May 4, 2021
Two Investment Options: MLG Capital Private Fund and MLG Dividend Fund
Author info Everyone loves options in life and when you invest in our Private Real Estate funds, you can choose from two Fund options to best suit your personal objectives. When Private Fund IV launched in 2018, we introduced a new concept, “the Dividend Fund” as we’ve called them, in conjunction with our historic fund offerings. We’re excited to continue offering this dual structure for investors in our latest funds. While both fund options invest in the same underlying assets across each Fund, both fund options present different tax implications to investors. Let’s take a deeper dive. Why two fund options? One of the primary reasons we created the Dividend Fund structure was to better accommodate tax-advantaged accounts (i.e., IRAs, 401(k)s, etc.). Without this structure, investors using these types of accounts could face unnecessary tax due to Unrelated Business Taxable Income. UBTI is generally incurred by tax-exempt investors when participating in private real estate funds (in our case) due to the fund utilizing leverage on fund assets. The Dividend Fund structure aims to eliminate the risk of UBTI for investors using tax-advantaged accounts. What’s the same? Both fund options invest in the same assets regardless of which option you...
March 4, 2021
Why You Should Consider Investing in Private Real Estate
Perhaps you’ve thought about diversifying your traditional portfolio and considered real estate as a potential solution. Or, maybe you’re only familiar with real estate investment trusts (REITs) as a form of real estate investing. The world of private real estate provides new, and in my opinion, strategic alternatives compared to simply investing in public REITs. In a world where everything feels like it’s been turned upside down, many investors take comfort in the familiarity and ease of stocks and bonds, but they may miss out on the opportunities and benefits private real estate offers. It’s been my experience that investors recognize the advantages to private real estate but are apprehensive to take the jump into investing due to the unfamiliarity of it. Investing in private real estate may offer benefits you may not find in a portfolio made up of REITS, stocks and bonds alone: Diversification Low correlation to public markets and less volatility Tax-deferred income Cash flow and long-term appreciation Let’s take a deeper dive: DIVERSIFICATION Geographic, asset type, and real estate manager diversification is a key part in creating a successful investment portfolio, as it has the potential to shield investors from added risk, and it can also preserve an investor’s capital. Many private real estate investments are done on a local basis, primarily investing in their local communities. Don’t get me wrong, this is great for the local market and community, but it doesn’t help to diversify an investment portfolio across asset classes and markets. With a private real estate fund, investors may be exposed to various...
February 2, 2021
4 Major Differences Between REITs and Private Real Estate Investments Every High Net Worth Investor Should Know
A REIT, or Real Estate Investment Trust, is a company owning or financing income-producing real estate. Private real estate investing is the use of private individuals’ money (not a corporation’s funds) to purchase privately held real estate assets, usually for meant commercial use. Both REITs and private real estate investments are organized pools of capital invested in real estate. REITs are often publicly traded, and therefore can be more liquid. Private real estate can have much higher minimums to invest and typically are offered to accredited persons. REITs typically have a low investment threshold, while the minimums are typically higher for private real estate investments since there are fewer people investing per project. REITs are valued every day just like a stock, so they typically have a high correlation to the stock market. In comparison, private real estate typically has a low correlation to the public stock market. Public stock markets do not typically cause as great a shift in the value of private real estate. Let’s dive a little deeper into each of these differences. Correlation One of the biggest differences between a REIT and private real estate investments is correlation to the public stock market exchanges and public...
