Setting Up REIT - Posted by Antoinette

Posted by Antoinette on September 01, 1999 at 09:52:22:

Thank you for your responses. I think I know just where to go from here and some day I’ll put one together but not now.

Setting Up REIT - Posted by Antoinette

Posted by Antoinette on August 31, 1999 at 20:48:58:

A year ago I started my real estate career. Since then I bought a couple of multifamily bldgs from sellers in foreclosure and to my surprise as a beginner, I got them with absolutely no money down or bank financing. Since then I have come across plenty of multifams and A LOT of foreclosures, that are good deals. I feel like I could do more with a little bit of financing, if not on the purchasing end, but on the rehab end. So I’m looking for money, but I hate going thru banks. Does anyone know about REITs - Real Estate Investment Trusts and how to set one up? I’m thinking it may be a good idea to set up my own REIT and use it to raise money for my real estate deals (and maybe even for others) without having to go to the bank. Any ideas, suggestions, experiences??

Re: Setting Up REIT - Posted by Eric C

Posted by Eric C on August 31, 1999 at 22:42:03:

Hi -

I haven’t looked into the formation of REITs in quite some time, but one restriction used to be that there had to be a minimum number of stockholders - for some reason 100 is the number that comes to mind.

Also, most of the income (95%) had to be distributed to the shareholders every year to maintain the REIT’s status.

Like I said, the last time I looked was about 1989 or so, and Congress has only implemented about 2000 tax code changes since then.

I would think that there would be simpler and easier ways to accomplish the same thing - the syndication rules are much less complex.

Good luck!

Re: Setting Up REIT - Posted by JHyre in Ohio

Posted by JHyre in Ohio on September 01, 1999 at 06:42:31:

There a TON of requirements and issues in addition to those correctly raised by Eric. REITs are superbly efficient entities for tax purposes IF you are looking for big capital…I’d say at least 50 million, with a bais towards 300 million plus. There are smaller REITs, generally run by investment companies with lots of experience in dealing with securities laws. For anything under tens of millions, the relative overhead costs are rather high.

John Hyre

Re: Setting Up REIT, Good Point - Posted by Shawn Crawford

Posted by Shawn Crawford on September 01, 1999 at 08:59:33:

Take a look at Unite Mobile Home (UMH) a mobile home reit and how large they are.