REITS VS MULTI-FAMILY PROPERTY PURCHASE

[Lara N.]

Hello

I would appreciate some insight on the PROS/CONS, risk/rewards, tax implications of a MREIT/EQUITY REIT & a cash purchase on a multi unit property.

I'm debating on which channel to focus on but need to know the real values/risks to both & the differences.

thank you

[Mark Updegraff]

It depends on how active you want to be with your investment. A multi family that you're managing will have better returns than an REIT, after all you're doing the managing! If you want something you can forget about and still earn a nice return, go the REIT route. If you get a multi-family and have someone else manage it, then it will depend on their ability to manage. Vacancy rates, repair costs, deferred maint that leads to unnecessary repairs, bad tenants, etc etc etc... An REIT is more diversified in that it isn't ONE property. If you're pretty ambitious and don't mind 'gettin' dirty' then I would go the multi route, you have more control over your return IMO. And if you're careful and selective you can find very nice deals in this market. Even in 'hot' areas, I personally don't really think I would call it a "Sellers" market anywhere I've seen.