Suitability for DPPs and REITs

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Chapters in this video

  1. 0:00 The DPP 7-12 year steel vault and trifecta
  2. 1:58 Low tax bracket equals no DPP
  3. 3:50 Three flavors of REITs
  4. 4:53 Non-traded REITs are not publicly traded REITs
  5. 5:19 Mortgage REITs and the interest rate spread
  6. 6:16 DPPs versus publicly traded REITs
  7. 7:12 Rapid-fire exam recap

What this video covers

  • Why the DPP suitability trifecta requires adequate financial resources, tolerance for 7-12 year illiquidity, and a high tax bracket to benefit from passive loss deductions
  • How a low tax bracket makes DPP tax benefits worthless, and why the exam dangles projected returns to bait you into ignoring this rule
  • Why retirees needing liquidity and income are automatically unsuitable for DPPs regardless of projected returns
  • The three REIT types (publicly traded, non-traded, mortgage) and which investors each is appropriate for
  • Why non-traded REITs carry significant liquidity risk and higher fees, and are not interchangeable with publicly traded REITs for suitability purposes
  • How mortgage REITs make money on the spread between short-term borrowing costs and long-term mortgage yields, and why rising interest rates squeeze that spread
  • Why DPPs and publicly traded REITs are completely different suitability beasts despite both offering real estate exposure

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Read the Free Lesson → free · no signup wall