Real Estate Investment Groups (REIGs)

The whole reason why people choose to invest in real estate is because they are looking to make money. Real estate is a great way to diversify your portfolio.

Appreciated Value

Most people purchase real estate with the hopes that it will appreciate in value, meaning the value in the future will be higher than it is today.

Rental Income

Most people purchase rental properties because they want to generate revenue through rental income.

Fix and Flips

Some people want to invest in physical real estate but don’t want to deal with tenants. They typically choose to buy properties with the sole purpose of doing a fix and flip.

A Real Estate Investment Group (REIG) will buy or build a collection of properties and then sell them to real estate investors. The REIG will handle locating tenants, handle all maintenance, and other responsibilities that come from owning a rental property. This gives real estate investors a more hands-off approach.

REIGs are perfect for someone who wants to experience the benefits of owning physical rental properties but doesn’t want to be responsible for tenants and maintenance of the properties.

Similar to other real estate investment options, cash is a crucial part when you want to get started investing in a REIG. However, because it’s a much more hands-off way to invest, you don’t need to have the skills to do a lot of the work yourself.

Pros:

• As mentioned above, investing through a REIG offers investors a more hands-off approach to real estate. You capitalize on rental incomes and property appreciation without all the work.
• You will have the chance to invest in multiple properties which means diversification similar to that of a mutual fund.

Cons:

• Less work also means less profit. Because you are allowing the REIG to handle a lot of the work, you will also earn a lesser amount of the profits.
• If there is a vacancy in one of your units, it will require cash to cover the monthly mortgage.

Topics: Real Estate Investment Groups, Diversification

Work cited: Sean Bryant, June 07, 2019

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