Just returned from from Ray Lucia Show

[mathjak107]

The printout i got from online shows every year up about a 3% jump in withdrawls from bucket 1.
Am i missing something?

 

[mathjak107]

I understand. But say you are up 10% a year in your bucket 3 over 14 years. Your original $500k is now worth $2mm. So you sell in a "downturn" of 10% and you miss out on 200k, but still have lots to play with. By waiting you might have regained your $200k, or it might have dropped even further. Similarly, you might wait til you think the market is "up" only to find it continue s to rise after you divest. Just market timing, no?

I do find the bucket metaphor to be appealing psychologically, and like its long term approach. Might be easier to leave our cotton-pickin' hands off bucket 3 because buckets 1 and 2 function like giant pacifiers.

You are correct,you may cut your gains short by selling each year the market is up as opposed to waiting.But heres the problem with waiting.
We have quite a few periods in history where stocks were down extended periods of time. Actually ray found worst case scenerio required you to go out as long as 14 years to guarantee you will be ahead.You may not be up much in certain back tested time periods but you will be ahead. By taking advantage of selling and filling regulerly you always leave yourself a 14 year window in case of really bad luck.Its again more for safety than maximizing gains.

 

[mathjak107]

I never had any interest in un-listed reits which ray uses alot in bucket 2 but after taking a look at some i bought one.Turns out to be a nice investment vehicle although the ones ray promotes are to expense ladden and the dividends to low..
The unlisted reits are actually real estate partnerships. They raise a certain amount of money and then close. The one i bought is called big apple hospitality reit. It pays a sweet 8.30 % dividend,of which only 90% is taxable as being a real owner there is a depreciation figure thats figured in.plus when the property is sold in 6-7 years you share in the action.
  The reits have a fixed share price and never vary. Even on those days the market plunges and traded reits dive your reit dosnt budge.
   There is an 8% cost to get in the reit but there is no real estate anyone can buy with no closing costs. Remember this is a partnership,its not a stock that trades daily ,this is like owning real bricks and morter..
  The reit is actually like a bond on steroids ,but rember while a bond falls if inflation kicks up ,real estate goes up .
  This particular reit buys only extended stay hotels and turns them over to hilton and marriott to run and to fly the hilton and marroit flag. So far the reit i have raised about 300 million and just bought their 3rd property. It will close when a billion is reached,it just started in april. This is the 7th reit issued by apple hospitality . The others are closed and apple 2 is being broken up and sold now.
Before i committ anymore to it i want to see how the apple 2 group makes out with their distributions.

 

[Lagniappe]

The printout i got from online shows every year up about a 3% jump in withdrawls from bucket 1.
Am i missing something?

I looked at the slide show, haven't gotten a printout yet. The concept is interesting, nontheless, I just want to make sure I understand the details.

 

[brewer12345]

I never had any interest in un-listed reits which ray uses alot in bucket 2 but after taking a look at some i bought one.Turns out to be a nice investment vehicle although the ones ray promotes are to expense ladden and the dividends to low..
The unlisted reits are actually real estate partnerships. They raise a certain amount of money and then close. The one i bought is called big apple hospitality reit. It pays a sweet 8.30 % dividend,of which only 90% is taxable as being a real owner there is a depreciation figure thats figured in.plus when the property is sold in 6-7 years you share in the action.
  The reits have a fixed share price and never vary. Even on those days the market plunges and traded reits dive your reit dosnt budge.
   There is an 8% cost to get in the reit but there is no real estate anyone can buy with no closing costs. Remember this is a partnership,its not a stock that trades daily ,this is like owning real bricks and morter..
  The reit is actually like a bond on steroids ,but rember while a bond falls if inflation kicks up ,real estate goes up .
  This particular reit buys only extended stay hotels and turns them over to hilton and marriott to run and to fly the hilton and marroit flag. So far the reit i have raised about 300 million and just bought their 3rd property. It will close when a billion is reached,it just started in april. This is the 7th reit issued by apple hospitality . The others are closed and apple 2 is being broken up and sold now.
Before i committ anymore to it i want to see how the apple 2 group makes out with their distributions.

So you have an extremely illiquid investment that throws off some yield and cost you a ton to buy. It is being run by someone not subect to most securities laws, and doesn't control what it owns. Hmmm... I think I like junk bonds better.

 

[mathjak107]

Junk bonds are extremely volatile,un-listed reits arent volatile at all. In fact they dont change daily at all. BUT DO YOUR HOMEWORK!.
Make sure the reit has a good history ,good properties and read the fine print. Your not buying a stock here,you are buying real property and investagate it as best as you can. I spoke to people who have been in the other reits apple has started for years first. apple 1 had great profits distributed at the end when it was sold off.

 

[mathjak107]

unlisted reits (can only speak for the one i own)

PLUSES ,
very stable and conservative
fairly high interest rate for risk
interest paid isnt all taxable as the depreciation is passed on.
can be sold before time frame depending on reit as your shares are thrown in and go into divident reinvestment pool.
fixed buy out price which is same as buy in.
at end of time frame reit is sold and profits distributed.
value of property goes up in times of inflation where as bonds go down.
15% discount at owned marriott and hiltons.
dividends are paid on the total amount of your investment in our reit  and not reduced by the amount of the sales charges


MINUS'S

fairly illiquid depending on reit
dividends can be reduced
although the better ones stick to the fixed buy out price there is no guarantee.
there is a fee to become a partner,usually 6 -8% but far cheaper than most limited partnerships would charge you.
no strict sec regulation
unlisted reits can be not very transparent as far as what the overall deal is.

bottom line is they have there place in a conservative income generating portfolio but check it out check it out check it out....

 

[jazz4cash]

Great dialog here...............

I re-started this thread after attending Rays presentation in Philly last weekend. I never heard of an unlisted REIT before, but one of Ray's guests did a sales pitch for them. During the Q & A,, someone asked how to sell and what price would an investor receive. The answer was that they have a "float" in reserve which may be 10% of outstanding shares, per year. If investors seek to sell 20% of the outstanding shares, they might have to wait till next year to sell once the reserve float is met. There was dead silence in the room!

I am interested in learning more about unlisted reits, but that sounds like awfully hard money to me.

 

[Nords]

15% discount at owned marriott and hiltons.

Well, heck, that's what I look for in a diversified investment portfolio. You just can't get that in a small-cap value stock or a Treasury.

I think this has a place in everyone's investments-- right next to actively-managed portfolios, sales charges, annuities, gold, oil futures, currency-exchange contracts, shotgun shells, MREs, and beaver che3se warrants...

 

[mathjak107]

Problem with most of us is as soon as we see or hear of something thats unconventional we turn negative on it. As soon as we see a charge we shun it and there is lots of very good investments out there that we tend to bypass. All unlisted reits are very different from each other just as funds are.As an example you can sell your stake in the apple reits at anytime except the first year and get every penny back. They merely go into the pool for purchase by all the reinvested dividends. A year or 2 ago if you were fortunate enough to be in one of the better ones you got a nice fat yearly dividend of 7% with almost no risk and no volatility while bonds were below 3% and money markets were below 1%. Today thats been raised to 8.30%
   How many of us would have paid a 1% a year charge to get back 7% ?  Plus a profit at the end when sold. Had i known about these i would have jumped at the chance. Since we are talking a very very low  risk investment  comparing them to corporate bonds is almost a no brainer. WE all have to keep an open mind to things outside the box and to what we are comfortable with but dont shut things out that you dont yet have knowledge of as you can miss some pretty cool  profitable stuff.

 

[mathjak107]

Those unlisted reits they promote at rays seminars are awful i looked into them when i researched the bunch.. Yep they are hard to get out of ,they pay a low 6% and the worst part is the fees and loads which can eat you alive.He promotes 3 different ones and all 3 are just as bad a deal. The world of untraded reits is no different than the world of traded funds and variable annuities . You got some real  sucker deals out there.  But you also got some real quality stuff too and you need to do your homework.

 

[Nords]

Problem with most of us is as soon as we see or hear of something thats unconventional we turn negative on it.

Mathjak, I'm not negative on the quality of your REIT.

I'm negative on the quality of the thinking of anyone who'd buy an investment for a lodging discount.

 

[Brat]

Several years ago my seat-mate on a flight was an employee of Realty Income Corp ("O").  He spoke highly of the quality of their assetts and leasees. Its present yeild is 6.14%. 

That type of investment makes more sense to me than a non-traded realestate partnership.  I remember realestate partnerships being hyped in the 70s as 'sure deals.'  That alone makes me shy away.

 

[mathjak107]

Mathjak, I'm not negative on the quality of your REIT.

I'm negative on the quality of the thinking of anyone who'd buy an investment for a lodging discount.

,
Gee thats why i bought it ha ha ha

We have soooooo many scams and poor choices out there in every investment area.At least if your going to get a bad investment deal get a room discount.