Private Real Estate Investing

Private real estate investing refers to the practice of purchasing, investing in, or developing real estate that is transacted in private markets, rather than investing in real estate through publicly held vehicles – such as real estate investment trusts (REITs).

Because REITs are publicly traded, liquid assets, they tend to exhibit greater volatility and correlate more closely with the stock market. Private real estate investments are illiquid, with transactions occurring in slower-moving, less efficient markets. Private real estate investing returns are a function of manager skill and microeconomic factors, hence offering return potential that is less correlated with public markets. Private real estate investing is hence referred to as an alternative asset of the sort that institutional investors pursue in order to diversify away from a traditional portfolio of stocks and bonds.

Real estate crowdfunding has afforded individual investors access to private real estate investing at much lower minimums than was previously available through offline syndication.


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