Source: Mondaq —
One of the things going on today is that many investors would like exposure to real estate but – being honest with themselves – don’t know how to determine where to invest or how to assess risk and reward. Of course, they could buy a public REIT but would have no real ability to value the REIT or what it owns. They could invest in a deal but are logically afraid that they really have no way to tell if it is a good deal or not a good deal.
One conclusion is to ignore real estate as an investment class, but with stocks racing to the moon and bonds yielding almost zero, there is a dangerous risk/reward profile to both asset classes, and real estate stands out as one of the few alternatives where the risk/reward profile may make a lot of sense.
I can’t help you with public company investing; however, here is an outline of how you could invest in private real estate in a manner where you can manage your lack of underlying real estate knowledge but still end up with an intelligent risk/reward profile. The steps are as follows: