REITs finally taking a dive??

[mathjak107]

im more than happy with the apple hospitality reits.

becareful some are nothing more than feeing you to death.

[Texas Proud]

Quote:

Originally Posted by CMAN Is anyone on the forum familiar with non-traded REITS? These are advocated by Ray Lucia on his show. His claim is that they will create an income stream (between 6 and 8 percent) with little market fluctuation.

That is a stupid statement....

it is not tradeable, so little market fluctuation means it does not get repriced like all the others, BUT IT REALLY DOES... if the market value of the assets goes down, the value of you REIT goes down... you just don't know it has... because you can not readily see it listed on an exchange.. but go and try to sell prior to the end and then tell me there is no fluctuation...

[mathjak107]

its not nearly as volatile though as the swings of reit stocks. stocks swing wildly more from perception of what will be than what is. the unlisted reits pay around 8-1/2% and in 7 years when its sold what you get will be based on the actual value of the sale.

[Spanky]

They lack liquidity and must be sold to the REIT company itself. Since REIT NAV generally fluctuates less than market price, the lack of liquidity may mitigate volatility in price. However, if you have to sell during a market downturn, the buyer may offer a price significantly discounted from the NAV.

[CMAN]

Thanks mathjak107,


That is my understanding. I am not seeing the wide swings that you see in traded REITS.

[mathjak107]

Quote:

Originally Posted by Spanky They lack liquidity and must be sold to the REIT company itself. Since REIT NAV generally fluctuates less than market price, the lack of liquidity may mitigate volatility in price. However, if you have to sell during a market downturn, the buyer may offer a price significantly discounted from the NAV.

i would not reccomend doing it unless you plan on holding the full 6 or 7 years until the properties are sold.

[mathjak107]

i can only vouch for the one i use which is apple hospitality , i did look at some others but the fees were rediculous.

[Sam]

What is apple hospitality?

[mathjak107]

http://www.applehospitality.com/investors/index.php

[Sam]

Thanks. I looked but could find a stock symbol for it. Any idea?

[mathjak107]

there isnt a symbol for it, its un-traded. thats the beauty of it.

[Sam]

Thanks again. So how does one buy it?

[mathjak107]

its bought thru david lerner

[Spanky]

Quote:

Originally Posted by mathjak107 i would not reccomend doing it unless you plan on holding the full 6 or 7 years until the properties are sold.

I tend to agree. "un-traded REITS" are illiquid and expensive but do not provide any significant advantages.

[mathjak107]

thats where you are so wrong my friend. we collected 7to 8-1/2% interest for the last 7 years. thats in a world ranging from less than 1% to between 4-5% in bonds cd's mm . only 80% is taxable too as you get to share in the actual depreciation. the properties apple 2 had was just sold off and with the gains we got a total return per year of 17.5 % for 7 years . all with next to no risk a fixed 10.00 per share price if we want to sell early, it just goes in the reinvestment pool and no wild daily swings.

if thats not an advantage for a conservative income producing proxy for a bond on steriods then ill eat my hat.,

we arent talking stock risk or volatilty we are talking quality bond like risk.. all properties are extended stay hiltons and marriotts only

apple vii pays 8-1/2% right now and will be closed when it hits 1 billion. we are about 3/4 of the way there now

unlike buying bonds inflation protection is built in. what happens to real estate during inflation? it usually goes up while bonds tank.

all for a cost of a buy in 0f 6%. like i said try buying commercial real eestate directly and see what the buy in costs you. as a bonus you get the 8-1/2% on the full investment amount not on the amount after the 6% is subtracted too.

[Spanky]

mathjak107,
I must say this is a good deal.

Spanky

[mathjak107]

i was sooooo sceptacal at first too. being from the savy school that said "what me pay a 6% buy in?


on the advice of some other savy investors i took a look and looked to poke holes every where. it was tough because as you know these things arent very transparent but heck i bought worst investments in my life. with cd's and money markets at near record lows of !% i said hell i cant do worse even if i collect 7% for 7 years and get my 10 bucks a share back when sold.


it turned out better than i ever imagined and i bought into the new apple vii which is only about 14 monts old and already owns a nice collection of marroitts and hiltons.


wells reits looked very expensive to me ,so do your homework.

[cute fuzzy bunny]

Quote:

Originally Posted by Spanky I must say this is a good deal.

Which means, yet again, that theres something we probably dont know. Wait for the other shoe to drop...

[mathjak107]

well i had a lot worse shoes drop then these. actually i combine them with publically traded reits too. but since public reits are still stocks first they go in my stock bucket. un-listed reits are more like bonds so they go in my income bucket.

[JustCurious]

Quote:

Originally Posted by chinaco I noticed that mine was down. Oh well, wait for the carnage to finish and pick some up cheap!

Can you please let me know exactly when that happens.