Real Estate Investment Company (REIT)?

kdub1777

(kind of long)
I have heard of people starting Real Estate Investment Trusts that have been a success. I am considering starting one up, or something similar, for investors to get into the real estate market in my area. I would oversee the investments and developments. I have no idea how they work or how they are ran. Has anyone done something like this? How would the entity be set up when running a real estate investment company? Should it be an ongoing corporation, or an entity with a set time frame of just the investment going on in the allotted time? How would you handle the individual investors funds? And what type of return on their investment is considered average? A lot of questions, I know, but I have no idea how they are set up. I will be contacting an attorney and CPA to see how these types of businesses are set up, but any and all help and experience would be appreciated.

Thank you

jblati

You nailed it- contact an attorney and CPA. REITS are a decent business if you do them right, and they have significant tax advantages.

However, since they do play by different rules (IE, no taxes on investor's dividends) you REALLY need the help of pro's on them.

I have invested in them on a number of occasions and done great with the investments. However, right now I am staying away from them.

kdub1777

Thanks Jblati. I think contacting the pros is the way to go. They do seem to be set up in a unique way. Would you be able to tell me what the return on your investments were % wise?

jblati

Easy to do, I have them right here on my computer:

2003- 36.74%

2004- 31.49%

2005- 12.13%

These returns DO reflect not only change in equity, but tax free earnings as well. So, the numbers are as close to "real feel" impact as possible.

Notice the downward trend, but on some REITS, they simply have a bad year, then follow it with a great year.

kdub1777

Thanks jblati. Was this a private or public REIT? Thanks again

Landwatch.com

Real estate investment trusts are a profitable deal for those who are actively engaged in an asset allocation or are just looking to diversify their current portfolio. The REITs are a convenient way for the average investor to profit without the hassle of direct property acquisition. Besides, the best thing with the REIT is that they can be bought with only a few hundred dollars and even they have many tax advantages.

JCS ILLINOIS

I saw your questions about REITs. If I may ask, did you ever do anything about forming one? Where you thinking about a public or private REIT? We were very close to starting one and friend was concerned that he already had to much on his plate at this time. Get back to me if you want, I'd be interested to see if you started it yet or if you even plan to start one.