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9 Cards in this Set
- Front
- Back
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Direct Investment
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A real estate investment in which the investor holds legal title to property.
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List examples of direct investment
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Single-family dwellings, duplexes, apartments, land, and commercial property
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Indirect investment
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A real estate investment in which a trustee holds legal title to property on behalf of the investors.
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List examples of indirect investment
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Limited partnerships, syndicates, real estate, investment trusts, mortgages, and mortgage pools
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What are the possible advantages of real estate investments
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hedge against inflation, limited financial liability, no managment headaches, financial leverage
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What are possible disavantages to real estate investments
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illiquidity, lack of diversification, no tax shelters, new tax law provisions.
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What is real estate Investment trust (REIT)
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A firm that pools investor funds and invests them in real estate or uses them to make construction or mortgage loans.
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What are the Three types of REITs?
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Equity REITs invest in properties; mortgage REITs pool money to finance construction loans and mortgages on developed properties; and hybrid REITs are combinations of mortgage and equity REITs.
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What are REITs required to do by the Federal Law?
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Distribute at least 90% of their taxable annual earnings to shareholders_Refrin from engaging in speculative, short-term holding of real estate to sell for quick profits_Hired independent real estate professionals to carry out certain management activites_Have at least 100 shareholders; no more than half the shares may be owned by five or fewer people_invest at least 75%of the total assets in real estate
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