long-term performance and transparency.
The Company has also announced today the execution of a letter of intent for the acquisition of an interest in real estate assets in the hospitality sector. The hotels are located in Miami and Los Angeles.
"We believe the combination of a tax efficient corporate structure, a yield-generating equity security, and an investment in a resurgent hospitality market in the United States, is a favorable development for Inspired Builders shareholders," said Matt Nordgren, CEO of Inspired.
The letter of intent sets forth the preliminary agreement of the parties, and is subject to certain closing conditions. The transaction is a stock for stock acquisition, so there are no financing contingencies. Disclosures will be made with the SEC on Form 8K when the definitive agreements are executed.
In addition to the hospitality investments, Inspired will continue its existing real estate construction business.
Congress created REITs in 1960 to make investments in large-scale, income-producing real estate accessible to average investors. Congress determined that a way for average investors to invest in large-scale commercial properties was the same way they invest in other industries -- through the purchase of