 Think Tech Hawaii. Civil engagement lives here. Hey guys, this is the Prince of Investment with your host, Prince Dax. Coming to you guys all the way live from the beautiful state of Halu'la, Hawaii, via Denver, Colorado. So it's always, I don't have a lot of time, and I definitely, you guys, don't have a lot of guys and girls, don't have a lot of time, so we're going to jump straight into it. So this video, we're going to talk about water reach and how do they work, as you can see in the description box. But what are people that are catching this for on the playback, the podcast, all that's catching this live right now. Thank you for tuning in. Don't forget to hit the like, subscribe, comment, share button, drop some comments if you've got questions below and all the other great stuff. But to think about it, we're going to talk about water reach and how do they work with me, your host. So water reach, reach are, is they asking them for real estate investment trust. They was created in the 60s to give ordinary people an opportunity to be able to invest into real estate. Now I'm not going to sit here and tell you today that, hey, I'm the best real estate person in the world. I know every single thing about reach, but the thing about it, what I'm going to do in this episode is we're going to talk about water reach, what are some of the advantages, the disadvantages, how to be able to get involved with them, a general understanding of how they work, and I may do something a little bit more detailed later on. So water reach, a resource, real estate investment trust, right? We all know what real estate is. You know, these are things like houses, land, apartments, you know, all types, you know, industrial, all types of ways to real estate. But to average everyday person to be accomplished, not to accomplish, to be able to get involved with real estate, you have to have a good credit score, you may have to put some money down, all types of things you may have to do. Now, I'm great, I'm not going to get into, I'm not going to unwrap the ravellings of all the different ways you can get involved with real estate and how much money you need with no money and things like that. But we're going to talk about, we're going to talk about the simple ways for you to get involved into real estate. So this will create in the sixties just four people to have the opportunity to be able to, to be able to profit from real estate. So essentially a real estate or a resource, you can purchase them from, well you can purchase them from, you can purchase them from places like brokers, TD Ameritrade, E-Trade, Scottrade, things like that. Those are the places you can purchase them from. You purchase them just like a stock. They are essentially, they have a formulation of almost like a mutual fund, not like a mutual fund, but they are a bucket. Inside that bucket, they may go out and say, hey, we want to raise money. They IPO, they are an initial public offering, they raise money. So when you purchase the stock or you purchase the read, you're turning your money over to a group of investors. Those group of investors, depending on what type of read it is, they may go out and buy houses and look, you know, they may go out and buy houses or they may buy particular mortgages. And with those, you know, there's other ways to do it too, but to give you prime example two ways, houses are mortgages. And you know, when you pay your mortgage, when you pay your mortgage, you pay interest on your mortgage, right? So reads can be set up that way to where they capitalize on someone paying their particular mortgage. On the other end, with what reads do is they go out and do the traditional way. They go out and get an apartment, a house and they rent it out. And when people pay their rent, that creates cash flow back into the reads. So the thing about the SEC, they're regulated by the SEC, the securities change submission. And what the securities change submission does is they require that 90% of the holders inside of a read must be inside of real estate, right? So what it does is it goes out, it takes some money, it buys things, buys all types of real estate, houses or whatever the case can be. A lot of them set up different. You have to read and, you know, I'm not telling you everyone of them set up the exact same way, but they go out, they purchase particular homes. And when they purchase homes, just like anybody else who pays their mortgage or who pays their rent, the money is fed back into the funds. And when the money is put inside the funds, the money is distributed back out to the shareholders. Almost kind of like the concept of a, almost like a real estate group. The thing, now this is over some of the advantages of a read, right? The thing about it is some reads go for 30, 40, 50, 100 bucks per share, right? So someone who only has 30, 40, 50, 100 bucks a share, they can now take advantage of a read. So an average everyday person actually has the opportunity and chance to be able to be involved with the read, like someone who's listened to this now. And also it's a great way to diversify your portfolio without having to make a big, you know, commitment or purchase. We all know most mortgages are 15 years, 30 year mortgages, right? So you don't have to make that big of a commitment. And if you want to diversify your portfolio, you want to add real estate to your portfolio, instead of going out having to buy a piece of land or property or whatnot, you can look into something called reads. I hope I'm saying this right, a real estate investment truck. So it's a simple way that you can get involved. That's the advantage. What are the disadvantages? One of the major disadvantages that I see with a reach, they don't gain the value that traditional real estate earns. For a prime example, I live in Hawaii for a couple of years. You know, you talk about a housing market that's just, you know, going up over the last three years, I definitely know I can speak of. And with that being said, if you bought a house, let's say for $400,000, and Hawaii three years ago, and you just held on to it, and you can sell it for five or six hundred, you know, a few years later, right? Most, you know, you're making 25, not 25%, between $100,000, almost $400,000 investment that you didn't even put up. You just made the commitment for it and walked away with, you know, a nice piece of money, right? The things with real estate investment trust, they usually don't grow like that. You know, you don't really, I don't see that I know of that I see, I don't see too many real estate investment trusts just doubling and tripling and quadrupling over themselves. It may be some amount there, but they have a, they typically move like a stop. So when they move like a stop, for someone who goes out here who has good credit, who has the income, who can afford it, and who has the know-how, they may go out, they may rent a property, right? They may buy a particular property, they may rent it out, right? They may buy these properties, rent it out, the property may cost them $400,000. You know, they're not paying it. They then, they may have to put some money down or didn't put some money down. They can turn around and sell the property for $500,000, $600,000 a year or two later. And you know, their property is going in $100,000, $200,000, also just, you know, making a commitment, taking the risk of making the commitment to be able to pay that. The thing about it is with real estate investment trust, you don't see them move like that. They typically move like the stock market. Now, let's go back to the advantage side of the house. Earlier I spoke about one of the advantages of that, anybody, not any anybody, but a lot of people have access to real estate investment trust. And with that being said, because it's so cheap to get into, right? It's almost like buying a purchasing on stock. So the other positive side is that, is that most REITs pay a nice dividend. And what I mean by paying a nice dividend, their dividends are usually something, it can run in between three to four to five percent, right? And it's a very easy way to diversify your portfolio. That's why, you know, that's why the advantage, but the disadvantage that you think you're just going to grab it and it's going to replace, it doesn't replace traditional real estate investment trust, right? Now, the other thing about it is, yes, you can go out and start your own real estate group, but the thing about it is that it's regulated by the SEC. What I mean by regulated by the SEC, the SEC requires that they hold certain amounts of funds inside of the, you know, they must hold a certain amount of funds, or the funds must be in some type of real estate, right? So they're regulated. Every quarter they must put in quarterly reports. So now another way, like I spoke on earlier, I have a detailed video on the investor show YouTube channel. We have a step-by-step video on how to find reach with e-trade and tini Ameritrade. Those are like the top two brokers that people utilize. So I have a step-by-step video. It's not as simple to find them, but I have a video that help you use filters on tini Ameritrade to help you add real estate into your particular portfolio. Now one of the reasons why I say that adding real estate is a good thing, and something that I'm trying to inform the option of doing even more involved into real estate is that it diversifies your portfolio. Like we always speak about having so much money in equities, so much money in bonds, so much money into real estate. So these are ways you spread your money out depending on how the market may move and how things may go. So that's one of the great ways to diversify your portfolio and to get involved with reach and how you can purchase them. Now also with another simple way, if you're someone who doesn't have an e-trade or Scott Drake account, not Scott Drake, I know tini Ameritrade, purchase them, but e-trade account, one of the ways you can look into doing a read is, you know, one of the ways you can look into doing a read is you can get inside of a reach and now one of the ways I'm kind of lost my little chance out there, but one of the good ways of actually utilizing a read to your advantage is it's a great way that you can look into or an easy way for tears to start out and to get a little taste of real estate. So if you have a five to nine plan but a brokerage account for your child that you opened up and you want to kind of give them that little taste in real estate, this is the way to do it. They also pay nice dividends. Now one of the disadvantages I just thought of that I forgot to mention earlier is that reach usually pay a nice little dividend, you know, talking three or five percent dividend because they're collecting money from their tenants paying or they're collecting interest off mortgage. That money is falling into your account. At the end of the year, Uncle Sam's going to want a piece. That's just how it goes, right? So if you're paying taxes on money that you probably didn't even utilize. So depending on your taxes, depending on the way you're set up in taxes, it could increase the tax liability because of the dividends that you're collecting out of the reach. Even if you have those dividends reinvested, those dividends are still being reported and you still are accountable to pay taxes on them. So that's another, some people consider that as a disadvantage depending on your tax situation depending on your tax bracket, all that type of stuff. So those are things you must consider when you are looking to purchase a real estate investment trust. I will advise you to do your own particular research to learn more about real estate investment trust. And what I lost my train of thought on earlier, I was trying to, I was speaking about if you don't have TD Ameritrade, E-Trade or Scott-Trade account, one way you still can look into reach is you can just Google, just use the word Google, reach stock numbers, not numbers, but reach stock symbols. And those symbols will return you particular, those symbols will return you particular investments that you can go off, symbols that you can look up and do your own research and look into other reach. All reach is not the same. Some reach have different objectives. They're equity reach, they're mortgage reach and there's another type that I can't even remember reach. So look inside of them to find out more about them. But it's an easy way and a great way to add real estate to your portfolio without the traditional way, a non-traditional way to add real estate to your portfolio. Also, it's very cheap and inexpensive to get into and it doesn't require commitment because it pretty much trades like stock. So I hope that helped you guys. You know, we talked about what are reach, how to purchase them. We talked about some of the advantages. We talked about some of the disadvantages. We briefly spoke about how they worked, the different types they are. Who they were regulated for, why they were created. Why they were created is very important to me. I always like to see why this here, why, you know, is this, you know, a thing. And you know, from what I read in research it was created in 60 to give people a chance with real estate investment trust. Here this is 2018, I don't know too many people even brought up real estate investment trust. So look inside of that. That's a quick and easy way to add real estate to your portfolio. So as always, we've got state tuning here. Next week we'll be coming in live all the way from Omaha, Nebraska. We'll be airing there and showing some stuff here on Think Tech Hawaii at the great Berkshire Hathaway, Warren Buffett's Berkshire Hathaway, 2018 meeting. If you haven't seen the cover to the 2017 meeting, please stop and take the chance. Go look at the seven minute documentary because I will be making another one this year. So as always, my name is Prince Dykes. I'm not going to be here for too long. My name is Prince Dykes. Thank you guys for tuning in. I hope this video will help you. Don't forget to hit the like, subscribe, comment, and share button. Until the next podcast cartoon, or whatever you seem to do crazy around the globe, peace, be safe, amout, and safe.