Income REIT

Cali-Guy said:
Avoid non-traded REIT's. http://www.yourinvestmentadvise.com/non-traded-reits.html
I find it amazing that you want to do this salesman your are dealing with a favor. It's YOUR money and YOUR future!
If you need help then go to NAPFA.org and hire a fee-only fiduciary adviser. Advice is not free. This will save you lots of money over time.
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I am NOT dealing with a non-feduciary advisor.. and he is not a REIT salesman. How did you jump to that conclusion? He has been our fiduciary advisor for 20 years.... and yes.. he gets a fee.
 

Stephen said:
My opinion on REITs
1. Only buy publicly traded REITs with a high daily trading volume.
2. Buy equity REITs, not mortgage REITs.
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I completely disagree...



While non-traded REITs have relatively limited liquidity, they offer the same benefits as their publicly traded counterparts. By definition, the key benefit of non-traded REITs is that they are not yet publicly traded.

Subsequently, they offer the reasonably predictable cash flow of publicly traded REITs without the volatility incumbent in the public markets. Additionally, non-traded REITs receive the same tax benefits as publicly traded REITs. That is, by meeting certain requirements for taxable income distribution to shareholders, the REIT itself is not taxed, thereby reducing tax on the potential return on the investment, unlike traditional stock investing.
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- See more at: http://www.ccim.com/cire-magazine/a...ortfolio-diversification#sthash.eTkBMW8j.dpuf
 
I am NOT dealing with a non-feduciary advisor.. and he is not a REIT salesman. How did you jump to that conclusion? He has been our fiduciary advisor for 20 years.... and yes.. he gets a fee.
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Well if he's the one who recommended a non-traded REIT I would be investigating if he is DOUBLE DIPPING on you!
What does your written contractual agreement with this adviser say? Does it actually state that this guy is acting in the capacity of a "fee only" fiduciary?. In addition to accepting fiduciary responsibility to you in writing (via a signed contract), a legitimate registered investment adviser will provide you with copies of both parts of a "Form ADV", and provide you with a written disclosure of exactly how he will / may be compensated for his services and list any potential conflicts of interest.

If all of that checks out then ask him SPECIFICALLY why this is a better investment than a low cost, liquid, publicly traded REIT index fund. There's a ton of reasons why non-traded REITS are inferior and more risky.
 

Cali-Guy said:
Well if he's the one who recommended a non-traded REIT I would be investigating if he is DOUBLE DIPPING on you!
What does your written contractual agreement with this adviser say? Does it actually state that this guy is acting in the capacity of a "fee only" fiduciary?. In addition to accepting fiduciary responsibility to you in writing (via a signed contract), a legitimate registered investment adviser will provide you with copies of both parts of a "Form ADV", and provide you with a written disclosure of exactly how he will / may be compensated for his services and list any potential conflicts of interest.

If all of that checks out then ask him SPECIFICALLY why this is a better investment than a low cost, liquid, publicly traded REIT index fund. There's a ton of reasons why non-traded REITS are inferior and more risky.
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I'm not going to argue with you... It's not that big a deal for me... It's a very small amount of money, and having worked with this adviser for so long and seeing my fortune grow under his guidance.. I tend to believe him far more than some stranger on an internet forum.. My feeling is that he has earned every dime he has made. He is not only a financial adviser, but has become a friend.
 
QuickSilver said:
I'm not going to argue with you... It's not that big a deal for me... It's a very small amount of money, and having worked with this adviser for so long and seeing my fortune grow under his guidance.. I tend to believe him far more than some stranger on an internet forum.. My feeling is that he has earned every dime he has made. He is not only a financial adviser, but has become a friend.
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Never mix friendship with business. If this guy is double dipping then it's no wonder he's so friendly.
Secondly, it's not the advice of "some guy on the Internet". We're talking about facts and studies. You can read all about non-traded REIT's on the Internet. Ric Edelman is constantly warning people about them on his radio show almost every week. If you want to take a shot at real estate then there's low-cost liquid index funds that do that. No real estate index fund has ever turned out to be a Ponzi scheme or dropped 25% by surprise in one day. Advisers don't shave 10% off your initial investment with index funds either.
 
I have always had all of my money in various mutual funds to spread the risk. That worked very well for us over the years. At 80 plus, I now have it all in a money market fund, but am thinking about putting maybe a third back into an index fund.
Some time ago, I did have a portion in a REIT fund, and it did very well for us for a while. With interest rates so low, its impossible to find an investment without risk right now. What you have to ask yourself, is can I afford to lose this money. It does happen, but the likely hood of losing all of it is probably slim. One of the nice parts about investments is that, unlike a horse race, if you lose, you get a chance to run around the track again. Unless your horse dies of course. Just my opinion. As my mutual fund company likes to say; "Past results are not a guarantee of future performance."
P.S. I just looked over the comments again, and I noticed you said "not very liquid..looking for long term investors" Everyone is different, but those would be red flags for me. I want immediate flexibility.
 
Underock1 said:
I have always had all of my money in various mutual funds to spread the risk. That worked very well for us over the years. At 80 plus, I now have it all in a money market fund, but am thinking about putting maybe a third back into an index fund.
Some time ago, I did have a portion in a REIT fund, and it did very well for us for a while. With interest rates so low, its impossible to find an investment without risk right now. What you have to ask yourself, is can I afford to lose this money. It does happen, but the likely hood of losing all of it is probably slim. One of the nice parts about investments is that, unlike a horse race, if you lose, you get a chance to run around the track again. Unless your horse dies of course. Just my opinion. As my mutual fund company likes to say; "Past results are not a guarantee of future performance."
P.S. I just looked over the comments again, and I noticed you said "not very liquid..looking for long term investors" Everyone is different, but those would be red flags for me. I want immediate flexibility.
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Four years on this one. Guaranteed 7.5% return. As I said... this is a very small sum of money... The bulk of my investments are in 401ks, Roths, 403bs, anuities, and I do own some personal real estate other than my primary residence. If my adviser is making some money on this... and I hope he is... we all have to live right? That said... I've never been a huge risk taker, and my adviser knows that..
 
QuickSilver said:
Four years on this one. Guaranteed 7.5% return. As I said... this is a very small sum of money... The bulk of my investments are in 401ks, Roths, 403bs, anuities, and I do own some personal real estate other than my primary residence. If my adviser is making some money on this... and I hope he is... we all have to live right? That said... I've never been a huge risk taker, and my adviser knows that..
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Four years is a long time in "Golden Year" terms, but 7.5 "guaranteed" (?) sure is a tempting return.
You seem at ease with the amount at risk, and they say the most important thing in an investment decision is can you sleep at night. You have to make the decision, but from your information, it seems like it might be worth a shot.
 
Underock1 said:
Four years is a long time in "Golden Year" terms, but 7.5 "guaranteed" (?) sure is a tempting return.
You seem at ease with the amount at risk, and they say the most important thing in an investment decision is can you sleep at night. You have to make the decision, but from your information, it seems like it might be worth a shot.
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well, thanks for your concern... I guess I will have to see what happens..
 
QuickSilver said:
Four years on this one. Guaranteed 7.5% return. As I said... this is a very small sum of money... The bulk of my investments are in 401ks, Roths, 403bs, anuities, and I do own some personal real estate other than my primary residence. If my adviser is making some money on this... and I hope he is... we all have to live right? That said... I've never been a huge risk taker, and my adviser knows that..
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You are chasing yield. Google the term. It's not a good thing. 7.5% is a red herring. The REAL question is how will it do versus it's comparable benchmark. As that study that I cited determined, 71% on non-traded REIT's underperform their benchmarks. Considering that non-traded REIT's are ALSO illiquid, I don't know what anyone would invest in one.
Annuities? Did the same broker sell you that too? If so I wouldn't feel so sorry for him. Again he is taking you to the cleaners. It's your future. If you like giving it to an over-paid salesman then enjoy. Non-fiduciary "advisers" (salesmen) usually make over 100K or more per year.
Not a big risk taker? Fine. Invest more in bonds. It's that simple. Salesmen LOVE to prey on people who are ignorant of diversification into bonds. Bonds smooth out stock volatility. The two also balance each other out. When stocks fall, money runs to the safety of bonds and vice versa. Don't expect a commission-based adviser to educate people on that as they are trying to sell you that expensive high-commission, illiquid annuity or non-traded REIT.

7.5% is not guaranteed. And getting all of your principal back is certainly not guaranteed. Over that last few years, index fund REIT's have done over 11%. Just sayin'. Is that REIT called Nexregen by any chance?

According to the White House Council of Economic Advisers, conflicts of interest shaves off on average 1 percent per year from retirement savings.
 
QuickSilver said:
I've got a chance to buy into a new investment offering. The company gives mortgages to large hotels and Corporations on commercial real estate.. I am guaranteed a 7.5% return as an income stream. I've never done something like this, but my financial advisor thinks it's a good opportunity and he has personal money in a similar offering by the same Company. It's a limited offering.. the Corporations are large and well known chains.. What say you?
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NEVER invest in non-traded REITs, which is what this is. This adviser you are dealing with is a non-fiduciary (a salesman who does not legally work for you). That 7.5% is NOT guaranteed. They can lower it if times get tough. If you are in love with real estate then just buy an index fund like VNQ through any deep discount brokerage like E trade. Publicly traded securities like VNQ can also be sold at any time for any reason.
 
I invest in REITs only because I'm retired and able to watch the market on a daily basis. Even then, I have to be very careful. If a REIT does not trade on the NYSE, I don't consider it. Years ago, I read an article about REITs in the Kiplinger Magazine and bought a REIT stock for my IRA. Some 40 years later, I still own that stock. Although being careful, I bought some REITs that went bad.
 

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