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01-28-2015, 08:42 AM
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#1
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Confused about dryer sheets
Join Date: Jan 2015
Posts: 7
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REIT
Financial Adviser is pushing me to buy a REIT, specifically CNL Healthcare Properties, which is non-traded.
Aren't non-traded much riskier than traded?
And would advisor be pushing due to huge commision?
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01-28-2015, 08:46 AM
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#2
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Moderator Emeritus
Join Date: Apr 2011
Location: Conroe, Texas
Posts: 18,731
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Quote:
Originally Posted by Silverlocks
Financial Adviser is pushing me to buy a REIT, specifically CNL Healthcare Properties, which is non-traded.
Aren't non-traded much riskier than traded?
And would advisor be pushing due to huge commision?
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Welcome to the forum.
Answer: Yes to both.
__________________
*********Go Yankees!*********
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01-28-2015, 08:52 AM
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#3
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Thinks s/he gets paid by the post
Join Date: Mar 2006
Location: Houston
Posts: 4,337
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Quote:
Originally Posted by aja8888
Welcome to the forum.
Answer: Yes to both.
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+1
Non-traded REITs are right up there with variable annuities.
If you buy one, the managing partner gets to decide when and how much money to give you back. There is little or no transparency. It's next to impossilbe for an individual holder to ever really see what's going on or have any control. Most private REITs I've seen are also for single buildings so diversification is also lost.
Run as fast as possible from this FA.
You can buy highly liquid, publicly traded REITs or a Vanguard REIT fund. This is a better, safer way to put this asset class in your portfolio.
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
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01-28-2015, 08:56 AM
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#4
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Thinks s/he gets paid by the post
Join Date: Nov 2012
Location: Madeira Beach Fl
Posts: 1,403
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I think you would be better off with ETF symbol of RWX.
__________________
_______________________________________________
"A man is a success if he gets up in the morning and goes to bed at night and in between does what he wants to do" --Bob Dylan.
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01-28-2015, 09:35 AM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2004
Location: Portland, Oregon
Posts: 7,113
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REITs have been hot this last year.
Take a look at the holdings of any REIT fund, some hold a lot of re mortgages. You want companies that hold real estate IMHO. I've owned O for a while but it has gotten rather expensive. Seeking Alpha website has contributors that comment on REITs. Were I you I would read that site for a while, take notes, and then decide.
__________________
Duck bjorn.
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01-28-2015, 09:52 AM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2013
Location: Limerick
Posts: 5,655
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RUN! Get rid of that FA!
Sent from my iPhone using Early Retirement Forum
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01-28-2015, 09:57 AM
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#7
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 2,610
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VNQ is a good choice also. It's the big dog in the REIT/RE sector and has a tiny expense ratio (.10)
Yield ~3.6%.
The FA
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01-28-2015, 09:59 AM
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#8
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Moderator Emeritus
Join Date: Apr 2011
Location: Conroe, Texas
Posts: 18,731
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VNQ was my best performer last year!
__________________
*********Go Yankees!*********
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01-28-2015, 10:03 AM
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#9
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2012
Posts: 11,702
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Me too. But steel your nerves. There will be some bad years. I hold it long in my IRA.
Even my relatively small holding helped raise my personal rate of return last year.
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01-28-2015, 10:06 AM
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#10
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Thinks s/he gets paid by the post
Join Date: Aug 2007
Posts: 2,873
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And for this year too, but it's too early to see if it'll stay that way.
__________________
Eat, Drink and Be Merry.
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01-28-2015, 10:08 AM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2009
Posts: 9,343
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REIT
No way. I would do it, but my dad is just cashing a nice gain on one of these broker initiated private reit investments. It just got bought out at a nice profit and he is collecting some big gains from a year or so investment.
Sent from my iPad using Tapatalk
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01-28-2015, 10:26 AM
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#12
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2008
Location: On a hill in the Pine Barrens
Posts: 9,720
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Quote:
Originally Posted by Silverlocks
Financial Adviser is pushing me to buy a REIT, specifically CNL Healthcare Properties, which is non-traded.
Aren't non-traded much riskier than traded?
And would advisor be pushing due to huge commision?
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I'd wait for the 2014 annual report, and compare to the previous years. It looks like a decent company, but you need an analysis of their numbers.
You can get healthcare REITs as an ETF, or individual holdings.
It is true that many REITs have done well recently, and hats off to the healthcare REITs especially. When a sector outperforms, though...
There is a place in some portfolios for REIT. I hold VGSLX Vanguard REIT Index Fund Admiral Shares in my Roth-IRA. The return for 2014 was a bit over 30%. How would this compare to your interest from CNL?
If you want to see deep analysis of REITs, check out some of this guy's articles:
Brad Thomas | Seeking Alpha
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01-28-2015, 10:27 AM
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#13
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Thinks s/he gets paid by the post
Join Date: Jul 2012
Location: Texas
Posts: 3,024
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I also own VNQ, which is up 40% last 12 months, and yields 3.6% with an ER of 0.10%. I'm a big advocate of real estate as an alternative holding right now. But I would never buy into a private REIT. Too many cheaper and more liquid ways to participate. My guess is your so-called "financial adviser" will be the primary beneficiary in this deal.
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Retired at 52 in July 2013. On to better things...
AA: 85/15 WR: 2.7% SI: 2 pensions, SS later
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01-28-2015, 10:56 AM
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#14
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 14,183
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I've held IGR for years. The div is good, and, being relatively volatile, just trading in and out with a 10% band has resulted in a lot of the gains.
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Have Funds, Will Retire
...not doing anything of true substance...
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01-28-2015, 11:15 AM
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#15
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Thinks s/he gets paid by the post
Join Date: Feb 2014
Posts: 3,083
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From the Prospectus:
-----------------
We will apply the reduced selling price per share and selling commissions to the incremental shares within the indicated range only. Thus, for example, a total subscription amount of $1,250,000 would result in the purchase of 119,599.173 shares at a weighted average purchase price of $10.452 per share as shown below:
• $500,000 at $10.580 per share = 47,258.979 shares (7% selling commission + 3% marketing support fee);
• $250,000 at $10.474 per share = 23,868.171 shares (6% selling commission + 3% marketing support fee);
• $250,000 at $10.368 per share = 24,111.724 shares (5% selling commission + 3% marketing support fee);
and
• $250,000 at $10.263 per share = 24,360.299 shares (4% selling commission + 3% marketing support fee)
-------------------
10% right off the top for fees and marketing?? I would run from this and fire the FA.
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01-28-2015, 12:23 PM
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#16
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Thinks s/he gets paid by the post
Join Date: Jul 2005
Posts: 4,366
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I use VNQ for domestic and RWX for international.
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01-28-2015, 02:07 PM
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#18
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 2,610
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A pretty good REIT article that contains a few useful factoids.
Among other things, the author recommends using a mutual fund to hold REITs and specifically mentions Vanguard.
10 things you need to know about REITs - MarketWatch
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01-28-2015, 03:30 PM
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#19
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2012
Posts: 11,702
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Quote:
Originally Posted by JPatrick
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GOOD short article that brings up many excellent points. Two things hit home for me:
1) Short term volatility. Like I said earlier, I'm standing proud this year for my great personal return, due partially to the REIT exposure. But you should have talked to me in 2008. I darn near threw in the towel, but I'm glad I kept my head.
2) Taxes. Ugh. I find REITs funds can cause tax headaches primarily because of revisions to 1099s. I now keep my REIT funds in my IRA to avoid all the tax madness. And private REITs are worse for tax time.
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01-28-2015, 04:04 PM
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#20
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Confused about dryer sheets
Join Date: Jan 2015
Posts: 7
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Thanks for all of the great tips!
I left Fidelity in Nov and went with LPL Financial. So far, nothing they have suggested has made any sense. I think it is time I head back to Fidelity, and look into Van Guard some more.
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