| For many years, investing in the stock market was | | | | mortgages directly to property owners or operators |
| anything but easy. As an investor, you had to | | | | or by purchasing existing mortgages. In both cases, |
| carefully research which stocks to buy, decide how | | | | whether from rents or mortgage payments, a REIT |
| much weight to give to the advice of your broker, | | | | must annually distribute as dividends to its |
| then monitor the ticker carefully to determine | | | | shareholders at least 90% of its taxable income. |
| whether to hold, and when it was time to bail out. | | | | As with mutual funds, REIT shares are liquid; shares |
| But the advent of mutual funds provided a much | | | | can be sold at almost any time. And, again like mutual |
| more hassle-free path to stock market investing for | | | | funds, the investment is passive - the individual |
| individuals who liked the idea of turning over the | | | | shareholder is only faced with one decision: which |
| decision-making to experts. By buying shares in a | | | | REIT to own. All other choices are left to the REIT |
| mutual fund, the individual investor placed his money | | | | administrators. |
| in a pool, alongside the funds of many other | | | | On the other hand, a REIT doesn't give an individual |
| shareowners, which was then used to purchase a | | | | owner any choice in which properties or mortgages |
| large portfolio of securities chosen by market | | | | are purchased - once you invest in a REIT, you |
| professionals. If the fund managers did their | | | | accept the decisions of others. |
| homework well, the value of shares in the fund | | | | A REIT can certainly be a good choice for an |
| would grow nicely; inevitable losses from some | | | | investor who's looking for a way to get involved in |
| holdings in the portfolio were offset by broad gains | | | | real estate while keeping the complexities to an |
| elsewhere. And the mutual fund share owner had no | | | | absolute minimum. At the same time, you may also |
| day-to-day decisions to make, once he selected the | | | | want to look into a land investment vehicle that's as |
| fund that looked right for him. Finally, mutual fund | | | | hassle-free as a REIT, but offers some other |
| shares were liquid - the individual investor could pull | | | | features as well. That vehicle is LandBanking. |
| money out of the fund much more easily than a | | | | Unlike REITs, which are primarily income vehicles, |
| conventional securities owner. | | | | LandBanking is aimed at medium to longer-term |
| Today, the REIT - Real Estate Investment Trust - | | | | growth. The basic LandBanking concept is nothing |
| brings the mutual fund idea to the field of real estate | | | | new - acquire undeveloped real estate parcels that |
| investing. REITS are perfect for Individuals who | | | | are located just outside burgeoning growth centers, |
| would like to position their investment dollars to take | | | | hold the land until local expansion demands make it |
| advantage of real estate's profit potential, but are | | | | attractive to developers...then sell at a solid profit. |
| wary of the complications of conventional investment | | | | While you can be your own LandBanker, there are |
| choices like rehabs or new construction, or are too | | | | also LandBanking partnerships that make investing as |
| busy to acquire the skills needed to navigate the real | | | | hassle-free as REITs. But in this case, your "share" |
| estate mine field. Instead, they can now buy shares | | | | will be an interest in a carefully selected land parcel, |
| in a REIT and let a team of professionals navigate | | | | chosen by LandBanking experts for its location and |
| the mine field. | | | | imminent appreciation potential. |
| Almost all REITs fall into two categories. They are | | | | If you don't agree with their analysis, you can just |
| either Equity REITs or Mortgage REITs or a hybrid of | | | | move on to the next opportunity. But if you agree, |
| the two. Equity REITS use their pooled funds to | | | | the process is simple and straightforward and once |
| acquire income producing properties - residences, | | | | you've become a LandBanker, you can just sit back |
| office buildings, shopping centers...etc.. Mortgage | | | | and watch your land appreciate with no hassles or |
| REITs invest in income producing paper, by providing | | | | headaches. |