One of the top questions I get here at Flipping America goes something like this: “I want to keep my day job but I want to invest in real estate on the side. You have several options and today we are going to talk about them.
The REIT (Real Estate Investment Trust) is one of the first passive real estate investment vehicles created. The REIT raises capital from ordinary investors who purchase shares, in a manner similar to buying stocks. The REIT then purchases and manages real estate. The laws governing REITS require almost all of the profits to be paid out to the shareholders. Your return will be based on the performance of the REIT.
Many REITs consistently provide returns of well over 10% annually and some approach 20% returns. And now you know why this is a topic we all should explore. Why would you go to all the trouble and effort of a fix and flip that will pay you a 10% return on your investment? Hint: You should not do that deal. You’re better off in a REIT.
I’m famous for saying “Compare everything with everything.” Learn about REITs and compare them with what you are already doing. You may find that this is a direction you want to go.
Deidre Woolard is Editor in Chief of MillionAcres.com, a division of The Motley Fool investment advisors. She recently spoke at a live Flipping America REIA event and we have pulled some of the audio from that interview for you today. If you want to watch the entire video, go to flippingamericareia.com
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