Got a question from someone that asked if a REIT is really real estate
investing? Real estate investment trusts, is it really investing? We're going to
explore that today.
Okay, so I got this question from one of you that said, "okay Kris, there's this
other way of doing real estate out there, it's called a REIT. A real estate
investment trust. Why do you not consider that real estate investing? Let's dive in
and talk about that today. So first of all, for just a moment, when you think of
real estate investing, it's you using either money or credit or someone else's
and going out and buying a property and right now you own that. It's titled to
you and so I think you kind of have a concept for what that is. What some
people have done is, they put together a REIT. A real estate investment trust and
it's like the stock market of REIT. A company will go out there and basically
say, "do we know how to do real estate? Give us your money and we'll do all the
real estate and we'll take this whole big batch group of it and then we'll cut
you back some of the dividends." Now, the concept of a REIT is not a bad idea
by the way. But I do want you to understand that often when you include
other companies of that level, a lot of them are just trying to make you 5 or 10
or 15% here on your money and you know, that's fantastic. That's really good
money. I know though, that if you personally own real estate, there is a
possibility of doing better than that. So in general what I would share is that
if you are committed to becoming a really good real estate investor, you can
probably outperform a REIT. If you think that you suck with numbers and you're
not really going to put in the time and effort and you're kind of lulled by the
financial possibility but not really going to back it up with work. There's a
chance that a REIT could be a better option for you. In the end, it all comes
down to hand-holding. When I put my company together, I said well we could be
a REIT but I don't want to instead, you know I know a lot of people are kind of
wedged in between. If I was going to do and put my whole heart into it, could be good
if I give it to a REIT. I'll make less money but they'll put their heart and
soul into it. I created a hybrid where actually I
could just do it for you. Let you make all of the money. It's kind of one of the
cool options that I innovated 10 years ago in a real estate industry. So I guess
at the end of the day, I always like to fight for the little guy because I feel
like I'm the little guy right? I didn't come into this world with
any money. You know even though I absolutely loved my parents you know,
there's no inheritance or massive amount of money. I started my life, my married
life in debt and trying to figure out how to figure this whole thing
out and it's been really empowering for me to own real estate. Now that has come
with risk and speaking to the credit of a REIT, if they do good deals and bad
deals, you get the average of all of that, which can totally be a good thing for
you know a lot of times. If you don't put the right effort and due diligence
or just sink your teeth into the wrong deal. So you could risk the farm. You
could lose it all. And people do. Which is why I think it's so important. Let me
give you some ultimate advice on which direction and maybe consider if you're
going to go with a REIT. It's because ultimately, you really want to give your
money to someone else and empower them to do it for you and you'll hope that
they do it well and you can look at their earnings and their track record
and see if that's a good fit for you. And for some of you, that really would be an
awesome way to go. If you're interested in doing real estate and making even
more of the profit, doing it more creatively, doing deals that don't even
require money and credit, then you want to do it on your own versus a REIT
because REITs not going to do that. However, if you'd go that way,
do yourself a favor. Get a mentor, get a system, get hands-on help. If you have
that, you're going to be way more successful in the real estate arena. So
at the end of the day friends, that's the story on REIT. Is it really real estate
investing? Is it just giving your money to a stock company that does the real
estate investing? You don't really have any title or ownership but you can make
great money. It can be truly passive or you can get your hands dirty, work with a
team of experts or do yourself and have at least a chance probably of
making even more money, but also have some greater risk. Choice is yours. If you
want to know some of your most profitable options for investing in real
estate, head over the website and let me and my team take you on a test drive
through some of the most profitable approaches to doing real estate.