Equity REITs: Most REITs are equity REITs, which buy, own and manage income-producing real estate. Revenues are generated primarily through rents (not by reselling properties).
Mortgage REITs: Mortgage REITs, also known as mReits, lend money to real estate owners and operators either directly through mortgages and loans or indirectly through the acquisition of mortgaged backed securities. Their earnings are generated primarily by the net interest margin—the spread between the interest they earn on mortgage loans and the cost of funding these loans. This model makes them potentially sensitive to interest rate increases.
Hybrid REITs: These REITs use the investment strategies of both equity and mortgage REITs.
Brokerage costs vary by company, but may include formation fees, annual management fees and a percentage of profits in the form of a “promoted interest.”
Typically externally advised and managed.
Typically $10,000 - $500,000; private REITs that are designed for institutional or accredited investors generally require a much higher minimum investment.
Generally exempt from regulatory requirements and oversight, unless managed by a registered investment advisor under the Investment Advisers Act of 1940.
Not required other than the Internal Revenue Code’s requirement that a REIT needs to have a board of directors or board of trustees.
Shares are not traded on a public securities exchange and are not generally liquid. Redemption programs for shares vary by company and may be limited, non-existent, and/or subject to change.
Reports can be easily accessed and downloaded directly through our investor portal; which is accessible either online or through the app to track up to date reporting.
You can invest in a fund for as little as $10,000 rather than having to buy a property for six-figures with a large down payment.
Like stocks, you can sell REITs shares whenever you like versus a home purchase which can take time to sell depending on market conditions.
With REITs, you can invest in commercial properties, shopping malls and multifamily – all at a reasonable entry price. That’s much harder to do as a direct investor where up-front capital can often be a challenge.
If you own a rental property, you are subject to tenant complaints; late payments; broken appliances; and yard, driveway, and home maintenance. With REITs, you'll just track your investments on a reasonable and regular basis.
AMR Capital is an advisory firm and asset manager of private funds. Our website is for informational purposes only and intended for our non-advisory origination and servicing clients only. As such, nothing herein is an offer or solicitation for the purchase or sale of any security. Investors may log into their private investor account using their assigned login link. Deal terms subject to change at our discretion. Investments in securities and real estate involves substantial risk. AMR Capital is SEC/FINRA registered ERA focused on real estate investments.
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