Private equity real estate funds are funds or money pooled by high earning individuals or institutions and investing them in properties in the form of equity and debt holdings. Even though the investment is carried out mainly by financial institutions but if an individual plan on investing in such plans and not on other high yield real estate funds or whatsoever he can pool his money in buying the shares of a property or a mall etc. To become a partner in the returns that is to follow in the near future.
How do you invest in private real estate funds?
Investing directly in such funds allows you to become the owner of the property whereas when an individual invests his money along with other investors he/ she merely become a partner in the returns from the real estate. The investment is carried out once the individual pools his money which is calculated must not go below $250,000.
Risks involved in such investments.
The capital invested by the investors in the equity and debt holdings of a real estate will be occupied and held up for a predetermined period of time within which the invested money cannot be withdrawn or called off unless sold to another buyer. Investors should study well about the risks involved in such plans where the money is held captive for a time period which will be mentioned to them.
This kind of fund takes some time to appreciate, unlike high yield real estate a fund the appreciation of it’s worth occurs rapidly. It generally has a term of 5-6 years for every investment held. Refits and real estate mutual funds help in pooling the money of the investors in such investments assuring them with a guaranteed return every once in a while.
What should one consider before investing?
An investor should always confirm whether they are eligible for such investments and whether they are willing to bear the risks associated with it or not, only if they are certain of their decisions they must take a step forward to invest the money held in hand in profitable investments like real estate or other high yield alternative investments.