MLG Capital’s Mitch Faccio Featured in REBusiness Online: “Multifamily at a Crossroads: Why Now May Be the Time to Invest in Texas”
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MLG Capital’s Mitch Faccio Featured in REBusiness Online: “Multifamily at a Crossroads: Why Now May Be the Time to Invest in Texas”
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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...
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The Tax-Efficient Power of Reinvestment
Private real estate is a tax-advantaged asset class. At MLG, we first focus on making smart real estate investment decisions, then wrap strategic tax planning around those decisions. One financial strategy our investors can take advantage of is the power of reinvesting over time. When one of our older funds produces a large distribution following the sale of a property, many of our investors consider making new investments into our newest fund. New investments generally create fresh tax losses that could be used to offset taxable income from prior funds within the same year. Illustrating the Tax Efficiency of Reinvestment To illustrate the power of reinvestment, let’s see what potential tax savings could occur from an investor using their proceeds from a distribution in an older fund to make a new investment into our latest fund offering. This scenario is hypothetical and is not representative of any investment offered by MLG. Additionally, it is always wise to consult your tax professional before making any investment decision. Let’s assume an investor made a $250k investment in a diversified private real estate fund. Let’s also assume that a property sale from such fund produced a return of capital of 20% of their original...
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