“Correspondent Direct Lending” REITs: What to Know Before Purchasing a REIT

If you have been thinking about purchasing a REIT (Real Estate Investment Trust), make sure you know what you are getting into before you make the purchase. A lot of people read up a bit on the various investments they are considering and then make purchases because they like the way something sounds.  Have you heard of “correspondent direct lending” REITs?

A correspondent direct lender is a mortgage company that originates, processes, underwrites, issues loan commitments, closes and funds their own loans.  A “correspondent direct lending” REITs invest in “correspondent direct lender” mortgage companies.

With stock, bond and mutual fund purchases this may be a normal thing, but when you are doing real estate investing you should do more research, and it’s easy.  You should look at:

Location Location Location

The first thing you should get to know when you are considering a “correspondent direct lending” REIT  or other type of REIT is where it is located. What is the market like in that area? This can be easily found with a little Internet research these days. Find out what complexes, properties, malls or industrial parks are included in the REIT you are considering buying and look up those areas. The more you know about the land and building value of the property you are investing in, the more you can know you are making a wise investment decision that has nowhere to go but up.

Stability

If you are investing in a new real estate development REIT this is not as much of an option, as you will not necessarily know how the project will go once construction is complete, but if you are considering purchasing shares in an established REIT, take a look at their history. Have they shown stability in the recent months or years? If they have, this is a good sign they will continue to do so.

One thing you should keep in mind on this front is that all markets, real estate included, have had a tough time over the past year or so, so if their strength only wavered during that time, you should not be too alarmed.

Profits

The bottom line here is that you want to make money. Before you get into a REIT, make sure it is one that will be making you money from the beginning and for years to come. Some REITs make more than others and the key to finding ones that will make you a better return is looking for those that are fully booked with tenants or are in a growing area that will not have a problem filling all the leases so you know the profits will start rolling in.

Doing this research may sound daunting, but it’s not if you know where to go. For example, REITBuyer.com is a website that offers all the information you need about the REIT market. You can do your research, look at past REIT investments, see comparisons of the REITs to the stock market and really get a better understanding of the investments you are considering making.

Once you have become knowledgeable and know which “Correspondent Direct Lending” REITs or other REITs you want to invest in, you then only have to go as far as a few mouse clicks to purchase them through REITBuyer.com, as they are a full service investing real estate broker. Then sit back and watch your work pay off.

“Correspondent Direct Lending” Mortgage REITs

If you have been watching all the shifts in the investing markets, you may be a little worried about putting your money into any of them right now. Things have been falling and falling, how do you know where it will be safe to put your cash?

Perhaps it’s time to look at some of the other investing options out there like real estate. I am not talking about running around and buying up any extra lots of property you happen to see around you. That comes with a lot of responsibilities and major outlay up front. Not only do you have to have the money to purchase the whole property, but you also have to be able to take care of it and maintain and manage it after the fact. This is a lot to ask for in an investment.

There are many ways to invest in real estate without direct purchases of property.  One way is “correspondent direct lending”  mortgage REITs. First, what is “correspondent direct lending” you ask?  “Correspondent direct lendign” is a direct lender  mortgage company originates, processes, underwrites, issues loan commitments, closes, and funds their own loans.

REITs or real estate investment trusts  are funds where you purchase shares of the investment and a real estate management group of real estate development group uses that money to purchase, build or maintain property ventures. You essentially fund a portion of a property acquisition and management group.

So, “correspondent direct lending” mortgage REITs are REITs that invest in “correspondent direct lending” mortgage companies.

In return for your investment, you will be paid a portion of any profit that the company makes, much like a stock dividend.

While you may be wondering how wise it is to consider real estate in today’s tough market, this is exactly why it may be a good time to look at a little more investing. Here’s why.  Sure, there has been a tough time for the markets. Lending has dropped, defaults on properties are on the rise. We’re in tough credit times.

But now let’s look at the positive side of things. Most think the slide has slowed and will soon be stopping. Add this to the fact that those capital markets that REITs use to get their funding for expansion and other purchases are low and that means the chances for REITs to get the capital they want to expand has dropped, for now. While you may think this is a bad sign, the truth is this is a time when the value of REITs is lower, meaning you can get in at a lower price. As things settle and go back to normal, your profits will go up and you will see an even greater return on your investment.

This is the time to log onto a website like REITBuyer.com and find out what REITs are out there, what they are selling for and get yourself in on this low tide so you can enjoy the ride when the financial wave picks up again.

With the other option being putting all of your money away and seeing no growth, what would you prefer?

Money Making Guru Robert G. Allen may have said it best saying, “How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.”