Starting out as a REIT investor and financial analysis

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Starting out as a REIT investor and financial analysis

Johnny H.
Member since 2021 · 4 posts · 1 vote

I'm currently looking to invest in REITs. I've read and am reading books and watching videos on what they are, what considerations to look at, etc. However, I do not come from a finance background, nor have I invested in the stock market before. I find that some of the analysis that I read on looking at spreadsheets and other financial considerations to be a bit overwhelming at times as I am not very knowledgeable as to the intricacies of financial analysis. Are there sources that anyone would recommend that I use to help fill in or better inform me about effective financial analysis in real estate, specifically REITs?

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Taylor L.
Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
4y

They're not a big topic of discussion on BP. That is because real estate investors generally see REITs as far more akin to stocks than to real estate.

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  • Taylor L.
    Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
    4y

    They're not a big topic of discussion on BP. That is because real estate investors generally see REITs as far more akin to stocks than to real estate.

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  • Johnny H.
    OP
    Member since 2021 · 4 posts · 1 vote
    4y

    Yeah, I've noticed that too, which is admittedly a reason I was drawn to real estate. But being young with a savings account that I'm still building up, I've been drawn to REITs due to the fact I can put my money somewhere sooner and gain experience. It's definitely difficult to find a lot of forums out there on the topic beyond youtube videos.

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  • David Van Singel
    Real Estate Agent · Orlando, FL · Member since 2020 · 39 posts · 20 votes
    4y

    If you're looking for a valuation method for a REIT, I have been told to compare price to NAV or price to book value. Given that you're less of a finance/numbers person, look at what you would be buying. Is the company into leasing office or retail space? Are they the kind of company that focuses on residential? They could be a little more derivative. For example, AGNC is a REIT that focuses on residential mortgage backed securities.

    As for where you could go to learn more, I really like the youtube channel "Learn to Invest - Investors Grow". Jimmy focuses on value investing but he also does a good job of explaining concepts. I wish I knew of him when I was starting college and going through business classes. Given, this is much more equities based. If you're looking to stay more real estate focused, stay around BP. Even if you don't understand a lot, you'll absorb more than you think. One day, it will make sense. 

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    4y

    @Johnny H.

    You can also check out some regulation a+ offerings in real estate - they operate similar to a reit but are smaller and are more transparent typically on data and communication because they are $50-$100M not multi billions

    Send me a pm and I can send you a few to look at.

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