Create a Private REIT or a Private Fund, and Why?

[Matt White]

Lets say you have $100m to invest in real estate. Would you create a private REIT or a private Fund, and why?

I know there's lots to consider. I think funds offer more flexibility, but why not take advantage of the tax benefits of a REIT structure?

[Chris Seveney]

Quote from @Matt White:

Lets say you have $100m to invest in real estate. Would you create a private REIT or a private Fund, and why?

I know there's lots to consider. I think funds offer more flexibility, but why not take advantage of the tax benefits of a REIT structure?

Are you asking if YOU personally have $100M? If one person has $100M then why would they setup a reit where they are the only investor? Or are you saying that you get $100M from investors? 

There are tax benefits to a REIT vs. a LLC but the REIT has to be completely passive. Depending on your business model it will depend on how you want to incorporate your business. Realize a REIT also will cost a lot more for tax returns and potential reporting.