Non-traded REITS
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The lack of fluctuation of the principal… The principal will remain steady(or increase if reinvesting) until the offering closes… Then the price/share will remain constant for another 12months(i think) and then it is reevaluated on an annual basis.
The IPO just sweetens the pot, but I don’t count on it(most of the time they get bought out by one of those public REITS)
No door banging. Your client gets a monthly check into their account. Triple net means the corporation covers everything including maintainance, insurance, upkeep etc. Your client does nothing except collect a check. The Syndicator sends a K-1 every year. The risk is the company goes out of business which is why you want a large A rated corporate lease. In the worst case instead of owning a bond and settling for cents on the dollar or have an equity swap, you can re-lease the property or try to sell, and dont have to wait years for attorneys to settle. All cash means no debt service in a worst case situation.
If I recall, you are with RJFS. Contact the Alternative Investment Group (AIG) w/ Raymond James. They have Non-Traded REITS (Hines is the only one I recall), Hedge Funds, and something else I can't remember. For Hines, they have one that pays you upfront, and one that doesn't (for fee-based business). Call them.[/quote] Thanks Wet, thats what i was looking for. Whats the advantage of non public vs public REITS - is it just the possibilty of an IPO?[/quote] The main advantage of Non traded REITs is the price stability as mentioned before by a few people. The NAV stays constant (but can change but not all that common going forward) so you don't deal with day to day principle fluctuation as you do with bond funds or public stocks. It doesn't mean Nontraded Reits are far better than traded ones but it's nice to have a stable income producing investment. you don't have the liquidity like the traded REITs and obviously with traded REITs so depressed, you may have more upside potential with them. However, I'll keep selling nontraded ones any day over a stock REIT.[quote=Wet_Blanket][quote=Sportsfreakbob]How do you go about buying them as an indie? Do all indie B/D’s allow them? Who would you contact?
Here is a timely article.
http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20091018/REG/310189969/1009/INIssueAlert01[quote=Wet_Blanket] Here is a timely article.
http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20091018/REG/310189969/1009/INIssueAlert01[/quote]
Wouldn’t really call it timely…
It only makes sense that real estate bought at the height of the market would go done(Inland Western), but I own inland american and the dividend is still at 5% and they were picking up some nice properties… Sometimes it’s about timing. Anyone who bought internet stocks before the crash had the same thing happen. But the advantage is that there are “real” assets behind these(building/land(god stopped making land a long time ago(except in Dubai)). So you still have a real asset at the end of the day(as opposed to a company that sold 200lb bags of dog food).
I was just getting ready to ask this…
How much do you get paid on a typical REIT - say on a $100k acct ?
[quote=IndySouth]
[quote=gettingstarted] I was just getting ready to ask this…
How much do you get paid on a typical REIT - say on a $100k acct ?
[quote=IndySouth]
$5k on a $100,000 investment ain’t bad…
Is that typical with Inland, etc…? Or does it depend on the b/d ?
Just to clarify - you are saying 5% so on an investment of $300,000 you would put $15k in your pocket…???
[quote=3rdyrp2][quote=gettingstarted] I was just getting ready to ask this…
How much do you get paid on a typical REIT - say on a $100k acct ?
[quote=IndySouth]
It may depend on the B/D and the REIT company. I know that Cole Capital pays me 7% gross, and my firm nets me 90%. So I net $6300 ($7K gross) on a 100K sale. It gets paid by the REIT so the client doesn’t see it come out of their principal.
[quote=gettingstarted] $5k on a $100,000 investment ain’t bad…
Is that typical with Inland, etc…? Or does it depend on the b/d ?
[quote=3rdyrp2][quote=gettingstarted] I was just getting ready to ask this…
How much do you get paid on a typical REIT - say on a $100k acct ?
[quote=IndySouth]
[quote=3rdyrp2] [quote=gettingstarted] I was just getting ready to ask this… How much do you get paid on a typical REIT - say on a $100k acct ?[quote=IndySouth]
plus (not that this should be a consideration when recommending anything), it pays 7 beans to the broker…[/quote][/quote]
5% at my firm, no matter what amount is invested.[/quote]
Why only 5% when everyone else gets 6 & 7 depending on the REIT?
Damn
I’m thinking, why in the heck would you sell anything else…???
One $100k acct a month would be great…
[quote=IndySouth]It may depend on the B/D and the REIT company. I know that Cole Capital pays me 7% gross, and my firm nets me 90%. So I net $6300 ($7K gross) on a 100K sale. It gets paid by the REIT so the client doesn’t see it come out of their principal. [/quote]
[quote=Squash1] [quote=3rdyrp2] [quote=gettingstarted] I was just getting ready to ask this… How much do you get paid on a typical REIT - say on a $100k acct ?[quote=IndySouth]
plus (not that this should be a consideration when recommending anything), it pays 7 beans to the broker...[/quote][/quote]
5% at my firm, no matter what amount is invested.[/quote]
Why only 5% when everyone else gets 6 & 7 depending on the REIT? [/quote] The Firm is taking a haircut to the broker.....
Why are insurance guys who sell annuities with a 6% commission greedy, and a 7-10 year surrender is considered criminal by some on here, but brokers who sell non-public REITs for a 7% commission and forever high costs to exit, if exiting is even available, are doing right by their clients?
Things that make you say Hmmmmmmmmmm???
Dateline NBC hasn't caught wind of REIT's yet. They've gone hog wild with annuities and VUL's. REIT's are probably next in line.
None of the REIT’s I’ve seen or used (which is all the major ones that all of them are modeled after) pay trails. KBS does pay some commission on reinvested dividends tho so that kinda works like a trail.
Berkshire- i totally agree with you. To the point that insurance guys should NOT get grief for their sales and commissions. The important thing regardless of the investment sold is that it is appropriate for the client, is an appropriate % of their portfolio, has been fully explained to the clients, and is in their best intrest. If all those things are met, the more you make the better. Sometimes it will be a 1% bond, a 2-5% mutual fund, a 7% REIT or EIA, or whatever. The only difference between the REIT and EIA though is the REIT is a security and b/d's have set compliance guidelines on how much you can allocate where most peoples gripe is some agent/advisors that put LARGE %'s of clients investable assets in fixed annuities.A couple reasons.. Surrender charges don't start at 16%. All advisors have to have a 7 or be an RIA Only certain firms offer (Indys, Ameriprise) Main reason is that they have to qualify, 75&75 or 250. Also most firms restrict how much of a persons liquid networth you can put in(most cases 25%)Why are insurance guys who sell annuities with a 6% commission greedy, and a 7-10 year surrender is considered criminal by some on here, but brokers who sell non-public REITs for a 7% commission and forever high costs to exit, if exiting is even available, are doing right by their clients?
Things that make you say Hmmmmmmmmmm???
[quote=Squash1]
Main reason is that they have to qualify, 75&75 or 250. Also most firms restrict how much of a persons liquid networth you can put in(most cases 25%) [/quote] Wow, I'd like a piece of that action. We're only allowed to do up to 10%. Of course we can have the client initial the application waiving the 10% rule, but the compliance is too much of a headache to be worth the hassle.