So today we are going to talk about REITs and how they work and if its worth and also which one I invest in and why.

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1. What is a REITs
– A REITs is a Real Estate Investing Trust
– And it allows you to invest with other people in real estate
– That most likely you would have a hard time investing in by yourself.

Now here the details:
– A REITs is basically a company that pulls in money from investors
– And allow the investors to grow their money and also eran dividend from real estate
– Without having to buy real estate or manage it themselves.
– And the properties can range from towers to hotels and even warehouses.

Interesting fact guy:
– Back in the 1960s before Congress made a change and let the public be able to invest in commercial properties
– This was only reserves for the wealth only
– But today anyone with $5 or $10 can invest in it

2. Types of REITs
– And it’s important you choose correctly
– Because of the biggest problems might be liquidity
– Imagine if you invest 100k into reit, and then when times get hard you want to sell, but no one is buying ( means you’ll be stuck, so usually you want to go with publically traded REITs, there almost always a lot of demand and supple)

Three Main Types of reits:

Equity REITs: They buy income-producing real estate and use the rental income to payout dividends to us.

Mortgage REITs: They finance money to real estate owners and we get paid the interest on those loans and then split it.

Hybrid Reits: can do a combination of both equity REITs and mortgage REITs.

Btw guys:
– You know those apps like Fundraiser, and few other ones that keep coming out
– Usually, those are equity-based REITs and the big problem with them is
– That says the market goes downhill and you want to exit, you’ll have a problem selling your investments. SO be very careful, I usually recommend you buy REITs available in the public market.

3. Buying: Individual Reits or ETFs/ Index funds /Mutual Funds or even your friends or app you found

– The biggest problem with REITs can be liquidity, if you can’t sell then you’re stuck and that’s a problem you don’t want to have.
– So I’ll show you how to avoid that.

How to buy: ( ps some REITs pay our monthly but usually quarterly)
– You can buy individual REITs like AGNC ( pays out 10.39 in dividend and is also a mortgage Reits) – but it’s just one REITs and if it fails then your done.
– VNQ its ETFs that’s traded but it tracks the 35/50 real us real estate index ( which a lot safer because you’re investing into more sectors of the market) –
– And if you invest in an index fund, usually they track an index and they are not trying to beat the market like an actively held mutual fund.

Overall:
– The point is that there are several ways to invest in REITs and different types of REITs
– But the best way to limit your risk and by maximin your exposure to different sectors of the real estate market by just tracking an index

Tip: I don’t invest with small companies or the guy that my aunts know, because liquidity can be a massive issue.

4. What I own and how much
– Own VNQ by Vanguard with M1 finance

Focus on the long term.
– And lastly guys you know what I think
– When you buy ETFs or index funds and they give you diversification
– And you buy the amount every week, for dollar cost average, you’re doing things the right way

But sometimes
– The market will crash and you might be down 8-10% but you gotta know that this is a marathon and your goal is long term growth
– Overall right now my portfolio is down but the other part is up
– If I panic and sell, then is like quitting the marathon before you start.

Great Article on it: https://www.investopedia.com/terms/r/reit.asp
Thank you, James Chen

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*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I’m an Accountant but I’m not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.

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