How to Invest in Real Estate Investment Trusts (REITS ) Today!

Literally some of the most powerful, biggest funds on planet Earth launched a product to help regular people like me and you get into real estate, which is kind of cool, I thought. Welcome back to the show, people. Today we're going to talk about how to invest into real estate investment trusts, or REITs as they're called, how they compare against private equity real estate funds, or just buying real estate on your own, and how actually regular people like me and you can invest into REITs for less than $30 a share. Now, investing into real estate is a core of most people's portfolios. Most millionaires around the world are made millionaires because of real estate. Real estate. Now down here to the whiteboard of truth and justice, we've got—I've driven drawn out a beautiful triangle of what I would call three different pillars or a triangle of where you can invest into real estate. So up top here, we have our personal real estate. That's what you hold personally. That could be your house. It could be rental properties, crossboards, stuff that you personally control. Now down here at the bottom, this is where you essentially are hiring out other people to invest for you. Over here on the right, we have private real estate funds. On this channel, actually, we have tons of video about how to launch your own real estate fund, how to actually do. This, and most of them are privately held. Over here today, we're going to talk more about these REITs, real estate investment trusts, or public real estate that you can invest into. Now, what's unique on this triangle, obviously personal real estate, you need to put up usually a lot of cash, hundreds of thousands of dollars to put a down payment on a property to get in. Now, there's a lot of people on YouTube that talk about zero money down, etc., but personal real estate, you got to put a decent amount of money into it and you've got to manage and control these properties yourself or hire and manage a management company, which can be a headache. Just so you know, I own 3 properties personally right now. Okay, so I'm in this space. Additionally, though, I have also invested into down here on the right, 2 private equity funds into real estate. Now, private equity funds typically are going to have a minimum commitment of maybe $100,000 to $250,000 that you minimum put into these funds. I'm in 2 of them. Both are $250,000 actually, and one buys multifamily and one buys commercial office buildings. What's nice about these is I don't have to do a thing. They manage everything all year. At the end of the year, I just get my tax K-1 and I just file taxes and that's it. They manage everything. There's no headache, which is freaking awesome. Now, a lot of people though listening to this call, man, I don't have $100 grand to go buy a property right now. I don't have $250,000 to invest into a real estate fund. What are my other options? Well, ta-da, boom, bada-bing, we got this great other corner here called— we're gonna talk more about today— REITs and even public real estate funds. So how do these types of products actually work? Both on the private real estate fund side and the REIT side of things. Both of them operate with something like this, a pool of money. People like me and you put money into these pools. Sometimes it's large amounts of money. Actually, on REITs, you can get into these pools for like $30. I mean, pretty low cost to get in. You put money in the pool, they use that pool of money to go buy a handful of different properties. All these lines right here, they're very beautifully drawn, represent properties That the fund buys. When the properties make money, the properties flow, the money flows back to the pool, and then they pay back the investors, me and you, with a return. And the managers take a little bit of money as well for managing the property. It's typically how all these work. Now, one of the biggest differentiators between a private real estate fund and a public REIT are rules around them. So private real estate funds, this, these managers can kind of do whatever they want with these properties. So they can upgrade or they don't have to pay back investors initially. They can put more money in, they can build in their pool, they can like do value add. They can do a lot of stuff in here. They have more what's called discretion over the portfolio and the payouts. On the REIT side or public real estate offerings, they're usually more controlled. Example is for REITs, by law to be a REIT, you have to pay out 90% of all income that comes in, like rents that come in every month, etc. Has to be paid back to your investor base, which is kind of cool. So as an investor, you know, if you're putting in $30 or $300 or $3,000, 90% of the rent that is put back here is actually being paid back to the pool and then paying what's called pro rata or just your distribution of that back to how many shares you control of that REIT. So right now, if you don't own a property or any exposure to real estate, the smartest people in the world have exposure to real estate. Most millionaires are made from real estate. You need something. I would, I would say I'm not getting financial advice, but at least for me, I need something in real estate. REIT or one of these public type of real estate offerings is a pretty cool way to do this. Now, breaking this down even further, you can literally just open up a brokerage account. There are public type of offerings and sometimes more private or semi-private offerings. The public ones, you can literally just have a brokerage account and go buy their ticker. So right here on NerdWallet, they have some of the best performing REITs as of April 2023. They have symbol GTY, CTRE, SBC, VICI, and you can see their returns over here. 26% return, 1-year performance 19%, 19%, and 17%. I mean, it's not too bad. And price share, you can see there as well, $34 a share, $19. So you can come in and buy a handful of shares and maybe every month you keep buying shares and that's the returns that they're seeing. And it's backed by real estate, which is pretty cool. It's a lot harder, in my opinion, to lose on real estate versus other asset classes. So again, you could just open up a brokerage account today through Wells Fargo or TD Ameritrade or E-Trade, whatever one you want to use, Interactive Brokers, and go buy the ticker, any of these tickers, and all of a sudden you're in a REIT. That is paying out 90% of the rent rolls back to you there. Now additionally, there are some on the more private side. A great example is actually Blackstone. So Blackstone is one of the largest private equity and real estate holders in the world. They are massive. They have a REIT. So it's called the BREIT. They kind of see how they did that. BREIT, Blackstone Real Estate Investment Trust. BREIT. It's kind of cool. Anyways, I digress. I thought it was a cool name, but here they are. You have to log in. Here's their returns right here on their page. 17.5%, 3 years annualized return. Pretty cool annualized distribution rate of 4.5%. Now, when you go up to that Contact Us button there, you actually have to work through a broker to go and contact them. Price per share is about $2,500 minimum commitment to get into one of these offerings. Literally some of the most powerful, biggest funds on planet Earth launched a product to help regular people like me and you get into real estate, which is kind of cool, I thought. So again, there's the ins and outs of a real estate investment trust versus private real estate funds. Personally, I like having a little bit of exposure to all 3 of these circles. But again, if you guys want to subscribe down below, like this video, that helps out the algorithms, whatever. And then check out other videos on our channel. We go very in-depth on how real estate funds work, how they're put together, how to find money, how to raise money, the whole 9 yards. You guys are amazing. See you in the next video. Bye.