In the world of real estate investing there are two terms that may seem similar but, in fact, they each have their own significance. We briefly touched on the topic of real estate investment trust in “Why Should You Invest in Real Estate Now? Part 2,” but we have yet to discuss real estate investment groups (REIG) and how they can be relevant to you as an investor.
A real estate investment group entails a group of investors and possibly real estate professional who mostly only invest in real estate. Depending on the group strategy and economic climate an REIG can decide to buy a single-family home to renovate and sell. If the investors are expecting a spike in property prices, they can rent the home and chip away at the mortgage while they wait for a chance to sell at a higher price. The group can also invest in multifamily properties in order to collect stable monthly rental income with an option to eventually sell at a profit.
REIG’s can also invest in commercial real estate. One of the most common activities is buying a multifamily property and selling the units to investors, however, the group is responsible for maintaining the property and tending to administrative affairs. Real estate investment trust and real estate investment group are two separate entities. REIGs don’t have to deal with the same requirements and limitations as REITs, and they usually are set up as partnerships.
A real estate investment group can be a great way to invest because it provides the investor with multiple sources of income and an array of assets and cash flow opportunities to add to their portfolio. Another aspect that that makes this type of investing a go-to for many investors is the fact that the group (REIG) manages and handles the day-to-day, leaving the investor to focus on other things while still making money through real estate. A real estate investing group also allows an investor to be a part of a much bigger property and investment without taking on big risks, since multiple investors bring in a large pool of money and the risk is mitigated by the large capital, experience and the professional property management.
In conclusion, real estate investment groups allow an investor to invest in a sound “hard asset” investment without needing experience or spending time managing their investment. As an investor, you will also enjoy the benefit of being able to invest in a single home, an apartment complex, a large property project and even commercial properties. This allows for multiple opportunities to earn equity and income. To learn more about this please contact us at www.aminvali.com.