Types and Composition of Real Estate Investment Trust (REITs)

REIT (Real Estate Investment Trust) as mentioned in an earlier post Introduction to Real Estate Investment Trust (REIT): A derivative of Real Estate

Classification of REITs by Nature of REIT Investment

Equity REIT: The primary nature of the investment fund is to pool funds to purchase real estate properties. These are REITs grants investors ownership rights to the real estate properties purchased. As a result all income, proceeds and sale of such properties are distributed among investors.

Mortgage REIT: Mortgage REITs lend money to prospective real estate property owners. Their primary source of revenue come from the interest from the loans/mortgage backed securities. Investors here don't have any form of ownership in the property, the only benefit from the income stream emanating from the principal and interest repayments. The operation and management of these properties still falls in the hands of the would be hope owners.

Hybrid REIT: This REIT is a portfolio comprising of equity and mortgage REITs. They give you the combined benefits equity and mortgage REITs and naturally serve as a diversified investment.

Fig 1: Chart showing a comparison of returns between mortgage REIT and Equity REIT

Classification of REITs by Regulation and Visibility

Publicly Traded REITs: These REITs are listed on a public securities exchange. They are traded at a price and can the ownership of the REITs can easily exchange hands. The frequent selling and buying of these traded REITs induces fluctuates that allows investors to profit from capital appreciation and loss of its loss in value. Companies operating such REITs are are monitored by the Securities Exchange Commission (SEC) and thus follow all regulations required from the exchange for being listed in the exchange. Such as quarterly reports, audits etc. Such reports are utilized by investors to use to evaluate the REIT and forecast the future value of the REIT. A list of REITs listed stocks on Nasdaq can be found here The Complete List of REITs Stocks Trading on NASDAQ. If you are looking to examine the performance of the index look here.

Public Non-Traded REITs: Non-traded REITs are also regulated by SEC however they are not listed on a securities exchange. Because of its low visibility, the number of investors that buy and sell this REITs are few which reduces the liquidity(how easily they are sold) of the REIT, and reduces its fluctuation in price. An investor looking to trade this REITs should expect capital appreciation only from the liquidation(sale) of real estate properties owned by the REIT companies. It is recommended to do a careful review before trading this REITs.

Private REITs: Private REITs have no public visibility neither are the regulated by SEC. They just adhere to the requirements and guidelines needed to operate a REIT in a country. Not everyone can invest in this REIT. Any investor interested in this REIT will have to contact such companies before they can make investments.



Conclusion
The assortments and varieties offered by REITs allows for different rankings and ratings for risk. It allows investors to invest with a relatively low capital as compared to a conventional real estate Investments. As visibility reduces transparency reduces but that doesn't translate to more riskier investments per say. Whatever your preference might be always aim to invest in what you are comfortable with.

Introduction A MUST KNOW Real Estate Investment Trust (REIT): A derivative of Real Estate

REIT which stands for Real Estate Investment Trust is a derivative of Real Estate Investments. It is an investment that pools funds from several investments and uses the proceeds to buy income earning Real Estate Properties. Dividends accounting for about 90% of the income from the rents are then paid out to the investors at a specified interval. REITs do exist as in various forms, they can exist as equity, mortgage, hybrid, public traded, public non traded. see details about the types in this post Types and Composition of REITs. examples of Stock Exchange listed REITs you can buy Equinox inc, SBA Communications Corp


The following are the benefits investors are going to get by investing in REITs

Diversification:  REITs provides investments with vast array of diversification opportunities. The do so through the following means;

• They distribute its real estate investments over geographical area by buying real estate investments from different countries, states regions. Diversification also occurs as they own real estate investments in different sectors of the economy.
• Their investments exists as debts and ownership real estate opportunities. Because REITs can exist as Equity and as Mortgage investments. The legal implication of this is important because debt instruments have higher payment priority over ownership during an insolvency. 
• They show little or no correlation between stocks. Correlated investments tend to be affected by the same factors in the case of an economic downturn. The non correlated nature of these investment alternative help ensure that in a scenario of a stock market crash, your REIT investments are likely not going to be affected.

Dividends: The income stream from REITs fall in the high category this is especially true Stock exchange-listed REITs. Investors can expect a steady income from from this investments. As a matter of fact is accounts for over 29% of public and private pension plans and 401(k)s account. The dividends are also stable hence, an investor can easily project and plan his/her finance.

Fig 1:Chart showing dividend yield from 1972 to present

Fig 2: Chart showing the capital raised and dividends paid to REIT investors

Liquidity: Unlike traditional real estate investments, Stock exchange-listed REIT listed shares can be easily bought and sold.

Performance: Over most long-term horizons, stock exchange-listed REIT returns have been known to outperform the S&P 500. They have been averaging a return 9-10% return which is slightly higher than the 7% average of the S&P 500.

Fig 3: Chart showing mall REIT returns for the last three years

Transparency: The listing of Stock exchange REITs provides transparency on the operation of the underlying companies investing in Real Estate as the are required to follow the regulations of the Stock exchange such as Financial statement reporting, Financial Audits etc.

Potential Inflation Hedge:  REITs also provides some form of hedge against inflation as rents tend to increase with inflation. This is very useful if you have other assets that are vulnerable to rapid inflation increase.

Professional Management:  You get the privilege of having professional manage your investment when you invest in REIT. More so, you can access the quality and experience of the management before even making a decision as the underlying management managing a REIT can be seen easily in the reports filed quarterly by the companies on the exchange market.


How to Purchase REITs
Investors can easily invest in Stock Exchange Listed REITs, Mutual Fund REITs, Exchange Trade Fund REITs etc.Public non listed REITs and private REITs can also been invested in by contacting the companies offering them. If you are finding it difficult to find a suitable REIT there Investment Advisors/brokers can help analyze and select an appropriate REIT for you.

Minimum Capital Required for REITs Investments
The unit share price of a REIT determines its minimum Capital. Shares are sold in units and a minimum of 1000 units is said to be required to buy a share. Hence, an investor can determine how much to invest by multiplying the share price by the minimum number of units. For example if the price of a REIT is $1.2 the minimum capital required will be 1.2x1000= $1200.


Calculating Return for REITs

REIT’s yields can be calculated using the Distribution per Unit for instance $0.04. An investor may receive a payout every six months, so over one year, he would get an annualized Distribution per Unit of ($0.04x 2) = $0.08

Hence for a REIT of $1.10 per share. The yield will be $0.08 / $1.10 = 7.2%


Conclusion
REITs provide a nice investment alternatives for investors who are interested in real estate but don't want the hassles and rigors involved in selecting and managing real estate. Given the steady nature of their income and they fact that they are very liquid I don't know why any investor would not want to have an investment

Why you must Invest in Bonds. (Recommended Bonds below post)

The bond market is a very nice investment. During a market crash a lot of investors do run to bonds as they become a safe haven from the uncertainty in the economic downturn. As a return their prices tends to rise in such periods. Bonds are traditionally money market debt instruments. Debt in the sense that the issuer of the bond normally issues a bond to raise funds for a project or function. Most bonds are issued at a specified interest rate to the holder of the bond until the end of a specified period(maturity period) after which the principal will be paid.

Bonds could be issued by government or corporate bodies.  Those issued by the federal government and state are called treasury bonds and municipal bonds respectively. Those issued by corporate bodies are known as corporate bonds.

The interest on a bond are known as coupons and are usually quoted annually both issued semi-annually          

The image below shows the typical cash flow from a bond. The bond is bought at a discount a discount of %15 at the price of $8500 a coupon of 400 was paid every six months until the end of the maturity period when the face value of $100,00 is paid plus the $400 for the final half of the year.

                                                                                                                                          

The total yield for a bond held till maturity period is given by the mathematical formula.                                             

Where

Face Value = the price at which a bond will be redeemed at maturity

 Years to Maturity = is the number of years taken for bond to be redeemed.

Price= is the Current value of the bond in the Market

Common Behaviors, Types of and Nature Bonds You MUST Know

Riskier Bonds have higher coupon

Bond issuers tend to increase interest rates to attract investors to their bonds. They do this to compensate for the higher risk of defaulting payment(being unable to repay the investor his capital). Credit rating agencies exist because of this, Moody’s, Standard and Poor’s and Fitch being the big three. AAA is the highest credit rating, while anything lower than a BBB- is considered a  ‘junk’ bond or “high yield bond”.  Other credit rating agencies rating may choose to rate these companies or investments in terms of A++, A+ A , A- etc. Kindly note just because a issuer of a bond (company or country) has A BBB- does not mean that that a company will be unable to pay back the loan it just means they are not in a good financial situation. Your ability to weigh risk and returns can help you make a lot of money.

Central Bank's Interest rates affects the value of the price and yield of a bond

When the central bank of a nation increases their interest rates, the new bonds which will be issued and loans generally in the country will tend to be given at a higher interest rate. This makes investors begin to ask themselves why they should hold their bonds with lower interest rates for such a long period when they can get a bond that pay a higher interest rate within the same period?. The result is that they begin to sell their bonds to buy ones with higher interest rates. This selling of existing bonds and buying of newer ones causes the price of existing bonds to fall and the price of new ones to rise. As a result of this behavior the prices of bonds tend to fall as interest rates rise of a country rise. They are many banks and investors that make a lot of money from anticipating this interest changes.

Bonds can be issued at a discount or premium

Some bonds   are sold at a lower price than their face value(the value the bond will be repaid), these are called discount bonds. As soon as you buy a discount bond you  will have already received your return upfront For instance buying a bond whose face value(value to be repaid) is $1000 for $900 gives you a 11% return upfront if you hold the bond till maturity. So in a case of a zero coupon bond (bonds that pays no interest) all you have to do is hold the bond till maturity to secure your earnings.  Note: a bond given at a discount of 10% is gives greater return than another investment offering 10% return. the above example was a bond discounted at 10% but the return was 11%.                                                                                                                                         

                                                                                        

Bonds with longer maturity periods have greater fluctuation in price

Interest rates, inflation and fiscal policies will be changed more often over a long period hence bond price will have more fluctuation. Unless you have the ability to predict interest rate changes and changes of economic policies my advice is to treat 20 year to 30 year bonds as a retirement investment and hold them to maturity.

Bonds can be callable or convertible

Bonds are termed callable when the issuer can repay the principal of a bond to the investor at any given time they feel interest rates are low enough and cheaper source of funds can be obtained from somewhere else. The low risk associated with this bonds and their scarcity of these bonds makes them to be usually charged at a premium (above the face value.). Convertible bonds on the other hand are bonds that can be converted into stocks. Hence if you see at any time that the return from stocks is higher than what you are going to get from the bonds you can sacrifice your annual coupons to become a share holder of a company.

Bonds also exist as mutual funds or Exchange Traded funds

Mutual funds is a collection of funds pooled from various investors and managed by a fund manager (expert trader) . A Bond Fund is a fund whose portfolio/assets are exclusively made up of bonds. So many traders prefer this kind of Bond investment as it diversifies risks. An Exchange Traded Bond Fund is also a collection of bonds but usually tracks index. Unlike a mutual fund which allows you own a percentage of the asset, an Exchange Traded Fund(ETF) functions like a stock market. Thus, you buy and sell ETFs at a certain price. This allows for technical analysis and returns from change in price.

HOW TO BUY BONDS

Bonds can be obtained from a Primary market or a secondary market. A primary market is where the issuer (be it a company or a government) issues it directly to large investment institutions while the secondary market is where traders holding the bonds can sell theirs to another investor. The prices here are rarely going to be at the price the bonds were issued. If you are going to purchase bonds via a broker you are likely going to be doing so via the secondary market.

RECOMMENDED BONDS

The following links gives a list of some of the best bonds one can invest in. I strongly recommend the links as some of the recommendations are renowned all over the world.

https://money.usnews.com/funds/mutual-funds/rankings/world-bond

https://www.thestreet.com/topic/19401/etf-top-ranked-emerging-markets.html

RECOMMENDED CORPORATE BONDS

http://etfdb.com/etfdb-category/corporate-bonds/

RECOMMENDED: Best PAMM Accounts for different Brokers

Are you new to Forex and other Forex related Investments but want to make money right away but don't know how to? If yes, this post is for you. We will be reviewing the best PAMM accounts investments across different regulated brokers. Some of my best brokers with whom I have Live accounts with have been reviewed via this link

Kindly note: Though the links below are referral links attached to my account, I have no affiliation whatsoever with the fund managers. The criterion used to select these accounts are based on Performance, 

• Investor funds safety, 
• Steady returns, '
• Volatility of investment(fluctuation of profit/loss), 
• Maximum loss incurred in a space of time etc

Also Opening an account with a broker requires a valid Identification card (Driving license, National ID,)and Proof of Address (Utility bill, or statement of account)

OPEN AN ACCOUNT WITH FX-OPEN BROKER PROCEDURE

• Click Join, if you have an account you will be asked to select an investment account(Open one if you don't have)
• If you don't have an account with FX Open you will have to open one
• Select the Investment account to start following. if you have any challenge you can ask the an agent on the live chat

 OPEN AN ACCOUNT WITH ALPARI BROKER PROCEDURE

•  once you have opened the link click on Investfunds
• If you have an account you will be asked to select an deposit funds (if you don't open one)

PAMM accounts were introduced back then 2008 by Alpari according to Wikipedia. PAMM stands for percent allocation money management. This system allows Investors to pool their funds together under a particular trader. 

So Lets say trader(investor D) manages Fund X  with Alpari where he invests $50,000 and charges 20% commission, and an four investors Investor A, B C invests $30,000, $5,000, $15,000.(Total pool =$100,000) upon making a profit of 12,500(That is 12.5%). He will receive $2500 as commission which will be added to his own fund ($50,000), the remaining profit $10,000 will then be distributed to the investors according to their percentage contribution to the fund.

So Investor A gets =$3,000 (30% of $10,000). based on the $30,000 (30% of $100,000) his total share becomes $33,000 until the next profit period usually a month.

Investor B gets =$500. based on the $5,000  based on his  5% contribution. His New Total = $5,500

Investor C gets =$1,500. based on the $15,000  based on his  15% contribution His New Total =$16,500

Forex PAMM accounts cashflow example

Advantages of PAMM accounts

Disadvantages of PAMM accounts

Having explained what PAMM is all about,  the following are the best accounts I reviewed and their strong points. Traditional rating is just based on returns however I do not use this criteria for the following reasons.

Many traders pushed their initial returns by opening very large positions (taking large risks on the account), thus they were able to make large profits Thus if one should calculate based on just returns The average returns will be skewed and will not not represent the average profit to expect on the long run.

Many of the the high return strategies are very risky their long term survival is questionable.

Because of their high risk, You cannot expect steady returns on your capital as the whole portfolio fluctuates frequently and in large proportions.

If the returns are not steady you will not be able to plan your finance.

The following are the best PAMM accounts with Alpari Brokerage company. YOU CAN LEARN HOW TO INVEST IN ONE HERE

1. Cobalt

This account is my favorite, the equity curve is steady. the returns per month are great. You should expect to get nice profits for a couple of months and a bad month.  The metrics are great however the trader uses recovery techniques that involves multiplier of lots(volume) when he is in a loosing position.


Quick Summary

The minimum deposit for this accounts is $100. 
Age 1 yr 7 mth

Return to date  873.1%

Return per month  9.4%

Pros                                             

Maximum Drawdown             31.44%

Maximum Daily Profit            33.74% 

Maximum Daily Loss             12.05% 

 Cons

Compensation 30%

High fluctuation in returns

High risks
update: Febuary 2018 This PAMM investment has not been steady as i would have loved but it is still trending well

Click here to View this PAMM or Open account with it

2. Phantom Fx

This PAMM is quite stable, returns are more consistent. It also appears to use some form of recovery however it is not as dangerous as a martingale. its return per month is above  the average for most PAMM. You can expect a positive equity float frequently.

Quick Summary
The minimum deposit for these accounts is $100.

Age 1 yr 8 mth

Return to date  178%

Return per month  6.4%

Pros   

Maximum Drawdown 22.51%  

Maximum Daily Profit 16.15%   

Maximum Daily Loss 14.77%

Steady profit

Great monthly returns

Cons

Compensation 35%

Account age is quite young to ascertain sustainability
update: Febuary 2018 This PAMM started taking a lot of unneccesary risks that turned it to a bad investment choice

Click Here to View or Open an account with this PAMM now

3. Fx10

The manager of this account have been able to stabilize the equity of this account in the last seven months. returns are steady. The manager also have been in the market long time enough to ensure some level of confidence in the return steady return. Trades are not that frequent. What one may not like with this PAMM is that trades are often not as frequent as some people may want.

Quick Summary
The minimum deposit for this accounts is $100.

Age  2 yrs 7 mth

Return Till date 95.9%

Return per month 1.8%

Pros  

Maximum Drawdown       14.23% 

Maximum Daily Profit      10.17% 

Maximum Daily Loss        4.59%

Cons

May have loosing months

Significant fluctuations in returns

Compensation             50%

Click Here to View this PAMM or Open an acccount

4.Makrofx

This trade have been able to master his techniques in loss recovery.  The account is very old and has passed many price crashes that ruined even brokers including but not limited to the Swiss bank Euro incident of January 15, 2015 and the recently BreExit of June 2016. The returns are steady and the manager has a sizable amount of investment in the PAMM also. This will ensure his commitment to profitability.

Quick Summary
The minimum deposit for this accounts is $100.

Age 4 yrs 5 mth

Return to date  301.7%

Return per month 1.6%

Pros

Maximum Drawdown 24.23%    

Maximum Daily Profit 15.83%   

Maximum Daily Loss 10.02%

Steady profit

Cons

Returns per month may is quite small

Compensation             30%

update: Febuary 2018 This PAMM started taking a lot of unneccesary risks that turned it to a bad investment choice

Click Here to View this PAMM or Open an account

High Risk and High Returns PAMM with ALPARI

1. TsapaF

This the return of this account is really smooth and nice. it is still very young but it is showing great promise of amazing returns. This is one to try if you have appetite for risk or watch if you have interest but are not sure if will profitable on the long run.

Quick Summary
The minimum deposit for this accounts is $100.

Age 8 mth 29 days

Return to date  337.5%

Return per month  20.9%

Pros      

Maximum Daily Profit 35.04%               

                                                                        

Cons

Compensation 44%

High fluctuation in returns

High Risks

Maximum Daily Loss 17.24%

Maximum Drawdown 40.97% update: Febuary 2018 This PAMM made a new low in drawdown reaching a percentage of 66%. Should the manager continue to allow such drawdown a total loss may be inevitable

                                                                       

Click here to view this PAMM or Open an account now

2. Lucky Pound
This PAMM tops as the best PAMM account based on Alpari ranking. It has been consistent and has posted remarkable returns in recent times.  If you trust their judgement and can cope with the drawdowns then you should have no problem investing in this account.

Quick Summary

The minimum deposit for this accounts is $100.

Age 3 yrs 3 mth

Return to date  2,092%

Return per month  31.9%

Pros                                                           

Maximum Daily Profit 24.75%                     

Cons

Maximum Drawdown 41.13%

Compensation 40%

High fluctuation in returns

High Risks

Maximum Daily Loss 17.17%

Click here to View this PAMM account now or Open an account

PAMM ACCOUNTS WITH FXOPEN BROKER

1.AsmodeuxUSD

This Investment's equity and return undergoes frequent fluctuations. It has been able to be profitable for quite a long time. The major challenge you must expect for this account is the months where you will have a negative returns. The Trading pattern does involve some form of recovery trades but doesn't look like a continual doubling of lots. A strong point to note with this account is a very nice Risk:Reward ratio if 1:2.

Quick Summary
The minimum deposit for these accounts is $100.

Age 374

Return to date  64.76%

Return per month  5.18%
update: Febuary 2018 This PAMM account have been trending profitably really nicely

Pros                         

Average Win: 175 points / 1.75 USD    

Average Loss: -78.7 points / -0.79 USD

Max Drawdown: 33.1%

Max Daily Gain:  19.84%

Max Daily Loss:    7%

 Cons

 Commission 33%

Click Here to view or open account with this PAMM

High Risk and High Returns PAMM with FX OPEN

1.GhostMan

This PAMM investment has been posting steady profits for some time. The manager also has a myfxbook account. The equity is very stable and shows an accelerating equity growth. it has been around for six months that is quite young as compared to others. Its trades has a 76% accuracy and a Risk:Reward Ratio of 1:1. It currently sits on the 13th position on Fxopen PAMM ranking. Though it is classified as a high risk PAMM the performance is one you just cannot ignore.

Quick Summary
The minimum deposit for these accounts is $100.

Age 112

Return to date  313.2%

Return per month  9.87%

Pros                 

Average Win:  288 points / 6.69 EUR 

Average Loss: -132 points / -7.65 EUR      

Max Drawdown: 29.46%      

Max Daily Gain:    34.25%                                                          

Steady returns

Cons

Commission                 25%

High risk

Max Daily Loss:          24.27%
update: Febuary 2018 This PAMM started taking a lot of unneccesary risks that turned it to a bad investment choice

Click Here to view or open account with this PAMM

2.Bull Dozer

This PAMM  also has a nice Risk:Reward ratio of 1;1.6. The manager also has a myfxbook account to track performance and an account with myfxbook AutoTrade platform. Though it is classified as a high risk PAMM the performance in money management has been admirable so far.

Quick Summary
The minimum deposit for these accounts is $100.

Age 43

Return to date  474.97%

Return per month  5.21%

Pros                             

Average Win: 125 points / 43.8 USD                              

Average Loss:             -78.5 points / -39.8 USD              

Max Drawdown:         43.51%                                              

Max Daily Gain:         33.8%                                                

                                                                                              

  Cons

Commission 25

High risk

Large fluctuations in returns

Max Daily Loss:          21.23%

Can have loosing months
update: Febuary 2018 This PAMM have been having a tough time for the last-5 months. But it is still a good investment

Click Here to view or open account with this PAMM

Conclusion

My best picks are Colbat for Alpari and Ghostman for FXOpen. Recommendation is to invest the largest in your best and then in as many as you can to diversify risk and returns. If you have checked These accounts and not found any that you like you may want to check and select one for your self on Alpari PAMM Account Ratings or FX-Open PAMM Account Ratings.


EDIT (24/11/2017)

• Alpari's TSPAF has been performing impressively

EDIT (23/02/2018)

• Alpari's TSPAF has been performing impressively however it took a new low in drawdown that really made realize it may not be that safe on the long run. It netted me 30% though in barely 3 months. that is just great. The 66% floating loss (Drawdown) made me remove my money though. As that risk is more than I could tolerate. See the image below



My alpari 100 PAMM account return from TSAPAF

I consider the one here safer Scalptik and would continuously be  safe as long as they Manager do not start taking all those mad risks that others take.

=====Stay tuned for more recommended PAMM===

Understanding the Concept of Real Estate

Have you ever wondered what real estate  investments are all about? Most people see real estate investments as the buying and selling of landed properties others see it as the renting out of landed properties to tenants. 

Is there more to real estate than this? 

The answer is Absolutely? 

Real estate is not just a type of investment but it is one investment every investor should have in his/her portfolio. 

1.     It can be funded continually by debt

There are few investments that you can acquire through loans. Most banks discourage borrowing to start-ups due to their high failure rates. Most of their credit policies also don’t allow them to borrow you funds to use for stocks/Forex etc This is primarily due to the high risk involved in such investments.

However for Real Estate investments one can borrow money from a bank to buy a house (mortgage) and rent it out as the owner to a tenant,  pay the my monthly mortgage principal and interest and own the house. These properties can even be used as a collateral in most cases.

2.     Appreciating Value

Real estate and landed investments naturally appreciate in value irrespective of location as far as there is peace in the area. This is primarily because it is limited in supply.  The amount of land available in an area is constant while demand grows daily.  This is one of the reasons banks agrees to use them had collateral for debt. 

The appreciation rate is known to typically be between 5% to 7% annually. 

So let's  say you are planning to borrow to buy a home for $1000.  After 10 years the home will be around $1790 at 6%.

That's great value if you are looking to resale. 

3.     Attractive cash flows

The streams of income from Real Estate investments can be very large. This is especially through for countries that pay rent on a monthly basis. More so, it is an established fact that all landed properties tends to appreciate in value over time. This can be achieved though debt by continual purchasing of rentable properties so that the Monthly income is sufficient to repay ones property investments instantly. One has to have good money management skill though as one can be easily spoilt with large streams of cash.

4.     Has derivatives 

Yes,  most people don't know real estate have derivatives.  (That is an investment instrument derived from another.)  

a.     REIT (Real Estate Investment Trust) are the equivalent of mutual funds in Real Estate. .  It allows you to invest your money to an estate fund manager that invests it  series of estate and gives you the proceeds at a fixed interval. 

b.    CDO's  (Collateralized Debt Obligation),  This is a financial product  that pools together cash flow generating assets usually debts into discrete pieces that are then traded to investors.  Such debts are traditional lay owned by banks.  They include loans, mortgages etc.  So these banks practically do is to  act as an intermediary and use  investors money to lend money to prospective home owners. Investors are then entitled to the proceeds that the bank were receiving. This is very nice as you can earn the bogus profits banks earn from mortgages. 

5.     Fairly liquid

Houses are quite liquid(easily sold) than many people believe.  The rapid globalization around the world is making it increasingly possible to sell Real Estate Investments Properties than before.  There are now apps, websites that link prospective buyers to sellers.  There are several agents that are ready to market your Real Estate Property to whoever is looking to buy. 

The fear of getting stuck to a bad Real estate investments property is increasingly easing away.  Unless you mistakenly buy a haunted house, you should no have problem selling your investment property.  I envisage 1 to 3 years max. 

Recommended approach to buying of properties

·                      Buy soon to be populated areas. 

A general rule is to buy properties around areas where population is going to Increase to very soon.  This is the best place to get deals that will rapidly yield 20% to 100% plus returns.  The earlier you can anticipate this population deals the better for you. 

·                      Buy properties in low crime areas

Never buy properties in areas where crimes are high.  You may say this is contradicting with buying in high population.  However this is not true. Even in high populated areas there are areas with low crime rate.  Not adherence to this route will get you are property no business will want to rent or buy and no family will want to rent because of robbery. 

·                      Buy semi deteriorated properties 

Semi deteriorated properties will get you buildings at a really good building a at good locations at a very low price.  This is because deterioration grater reduces property prices.  You can then renovate it at a subtle amount an resale at a feat price. 

·                      Use debt whenever possible to accelerate your cash flow 

You will not enjoy real estate without maximizing the cash flow benefits. To fully enjoy this feature you need to purchase multiple properties.  This often need you to borrow to fund the property. You can then repay the debt from the rent cash flow and own the building.  If you do this repeatedly you could soon be earning millions from rent we without using your money.  More on this later 

Conclusion 

Real estate is a great investment for any investor. The complications you may encounter are largely legal and troublesome tenants that either wouldn't pay or will damage your property. 

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