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What is a REIT?

What is a REIT? By Adam Gower Ph.D. A common question that arises when investors first discover the option of investing in syndications via online crowdfunding websites is how they differ from Real Estate Investment Trusts, or REITs. One of the best comparisons to a REIT is a mutual fund; specifically, an equity mutual fund. With an equity mutual fund, you save yourself the trouble of having to compare and pick individual stocks by paying…

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Portfolio Diversification Benefits of Real Estate

Portfolio Diversification Benefits of Real Estate By Adam Gower Ph.D. A New Approach for Your Portolio   Registered investment advisors, or RIAs, have long scoured the market for the top performing securities to invest in on behalf of their high-net-worth clients. Historically, RIAs would invest in some combination of stocks, bonds, and cash as a means of balancing a client’s portfolio. Investing in commercial real estate was never really an option, per the regulations established…

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What You Need to Know About Apartment Building Investing

What You Need to Know About Apartment Building Investing By Adam Gower Ph.D. This article first appeared on the Bigger Pockets Website Investors new to real estate often ask the same question; should I invest in multi-family properties of 4 units or less, or partner with experienced apartment building investors across a range of projects?   They balance the returns on directly investing themselves which would be higher than partnering with a professional investor, with…

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Value Investing: Not Just for Stocks

Value Investing: Not Just for Stocks By Adam Gower Ph.D. ‘It’s far better to buy a wonderful company at a fair price, than a fair company at a wonderful price.’ –Warren Buffet, Value Investor Extraordinaire When most folk think of value investing, their minds conjure images of Warren Buffett, poring over newspapers and corporate financial reports, or perhaps thoughts of a well-worn copy of Professor Benjamin Graham’s seminal work on value investing, “The Intelligent Investor.”…

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Real Estate Investing Explained – Opportunity Zones

Real Estate Investing Explained With Support from SmallChange OPPORTUNITY ZONES   In the Tax Cuts and Jobs Act of 2017 there was a bipartisan section that created ‘Opportunity Zones.’ Opportunity Zones provide for incentives to investors to invest in economically distressed areas around the country by permitting them to defer or completely avoid capital gains tax no matter where those capital gains taxes come from. Watch this episode to learn how you can benefit from…

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Real Estate Investing Explained – LTV vs. LTC

Real Estate Investing Explained With Support from SmallChange LOAN TO VALUE vs. LOAN TO COST   When a sponsor goes out and buys a piece of real estate they will be financing it with two key components of capital. One is going to be debt that they’re going to get from the bank and the other is going to be equity that they’re going to be asking you for. Debt, when it is placed on…

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Real Estate Investing Explained – Main Project Costs

Real Estate Investing Explained With Support from SmallChange MAIN PROJECT COSTS   In this episode talk about the TOTAL COSTS that are inherent in any real estate project. There are basically three main categories; acquisition costs, hard costs, and soft costs. Acquisition costs would be the purchase of a piece of land or an existing building, hard costs include the physical costs of construction or renovation, and soft costs are costs like design services, architectural,…

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Real Estate Investing Explained – Internal Rate of Return I

Real Estate Investing Explained With Support from SmallChange INTERNAL RATE OF RETURN I   In real estate, the acronym ‘IRR’ stands for the Internal Rate of Return and it is commonly used by sponsors to illustrate how strong their project is going to be by projecting out in time how much they predict the project is going to make. But what is the IRR exactly and what are the pros and cons of using it?…

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Real Estate Investing Explained – Internal Rate of Return II

Real Estate Investing Explained With Support from SmallChange INTERNAL RATE OF RETURN II   In this episode on IRR, you are going to learn how to use this incredibly complicated and difficult to understand concept really easily in order to be able to compare one deal against another and, also how to compare one sponsor against another. You will see how to understand how much a sponsor is taking out of the project and how…

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Real Estate Investing Explained – NOI

Real Estate Investing Explained With Support from SmallChange NET OPERATING INCOME – NOI   In this episode you will learn about the NET OPERATING INCOME which is probably the most important number of any that you’re going to find in a real estate deal. Why? Because it effectively defines ongoing profits that come from a building and in so doing drives everything else. Be sure to click the link below where you can get a…

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