Direct vs Indirect Real Estate Investment

Alternative Investments: Hedge Funds, Private Equity & Real Assets · 3:24

Listen on 93

Lyrics

[Verse 1]
When you want to own some real estate
There are two paths that you can take
Direct means buying property yourself
The building sits upon your shelf
You hold the deed, you pay the tax
Control the lease, collect the cash
But it takes time and money too
Management work is up to you

[Chorus]
Direct or indirect, which way to go?
Own the building or buy the flow
REIT stands for Real Estate Investment Trust
CMBS and funds, there's more than just
Direct control versus liquid shares
Both have profits, both have cares
Direct or indirect, make your choice
Let your wallet find its voice

[Verse 2]
Indirect means you buy a piece
Of someone else's real estate feast
REITs trade on the stock exchange
Like buying stocks, but real estate's the game
They own the malls, the offices too
Pay dividends right back to you
No management, no midnight calls
Just quarterly checks that never stall

[Chorus]
Direct or indirect, which way to go?
Own the building or buy the flow
REIT stands for Real Estate Investment Trust
CMBS and funds, there's more than just
Direct control versus liquid shares
Both have profits, both have cares
Direct or indirect, make your choice
Let your wallet find its voice

[Bridge]
CMBS packages mortgages tight
Commercial loans bundled up right
Real estate funds pool money together
Professional management through any weather
Direct gives you control and pride
Indirect lets you diversify wide
Lower entry, higher liquidity
Pick your path to profitability

[Chorus]
Direct or indirect, which way to go?
Own the building or buy the flow
REIT stands for Real Estate Investment Trust
CMBS and funds, there's more than just
Direct control versus liquid shares
Both have profits, both have cares
Direct or indirect, make your choice
Let your wallet find its voice

[Outro]
Whether direct or taking flight
Through indirect ownership rights
Real estate can build your wealth
Just pick the method that fits your health
Direct or indirect, both can pay
Choose your real estate investment way

← The J-Curve Effect and PE Cash Flows | Income Approach: Direct Capitalization →