|
REITs (Real Estate Investment Trusts) are vehicles for real estate investment.
Sometimes the entry level (price) can be quite low. There are REITs on the stock exchanges that may be bought like stocks and bonds.
1031Replace.Com cannot assist you with the purchase of these so called publicly traded REITs (call your stockbroker).
However, 1031Replace.Com does handle non-publicly traded (sometimes called "private") REITs. Either public or private REITs provide a vehicle to invest in real estate. REITs normally contain a portfolio of properties. REITs are required to pay at least 90% of their net earnings to investors annually. Publicly traded REIT shares sometimes have
the volatility of the general stock market (and this can be good or bad
depending on when you buy and when you sell), but are highly liquid (you buy
and sell them just like stocks and bonds).
Private REITs, which are often created by real estate companies who also do TIC's, are usually pools of money (sometimes called opportunity funds) with which the real estate company then shops for properties it believes are attractive to purchase with the funds. Once the funds are
invested, the investor (along with the many other investors in the REIT)
receives cash flow checks in the mail.
Some REITs already own their own real estate. Each private REIT investment program is a little different and are sold as private placements much like TICs (Private Placement Memorandum, etc.).
REIT
returns averaged over 20% per year between 1999 and 2004. There is no guarantee that such returns will
be realized in the future, but REIT shares we believe are appropriate for a
well balanced investment or retirement portfolio. Click here to be linked to the National
Association Of Real Estate Investment Trusts (NAREIT).
Some people believe private REITs offer better return potential than public REITs, and may be less volatile. Remember,
though, REIT shares, whether public or private, are not qualified to be
replacement properties in 1031 Exchanges.
Likewise, limited liability company (LLC) interests, limited partnership interests (LP's) and partnership interests are not qualified as replacement properties in 1031 Exchanges, but may be excellent vehicles for real estate investment in other contexts.
1031Replace.Com normally has private REIT investments available (minimum purchase amounts can range from as low as $1,000 to as much as $100,000). These may be excellent retirement account
additions.
Incidentally, TIC sponsors often make LLC
interests available as a component of their TIC offerings (in the same
property) so that non-1031 Exchange investors can acquire an interest. Usually the closing costs are less than the
TIC components, and the minimums are usually lower, but an investor in the LLC
component of a TIC offering will not be able to 1031 Exchange out of the
property when the sponsor later re-sells the property and cashes out the
investors. |
