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Oakes & Fosher | Non Traded REITs - YouTube
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full offer Moo Oaks info sure these
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videos are made to assist investors who
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experience our reviews and our Better
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your due diligence when choosing an
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attorney to represent your interests it
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is a commonly held belief that one of
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the best and most secure ways to grow
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your money is by investing in real
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estate the reason why real estate is so
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alluring to investors is because it
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provides them with something physical
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while regular equities purchased on
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public securities exchanges do not in
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their minds purchase property will
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always exist meanwhile they might
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believe they're purchased equities may
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just disappear this in turn causes them
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to wrongly believe that real estate is a
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much safer option than publicly
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purchased equities this common
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misconception has unfortunately led to
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investors being placed in highly
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unsuitable alternative investments known
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as non traded real estate investment
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trusts also known as non-traded REITs
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like other alternative investments
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non-traded REITs are privately traded
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securities that do not trade on public
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securities exchanges rather they are
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investment pools designed to solicit
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funds directly from investors to fund
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real estate purchases while these
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securities are registered with the
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Securities and Exchange Commission their
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private nature makes it incredibly
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difficult to regulate them this gives
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less than scrupulous brokers ample
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opportunity to misrepresent these
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investments as safe and lucrative
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when nothing could actually be further
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from the truth in reality non-traded
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REITs are highly speculative illiquid
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and generally unsuitable for most
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investors non-traded REITs usually
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embark on large development projects
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without any real way to guarantee that
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they will be successful these reads are
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not fully developed companies with a
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long history of successful projects they
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are newly formed investment pools often
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embarking on ambitious projects that are
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outside their resources and capabilities
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brokers often draw investors in with the
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promise of high income distributions
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many non-traded reed investors are told
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that their investment returns will be
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paid to them through incredibly high
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scheduled distributions that take place
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over the life of the trust however many
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investors are unaware that these
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distributions are entirely dependent
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upon the REIT success which as stated
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before is in no way guaranteed despite
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this many brokers pitch these
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investments to unsuspecting investors as
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a safe and income producing product in
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addition to the risks associated with
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these products non-traded REITs are also
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incredibly illiquid but simply liquidity
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means having ready access to your funds
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some might assume this only means funds
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held in private bank accounts however
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publicly traded equities are also very
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liquid because they have a guaranteed
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redemption this means an investor can
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redeem their shares at the current value
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at any moment during the life of the
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investment this is not the case with
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privately traded investments like mount
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rated REITs that lack the guaranteed
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redemption associated with publicly
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traded equities due to the nature of
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these investments those managing these
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funds wants to hang on to cash infuse
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for as long as possible because of this
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these trusts often work to deter
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investors from withdrawing funds early
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non-traded REITs only operate for a
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finite amount of time before they
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eventually become public or are
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liquidated it is at this point that
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investors can then redeem their shares
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for their stated value however if an
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investor wants to withdraw before this
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point it is very difficult to do so in
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many cases non-traded REITs only offer
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buyouts on a quarterly or yearly basis
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of which there are only a limited
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or buyouts actually offer if the amount
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of investors looking to withdraw early
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exceeds the number of offered buy outs
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and many investors might find themselves
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stuck in a failing investment on top of
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this investors are very rarely offered
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the amount they're told their shares are
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valued at instead investors are told to
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wait until the liquidation phase if they
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want to receive the full amount however
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depending upon how successful the
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company was the shares could be almost
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worthless by that point aside from their
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associated risk and illiquidity
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non-traded REITs can also be incredibly
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harmful due to their high upfront fees a
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large percentage of these fees are paid
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back to the stock broker and their firm
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as their commission for brokering the
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trade these Commission's can be as high
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as 10% of the principal investment this
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often creates significant conflicts of
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interest for stock brokers as it can
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cause them to recommend non-traded REITs
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so customers that are highly unsuited
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for them compounded with other upfront
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fees this can drain an investor's
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principal investment of as much as 17%
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at the time the transaction is executed
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when an investor's principal is drained
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that significantly it makes it almost
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impossible for them to see positive
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returns on their investments when
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compared to other benchmarks products
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like these are usually only sold by
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third tier brokerage firms some of these
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brokerage firms only require certain
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forms to be signed in order to place
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clients into these products they hide
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behind disclosures on subscription
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agreements and prospectuses as a way to
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sell these products to unsuspecting
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investors they fully utilize the
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complicated nature of these securities
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to hide their true nature and present
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them as something they are not opes info
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sure dedicates its entire legal practice
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to helping investors across the nation
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if you or someone you know have lost
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money due to a highly unsuitable not
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rated read you may be entitled to
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damages if this is the case these
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contact helps info sure for a free and
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private consultation
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you
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