REIT vs Actual Properties

[Marwan Marzagao]

Pros and Cons to actual property vs REIT's. I have a friend who is heavily invested in REIT's and has had success. I have always leaned more towards owning an actual property because of the equity you build and cash flow opportunities. I would love to hear from the group on the benefits of one versus the other. I am looking to purchase several multi family units and wonder if I should diversify?

[Michael Smith]

I prefer real property because:

- You can leverage much more effectively.
- You can defer gains with a 1031 exchange, can't do this with securities like REITs.
- More control over your portfolio (you choose the property type, location, class, etc)
- You can buy great deals... REIT managers have so much capital under management that they have to put it to work and can't wait for an excellent deal. When you are managing a billion dollars of investor's funds you can't be as selective.

Just to name a few. There are many more reasons, but it all depends on your investment philosophy and style.