2. Unit 9: Real Estate Investments
• Investing in Real Estate
▫ Types of Investors
Investor Motivation
Investor Profile
Yield Expectations
Risk Tolerance
▫ Risk/Return Balance
• Investment Criteria
▫ Characteristics of Real Estate Investments
▫ Comparing Investments
3. Unit 9: Real Estate Investments
• Pros and Cons of Investing in Real Estate
▫ Advantages of Investing in Real Estate
Equity Buildup
Appreciation
Cash Flow
Tax Benefits
Depreciation
Capital Gains
Installment Sale
1031 Tax-Deferred Exchange
Increased Leverage
4. Unit 9: Real Estate Investments
• Pros and Cons of Investing in Real Estate
▫ Disadvantages of Investing in Real Estate
Illiquidity and Immobility
Large Initial Investment and Transaction Costs
Imperfect Market
Increased Burden of Management
Tax Burdens
Government Interference
Economic Downturns
5. Unit 9: Real Estate Investments
• Real Estate Investment Syndicates, Trusts, and
Conduits
▫ Real Estate Investment Syndicates
Structure of Syndicates
Types of Investment Opportunities
Raw Land
New Construction
Existing Property
Government-Assisted Housing
Historical Rehabilitation
6. Unit 9: Real Estate Investments
• Real Estate Investment Syndicates, Trusts, and
Conduits
▫ Real Estate Investment Syndicates
Structure of Syndicates
Types of Investment Opportunities
Raw Land
New Construction
Existing Property
Government-Assisted Housing
Historical Rehabilitation
7. Unit 9: Real Estate Investments
• Real Estate Investment Syndicates, Trusts, and
Conduits
▫ Real Estate Investment Trusts (REITs)
Characteristics of REITs
Capital Structure of REITs
The REIT Tax Status
▫ How REITs Avoid Taxation at the Trust Level
▫ Taxation to Unitholders
Analyzing REITs
▫ Real Estate Mortgage Investment Conduits
Advantages of REMICs
Limitations of REMICs