 REITs (by Nicole [PA]) Mar 22, 2024 9:07 AM
 REITs (by Jason [PA]) Mar 22, 2024 9:28 AM
REITs (by Just Tim [AR]) Mar 22, 2024 9:45 AM
REITs (by RB [TN]) Mar 22, 2024 10:13 AM
REITs (by plenty [MO]) Mar 22, 2024 10:50 AM
REITs (by NE [PA]) Mar 22, 2024 10:53 AM
REITs (by Oregon Woodsmoke [ID]) Mar 22, 2024 1:21 PM
REITs (by Pmh [TX]) Mar 22, 2024 1:37 PM
REITs (by Wilma [PA]) Mar 22, 2024 2:12 PM
REITs (by 6x6 [TN]) Mar 22, 2024 2:14 PM
REITs (by Hoosier [IN]) Mar 22, 2024 2:20 PM
REITs (by Larry [MN]) Mar 22, 2024 6:21 PM
REITs (by Robert J [CA]) Mar 22, 2024 9:40 PM
REITs (by Deanna [TX]) Mar 22, 2024 11:15 PM
REITs (by T [IN]) Mar 23, 2024 7:02 AM
REITs (by Ray-N-Pa [PA]) Mar 24, 2024 8:58 PM
REITs (by Nicole [PA]) Mar 24, 2024 11:38 PM
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REITs (by Nicole [PA]) Posted on: Mar 22, 2024 9:07 AM
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Any general thoughts or advice on these ? I get offerings and have for years ignored them. As I am getting older I am looking at other ways of investing.
The newest one inundating me with information offers 12% annual distribution paid out monthly AND then they anticipate selling in 2-3 years boosting that number to an anticipated 20%, along with return of your investment capital at that time. These are for hotels. I certainly know and understand there is no guarantee. Their offering circular is 165 pages of fine print !!
Good ... bad...? I've got zero experience in anything like this so any thoughts, either way, are welcome --98.237.xxx.xx |
REITs (by Jason [PA]) Posted on: Mar 22, 2024 9:28 AM
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Yeah there's all kinds of different riots out there and I'm glad you brought this up because if you really own a rental property long enough where you pay it off or even just pay it down and it's worth a lot sometimes it actually can earn more money to buy a riot And then on top of that you don't have any liability you can't get sued it's truly passive It's that I look at have have a growth per year And they also have a nice dividend which is nice And last I knew dividends were taxed a little easier for Many of us then regular income. I'm glad I'm glad you brought --71.207.xx.xx |
REITs (by Just Tim [AR]) Posted on: Mar 22, 2024 9:45 AM
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Is it a REIT structure or a LLC/LP structure? Either way, it is a private placement and you need to make sure you understand everything about the deal. Dig into the assumptions and see if they seem realistic. Verify everything you can - don't just blindly believe what they tell you.
How many assets are in the deal?
Is the sponsor or leadership of the company contributing any of their own money?
What happens if the project needs more money - are you required to contribute more? If you don't is it simple dilution or is it punitive dilution?
You also need to understand the sponsors backgrounds and make sure they are someone you trust with your money and who has proven they can execute this project.
I have started investing more passively as well - syndications and public REITs. I'm not planning to sell out now, but I've got about the right number of rental units to own for me. --98.174.xxx.xxx |
REITs (by RB [TN]) Posted on: Mar 22, 2024 10:13 AM
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"165 pages of fine print".
What could possibly happen ? --69.130.xxx.xxx |
REITs (by plenty [MO]) Posted on: Mar 22, 2024 10:50 AM
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Are you sure you can't be sue? --172.59.xxx.xx |
REITs (by NE [PA]) Posted on: Mar 22, 2024 10:53 AM
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RB, that’s what I was thinking. If I can’t explain it to my wife and kids at dinner, I don’t think I’m interested. --174.249.xx.xx |
REITs (by Oregon Woodsmoke [ID]) Posted on: Mar 22, 2024 1:21 PM
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12% a year boosted to 20% a year (promised), and that sounds awfully optimistic. I have to feel cautious if I think anyone is appealing to my greedy bone.
Do they have to offer 20% before investors are interested?
I always thought the motel business was a bit iffy and all the motels in my area are having a lack-of-labor problem.
I had an uncle who made a lot of money with a motel. He made the money by selling it over and over and taking it back when the buyer couldn't make the payments. Located in Reno and if a motel can't make it in Reno, then a motel can be really hard to stay profitable. And by the way, to start, he got the motel by foreclosing on it for a bad loan that he had made. --76.178.xxx.xxx |
REITs (by Pmh [TX]) Posted on: Mar 22, 2024 1:37 PM
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Nicole: those “distributions” may include return of your investment. I am in hotel business. those hotel reits you see advertised on FB are not what you want to get sucked into. There are different reits so drill down on what they invest in. I will suggest you buy into mutual funds which hold reits rather than the reits themselves if you want to invest in reits. hotels by themselves are very risky. --12.232.xxx.xx |
REITs (by Wilma [PA]) Posted on: Mar 22, 2024 2:12 PM
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We have some $ invested in Vanguard's REIT mutual fund. Over 10 years, we gained about 6.1%. Not fabulous, but calm and steady. --96.245.xx.xxx |
REITs (by 6x6 [TN]) Posted on: Mar 22, 2024 2:14 PM
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".....inundating me with information offers..."
That might be reason enough to stay away. Why the big sales pitch? Why do they have to sell it so heavily if it is a good deal? --76.129.xxx.xx |
REITs (by Hoosier [IN]) Posted on: Mar 22, 2024 2:20 PM
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REITs are ok in and of themselves...but the statement of "12% distributions" annually is concerning. The word "distribution" does not mean interest or dividend...part of that will be a return of your capital! Very misleading.
Morninstar is a reputable source and shows the following as some potential good REITs
HLT
VTR
MAC
UNIT
PK
Holding these in a taxable account will make you responsible for annual payment of taxes on any dividends/earnings. --64.38.xxx.xxx |
REITs (by Larry [MN]) Posted on: Mar 22, 2024 6:21 PM
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I wouldn't invest in anything associated with office space. That sector is still declining. Lots of long term leases coming due that no one wants. Office properties are declining in value overall. --65.158.xxx.xxx |
REITs (by Robert J [CA]) Posted on: Mar 22, 2024 9:40 PM
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20% of all REITs have a crooked Sponsor who says they will continue to hold 1 spot of ownership. All BS. They will sell their "spot" for $10,000 in retirement funds, divesting themself of any ownership. And when the found the property, do a lengthy investigation. They purchased it under another LLC, to temp tenants to pay over market rents, they buy it under the LLC they operate under as the sponsor. You can loose your shirt since now is coming a correction and property, commercial will tank. --47.155.xx.x |
REITs (by Deanna [TX]) Posted on: Mar 22, 2024 11:15 PM
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The people who are allowed to invest in real estate crowdfunding fall under two categories: accredited investors and non accredited investors.
To be an accredited investor, you must have shown an annual income of $200k ($300k if married filing jointly) for the last two years, and have the expectation of the same or a greater income this year. Or, you need to show a net worth exceeding $1M. Those sorts of people have more flexibility/greater investment opportunities. The non accredited investors have fewer opportunities and are more limited in what they're allowed to do.
Within real estate crowdfunding, you often have two different ways of investing in their projects: either invest in their debt, or invest in their equity.
If you choose to invest in equity, you become a shareholder in a property. You get a share of the income it generates (minus fees), and if it gets sold, you get your cut of the profits. The plus is that there's no cap on your returns, plus other things, like being able to take your share of deductions on your taxes, and the fees are generally lower, blah blah blah. The risk, of course, is the usual risk that comes with the territory of owning real estate directly. If it doesn't live up to expectations-- if it has prolonged vacancy-- etc, etc, etc. You're not the first-in-line for being paid back. And in general, your money is tied up for a longer period of time (3 years? 5 years? 10 years?) than if you were investing in debt (3 months? 6 months? 1 year?).
If you choose to invest in debt, then that's a different kind of project. Since you're acting as a lender, you get a fixed rate of return on your investment dollars. Since it's usually associated with development projects that are being flipped to investors, and you're financing the development, you usually get paid off in a short period of time. (Presuming the development is completed and flipped as planned.) There's also higher fees than with the equity type of investment, and those come off the top before you get your payment. The risk is lower, so the return is lower. And if they pay you back ahead of schedule-- you lose out on a lot of payments you were counting on.
As people have gained more experience with this, I've noticed that they recommend looking at what the cost of entry is. Suppose they need $1M for their project, so they get 10 equity investors who each put up $100K. That's solid. But suppose someone is tired of their $100K being tied up in a project that's only earning x%, and they have a better investment opportunity. Suppose the rules require you to keep your funds in place for 5 years before you're able to withdraw them without penalty, and the 5 years is up. Suppose five people pull their $100K out... and the company needs to come up with $500K to pay them back. But they don't want to sell their building. So the way they get that $500K is to open up to new investors... but it's easier for them to get 50 people at $10K each. Or 100 people at $5k each. So having a low threshold for investment is a sign that people with the big dollars are pulling out of projects, and they're scrambling to fill the void with smaller potato investors. --137.118.xx.xxx |
REITs (by T [IN]) Posted on: Mar 23, 2024 7:02 AM
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That sounds like a LLP/jr partner set up. Grant Condoe does that set up. Promises high returns and interest payments... then doesn't deliver.
I would stick to actual traded REITS. Think Realty Income (O), VCI, WP Carey (WPC). Easy in, easy out... gives a dividend. I like O, the market doesn't. Monthly divy, invests in single tenant NNN leases, no office space. Selling at discount.... very well run business. They have like a 1100 Dollar Tree/DG/Family Dollar location.... one is closing/no renewing their leases, mostly in big towns (higher rent, higher theft, lower profit). Guess what? O got rid of most of the bigger town stuff back during the BLM movement. So the market thinks O is going to have a big hit, NOPE.... --170.203.xxx.xxx |
REITs (by Ray-N-Pa [PA]) Posted on: Mar 24, 2024 8:58 PM
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I am pondering a small $30,000 investment into a DST, a very select type of REIT. It is with some left over funds I had from a 1031 exchange.
Is thee risk? Absolutely.
The single biggest risk I see to me - were the small and hidden fees that are buried in that fine print. The specific investment I am eyeing is a series of NNN investment properties that are specific to the energy sector in and near Houston.
About investing into any REIT - I am told that there is a backdoor method of buying into a non-DST REIT with 1031 funds. That is well above my level of knowledge, but if these are exchange funds - you can have your CES qualified exchange officer explain this to you.
FWIW - DSTs are paying about 6%, can typically be leveraged upwards on 50% on some offerings and then you get that appreciation on the end. If they are offering you 12%, that is rather risky. There is a group of investors that are asking for some IRA funds that were paying 10-12%. I believe they were hard money folks though - so I am sure they were able to squeeze money out of someone to pay for our funds. --24.101.xxx.xxx |
REITs (by Nicole [PA]) Posted on: Mar 24, 2024 11:38 PM
Message:
Thanks all.
This sounds way above the level my brain wants to function at this point in my life. I believe I'll look into the mutual fund reits.
--98.237.xxx.xx |
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