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Proprietary Data Insights Top REIT Searches This Month
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No Longer Just For The Rich It used to be that only the big money – like hedge funds and people with connections – could invest in private markets. However, as The Juice has illustrated in a couple recent installments, everyday investors now have access to some of the opportunities once available only to the well-off. In a minute, we’ll highlight more of these opportunities, but first let’s review what we have already covered. In mid-August, The Juice introduced and explained some of the rules around private market investing by summarizing one of the most popular avenues – equity crowdfunding. You can be a venture capitalist by helping fund private companies at various stages of development, from startups to plenty who are super far along and generating serious revenue. We highlighted major platforms who make this happen, particularly StartEngine. Shortly thereafter, we broadened the scope by getting into more detail about the different types of government regulations that have effectively helped get us closer to leveling the playing field with the big money. In today’s Juice, we take the next step, looking at another alternative class of investments once only accessible to the rich. |
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You Can Now Access Investing Once Only For The Rich |
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Key Takeaways:
Tip of the cap to our financial media partner and friends at Benzinga for writing an excellent article outlining another way everyday investors can get in on investments once only available to rich people. In the article, Benzinga discusses investing in non-traded REITs. That is real estate investment trusts that don’t trade on the public stock market, such as the NYSE or Nasdaq. The Juice loves following publicly-traded REITs, particularly the ones involved in luxury apartments. But broadly speaking, REITs you can buy on the stock market own and operate all types of real estate, ranging from residential to commercial (e.g., Realty Income (O)) to office space (e.g., Hudson Pacific Properties (HPP)) to actual storage space (e.g., Public Storage (PSA)). Some REITs even invest in mortgages and mortgage-backed securities. So you get the picture. What Benzinga featured are REITs you can’t buy on the stock market that invest in potentially prolific and certainly attractive spaces. These are non-traded or private REITs: In most cases, the types of real estate owned by private REITs is institutional quality. That means the assets are solid enough in their profile and revenue potential that institutional funds like state retirement funds, 401k plans and private pensions target them for their portfolios. Examples of these kinds of assets include:
So, as is the case with many types of private equity investing, you have access to a wider assortment of opportunities. Not just those open via the stock market. The difference between today and a few years ago when only the rich had access to the private markets is that, as Benzinga details, platforms exist to facilitate relatively small retail investment: When you hear the term non-traded REIT, it’s easy to assume they are hard to find. However, the reality is a little different. Numerous reputable investment platforms such as Fundrise, Yieldstreet and RealtyMogul offer some compelling non-traded REITs. If you peruse their offerings, you will find an incredibly diverse range of non-traded REITs in a number of different real estate sectors. Looking more closely at the platforms Benzinga suggests shows just how accessible and attractive they can be:
The Bottom Line: Public or private, you must conduct your own due diligence prior to investing. You can lose money via private investments just as easily as you can public ones, such as stocks and ETFs. That said, the barriers to investing continue to come down. First, it was commissions and account minimums to trade stocks. Now, it’s increasing access to private market opportunities. And really the beauty of it all doesn’t simply lie in the playing field getting more level, as fantastic as this is. It’s really about diversification. You have more opportunities to spread your portfolio across all types of investments, be it within sectors and public versus private. Of course, diversification is one of the hallmarks of a portfolio that can weather storms and stand the test of time. In the coming weeks, The Juice will continue to discuss private equity investing by reviewing specific platforms you might want to consider.
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