Freedom Notes vs a REIT

A REIT trades every single day, and when the market panics, it panics with it. Your quarterly distribution? Gone. FreedomNotes doesn't know what day it is on Wall Street. I get this question a lot. What's the difference between FreedomNotes and a REIT? Aren't they both real estate investments? Well, they're both real estate adjacent, and that's about where the similarity ends. Let me walk you through the real differences, because I think this comparison is very important to know and understand before you decide which one belongs in your portfolio. A REIT is a real estate investment trust, and it's publicly traded company that owns or finances real estate. It trades on stock exchanges the same way individual stocks do. You can buy shares for as little as a few dollars through any brokerage account. You get dividends, meaning regular income payments, and you can sell your shares any trading day you want. That accessibility is the first thing most people like about REITs. Low minimums, liquid. But here's what comes with it. Your investment is subject to market volatility, meaning how much the investment's value swings up and down, and not the volatility of the underlying real estate, but the volatility of what the stock market decides to do that day. That means you can do everything right, choose a well-managed REIT invested in solid properties with good fundamentals, and still watch your investment drop 20% in a month. Because of a Federal Reserve announcement or a news event that spooked the broader market. With FreedomNotes, there's no market price. Your investment doesn't fluctuate day to day. You put in capital at a fixed return, meaning we tell you exactly what you're going to earn before you invest a single dollar, and that return doesn't change based on what the market does. Second difference: transparency. When you invest in a REIT, you typically don't know exactly which properties are in the portfolio. How each one is performing, or what the specific business plan is for each asset. You're buying a share of a large complex entity that operates like a corporation. With FreedomNotes, you know our portfolio. We publish it. You can ask us about specific properties. You can talk to our team about what we own, what we're doing with it, and how it's performing. That level of access matters, and it's part of what we mean when we say we get real with our investors. Third, fees. Public REITs have management fees, administrative fees, and sales loads in some cases. These are built into the structure and reduce your effective return, often in ways that aren't immediately visible on the surface. With FreedomNotes, your return is your return. It's stated clearly before you invest, and there are no hidden layers eating into it. Fourth, alignment. In a large publicly traded REIT, management's interest and shareholder interest can diverge with incentives around fund size or compensation that doesn't always point in the same direction as your return. Flip and I invest our own capital alongside every investor. We don't have a version of success where our investors lose and we win. If you take a loss, we take a loss. The standard we set for ourselves is to take the loss before we let our investors take the loss. And that standard has held for 18 years. The alignment is real, and it's one of the most important differences between what we do and what a publicly traded vehicle can offer. Now, what are the trade-offs of FreedomNotes compared to a REIT? Because I'm not going to pretend there aren't any. Liquidity, meaning how easily and quickly you can get your money back. REITs are highly liquid. You can sell your shares any trading day. FreedomNotes have a 12-month term and restricted early exit. If you need your money in 6 months, FreedomNotes is not the right fit, and I'll tell you that directly. Minimums. REITs have very low investment minimums, sometimes just a few dollars. FreedomNotes start at $25,000. That's not accessible for everyone, and that's okay. And Accreditation. Freedom Notes require accredited investor status, meaning you meet SEC income or net worth thresholds that qualify you to invest in private offerings. REITs are available to all investors. So here's how I'd summarize it. If you want maximum liquidity and you're comfortable with market volatility, a REIT may be appropriate for part of your portfolio. If you want a fixed predictable return backed by real assets with full transparency and genuine alignment, and you have capital you don't need to touch for 12 months, FreedomNotes is built for you. Two different tools, two different purposes. The question is what your capital needs to do for you. In one of our next videos, we compare FreedomNotes to bonds. Same idea of fixed income, very different structures and risk profiles. I hope this was helpful, and I hope we have the opportunity to work together. Head over to chatwithfreedom.com and let's talk.