What is a REIT?

https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcRYBAHkwnarbu9LPlb2LxrGMWeav02EJTXNXcGneJmmLBFq_BZKREIT is the acronym for Real Estate Investment Trust. According to the National Institute of Real Estate Investment Trusts 190 Re Its are currently registered with the SEC and trade on one or more of the New York Stock Exchanges. There are over 900 REITS that are privately held companies.

The advantage to investors in the REIT is the source of income it provides. Specifically, due to the structure of the REIT it does not accrue corporate tax, instead it returns all of the taxable income to investors. The investor receives a 1099 form for tax purposes and it is therefore taxed like additional income.

The REIT can be designed to fit almost any scenario available in the real property world. It can play the upside and the downside and provide hybrid type coverage. Primarily the REIT is composed of commercial property including shopping malls, apartment complexes and income producing property. It also is packaged with residential real estate of a particular type. Continue reading

Real Estate Basics

https://encrypted-tbn2.gstatic.com/images?q=tbn:ANd9GcQDyPx3TOKhs-f2Y6-Cye0Uv6rRV6I9rEH-qus7RCpereKL-tOmoAThe term real estate is used to refer to any property, which is permanently attached to land such as buildings and houses. Most people refer to it as real property but there are situations wherein the term real estate is used for the land and the building together while real property refers to the ownership rights of the land itself. On the other hand, the word real is used to categorize these properties as things as opposed to people. Records show that the idea of real estate can be traced as far back as 1666. With the idea of personal property becoming more widespread, real estate has become a major area of business in the United States. In fact, economists claim that the reason for the recent economic slump is due to the lower revenue generated by this industry. Most people land and buildings as an investment. Our investment experience shows land in the ultimate investment, while buildings tend to depreciate after 10-20 years. Continue reading

What is a Hedge Fund?

https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcRYkDhqX6zw5pz1rumFOVXasxyg1r8vQOGj5Qsml5_uYwHQYgP-A Hedge Fund is private investment fund which provides a hedge against market conditions and tries to make profit from buying/selling hedged positions. The Hedge Fund is not simple in practice. On a global basis there is over a trillion dollars of private investment capital that can literally invest in any commodity, currency indeses and stocks and bonds. Unlike traditional investing the Hedge Fund may go long or short the market. It is private equity and therefore the gains on transactions for fund owners is taxed differently that normal capital gains taxes.

A typical Hedge Fund is formed by individual investors who have a stake in the fund. The buy-in is in the millions. Noted Hedge Fund owners are George Soros and the Blackstone Group founded by Peter G. Peterson and Stephen A. Schwarzman. The Blackstone Group is a fairy tale. The Blackstone Group was founded by Peter G. Peterson and Stephen A. Schwarsman. According to the Blackstone Group corporate biography the iniital private funds in 1985 were $400,000. By forging alliances and partnerships with some of the most well-heeled on Wall Street their assets under management are over 88.5 billion dollars. Continue reading