Posted on November 29, 2016
Real estate and private equity funds are defined as a type of mutual fund that focuses on investing in securities offered by public real estate companies. These are also described as securities that sell like stocks that are invested directly in real estate, either through properties or mortgages. Also known as REITs or real estate investment trusts, they receive special tax considerations and usually give investors high returns of investment.
There are different types of REITs that people can invest in and they are as follows: Equity REITS, which are when you invest in and own properties, which make you responsible for the equity or value of your real estate assets. The revenues for this REIT come in the form of property rentals. The second type is known as the mortgage REITs, which deal mostly with investment and ownership of property mortgages. These REITs involve loaning money for mortgage to owners or purchasing existing mortgages or mortgage-backed securities. Revenues for these types of REITs come from the interests earned on mortgage loans. And last but not the least, there are the hybrid REITs which combine the investment strategies of both equity and mortgage REITs.
A REIT is also a tax designation for a corporate entity investing in real estate, with the purpose of this designation being to reduce if not completely eliminate corporate tax. In return, REITs are required to distribute at least 90% of their taxable income to investors. These can also be companies that own and operate income-producing real estate that range from commercial office and apartment buildings to warehouses, hospitals, shopping centers and hotels to name a few.
Because multiple investments like these can be difficult to handle or manage, most REITs decide to outsource the services of a third-party fund administrator with specialized skills. They hire companies that not only offer traditional services but also companies that have significant real estate finance domain expertise. Outsourcing has long been something that is done by most companies as part of their re-engineering processes within their respective organizations.
Managing assets is no easy task and outsourcing especially as the more the organization grows, the more complex funds handling become, especially in real estate, which are multi-tiered financial structures that will need specialized management skills to run. Also, since they require timely financial reporting, tracking and analysis, it is important that they be streamlined for effective fund administration. Third party administrators enable you to fast track the processes, thereby increasing productivity and enabling more focus to be given to company growth.
Outsourcing third party fund administrators also allows for integrated communications especially since you will be dealing with asset managers, bank, legal and tax advisors. Third party fund administrators a customized fund community which can be accessed by your service providers to achieve faster tracking of important details regarding the fund structure, as well as access to key documents. These enhanced solutions reduce the number of manual errors and give you more time to focus on other priorities.
Posted on November 26, 2016
Real estate is a legal term that refers to any property along with the land on which that property stands on.
The legality of the term real estate heavily relies upon the jurisdiction which it falls under. The most notable jurisdictions are; U.S.A, U.K, Canada and Australia.
Financial muscles must be stretched so that a corporation can invest in real estate since this investment has become such a major area of business.
Real estate has with time undergone a metamorphosis into distinct classifications that has had investors to call in specialists to facilitate deals on their behalf or valuate the investment.
Listed below is a breakdown of the distinct fields of real estate investments:
1. Appraisals- This is where professionals offer their specialty to valuate the investments.
2. Property Management- In this category the owner leaves their property for other specialists to manage it on their behalf and a certain commission is chargeable.
3. Brokerages- In this field a mediator will facilitate a deal between two parties and in return they charge a fee for the deal.
4. Real Estate Investing: This is where a person or company manages a real estate investment.
5. Real Estate Marketing-The sales side of the investment is managed by a professional in this field.
6. Development- This is improving the investment by either adding or replacing buildings on that land.
7. Corporate Real Estate- Here a real estate is managed not for income purposes but to support its core business.
8. Relocation Services-This is relocating people or business to other countries for expansion of the business.
Basically almost all construction business has a connection to real estate
In the recent past economists have seen that lack of real estate laws can in a greater perspective affect or hinder real estate investment in developing countries. In that light a country like India is currently in the process of establishing definitive legislations that will see the smooth functioning of real estate investment.
In addition, Pakistan is in the process of implementing a regulatory framework that will help soften the ownership of real estate investments by foreign corporations. Pakistan is as at of now witnessing foreign real estate development mostly Dubai and Malaysia based companies.
In five years time Pakistan will have drawn three million dollars from foreign investors.
Real estate investment is finally a major case of capital budgeting this by using analysis that incorporates future streams of income that it will generate and the risks associated with it.
Posted on November 23, 2016
In this big and bold information age you would be hard pressed to name any business that operates from start to finish with one individual. In fact I would argue it’s impossible to name even one, and I mean from start to finish. Not even an artist or author works alone. They purchase key materials made from others. They do research and gain inspiration from others. It’s no different with making sure you have a great real estate team.
Your team is actually far more important than the latter examples. That’s why the first step to investing in real estate is the team assembly. In this aritcle I will explain the four key figures you need to have for your real estate team. Read on…
Yes, you must have a blood-sucking attorney on YOUR side! The first thing to do with you Attorney is use him/her to set up your company. You need to know what type of company to set up in the first place and the pros and cons of the different business types. From limited liability to the different forms of corporations and also partnerships, your attorney will advise and even do all this for you. It’s very important for you to create a different legal entity by forming a company. This eliminates or at least limits your personal financial state if something bad happens with your ventures.
Accountants are another key part of your new real estate team. Unless you have a degree in accounting or are a math wiz, then you need one. They will do all the number crunching. I like to call them the bean counters. Have them do taxes and all the financial statements. A very helpful team member that will save you loads of time on paperwork.
This person is your go to guy on finding property and evaluating the market you’re working in. If you choose to invest in more than one place, then you will need one for each market. You will want to send them information on what type of properties you’re looking for and they will contact you when they find candidates. Then you will go around and evaluate the properties with them.
Another key member of your real estate team is the property manager. After you have chosen a piece of real estate and bought it, these guys go in and manage it for you. If you want you don’t have to have them and it can save you costs. In exchange you are going to have to give you time doing what they do: Dealing with renters, problems with homes, upkeep, etc. Eventually as your portfolio grows you will need to hire property managers, as you simply won’t have the hours in a day to handle these things. You’ll be too busy relaxing and counting cash.
Although there are more people you will need to include from time to time on your real estate team, these four are what I consider the top level members. The people you will use again and again. Remember to choose these people wisely because the better you pick the better your team and business will be.
For more information on real estate team members and all things real estate please visit my website called Blue Collar Real Estate.