REIT Shares or Real Roofs?

Paper Real Estate vs. Direct Ownership

Both own “real estate.” Only one lets you raise rents, leverage equity, and hand your kids the deed.

1 | Two Paths to Property Exposure

Public REIT (Ticker Symbol) Direct Ownership (Door & Deed)
Acquisition Click “Buy” in brokerage app 20–25 % down + financing
Liquidity Trade in seconds Sell/refi; slower but intentional
Leverage Typically none for investors 70–80 % LTV is common
Control Zero say in property ops Set rents, renovations, exit timing
Tax Shelter 1099-DIV; no depreciation pass-through Depreciation, 1031, cost seg, step-up
Yield History* 3–4 % dividends 5–10 % cash-on-cash typical

*Nareit equity-REIT average dividend yield 2014-2024.

2 | Why Investors Love REITs

Speed & Simplicity—no tenants, no toilets. Portfolio diversification. Daily liquidity.

3 | Why REITs Fall Short

  1. No Leverage Multiplier
    Your $50 K buys $50 K of exposure, period.

  2. Market Correlation
    Public REITs trade with equities—down 38 % in 2020’s first quarter.

  3. Tax Efficiency
    90 % of income must be paid out → taxed to you at ordinary rates. No depreciation offset.

4 | Direct Ownership: Stacking Returns

  • Appreciation on the Whole Asset (3–5 %/yr)

  • Tenant-Paid Amortization (equity every month)

  • Rent Cash Flow (5–10 % CoC)

  • Tax Shields (paper losses via depreciation)

Example:
$100 K down buys $400 K four-plex @ 6 % fixed.
Year-1 Net Cash Flow: $7,200
Principal Paid: $5,000
3 % Appreciation: $12,000
Total Gain: $24,200 → 24 % return on $100 K

Try replicating that with a 3.5 % REIT dividend.

5 | Risk & Responsibility Side-by-Side

Concern REIT Investor Direct Owner
Property repairs REIT handles Owner/manager handles
Share-price swings High Low (private valuations)
Tenant issues Diversified across portfolio Screen well, keep reserves
Illiquidity None Moderate (refi/sell)

Property management (8–10 % of rent) can offload headaches, turning real roofs into nearly passive income.

6 | Tax & Legacy Advantage Checklist

REIT Direct
Depreciation Write-Off ❌ ✅
1031 Exchange ❌ ✅
Cash-Out Refi (tax-free) ❌ ✅
Stepped-Up Basis to Heirs Limited ✅

7 | Financing Tools to Make “Real Roofs” Easy (LoanFunders.com)

Goal Product Highlights
Buy first rental DSCR Loan up to 80 % LTV Qualify on rents, not W-2
Scale fast Portfolio Blanket Loan One payment for 5–10 doors
Force appreciation Bridge → DSCR Refi Rehab, raise value, lock 30-yr fixed

Brokers: White-label every loan—keep the client, we do the underwriting.

8 | Decision Snapshot

  • Want click-and-sell flexibility? 👉 REIT.

  • Want leverage, tax shields, and controllable cash flow? 👉 Direct ownership.

  • Hybrid? Hold a small REIT allocation for liquidity; park real wealth under real roofs.

9 | Conclusion—Own the Roof, Not Just the Receipt

REITs are a fine appetizer, but true wealth is built where you can raise rents, refinance equity, and pass a deed—not a ticker symbol—to your kids.

Ready to trade paper shares for tangible doors? LoanFunders.com structures DSCR, bridge, and portfolio loans that make direct ownership attainable—even if you’ve only held REITs till now.

Let’s put a real roof—and real cash flow—over your portfolio.