BruceM,

Thanks for your advice.  A friend of my Mother's said they have been earning a guaranteed 8%.  Sounded too good to be true for sure!

Thanks again,

Darren

Good Morning....

 REIT's are coming back into favor [IMHO] "slowly". By slowly, I mean they are currently very volatile and coming back from the dead [property valuations declining that had gone up substantially during the housing bubble where properties became more valued than the business being conducted]....

 If you like REIT CEF's [cef.com for educational material] currently, you might want to look at SRQ/JRS for starters [both currently at "discount" to fair value NAV] with both paying >11% [REIT sector currently remains out of favor with banks/financials]....

Have a "GREAT" week....

Best Regards/Eddie

ddcawley:

BruceM,

Thanks for your advice.  A friend of my Mother's said they have been earning a guaranteed 8%.  Sounded too good to be true for sure!

Thanks again,

Darren

The 8% is not guaranteed. The way a REIT works is that 90% of the profits must be paid to the investors, this is where they get the 8% dividend from. I owned the Apple 5 Reit and reinvested my dividends, which was 8% but increased to 8.27%. With compounding I averaged over 9%. They paid me every month as promised. My share price of $11.00 never changed and when they sold the properties last October I made $14.05 per share ($3.05 profit per share). Between the dividends and the capital gains I averaged over 18% per year and I never lost a dime in it due to the stock market. I also own Apple 6, I've been earning a steady 8% on it since 2004 and the dividend was increased to 8.2% the beginning of the year, once again with compounding I'm averaging over 9%. I rolled my Apple 5 into Apple 8, which is earning 8% and when they sell my Apple 6 I'll roll it over into the new Apple 9 program.

You got some lopsided info here and I thought you should know what an investor in David Lerner's Apple REITs has experienced. I'm very happy with my results and highly recommend this investment!

 

Good Luck

 

I have been an investor in apple hospitality suites, apple 2, 5, 6, 7, 8, 9. I have invested through David Lerner (broker Barry Sarin, Teaneck NJ) for over 12 years. I sincerely hope your mom invested in these instead of the publicly traded reit market. The returns are outstanding. The total return of apple 2 (15.9%), and apple 5 (18.9%) if you reinvested the dividends beat the hell out of the public market reits. I presently hold apple 6, 7, 8, and 9. The management of the properties is outstanding. There is NO DEBT and the cash spent on the acquisition of hotels is unleveraged; think no mortgage. Liquidity, though limited is made available on a first come first served basis by request, or for emergency or death of holder. Presently they are running under 3% redemptions per year. The dividends can be reinvested or taken as cash. The usual life of each of these reits is 3-7 years. I have stayed in the hotels and they are spotless (virtually all of the properties are extended stay hotels of less than 200 rooms.) The dividend payout is paid monthly at a rate of approx 8-9% annualized. The dividends are ordinary income (taxable) but due to passed through depreciation the rate is less than you'd expect. Of course the capital gains are long term. There are NO institutional inverstors permitted to invest. All participants are retail. The important thing about that is that there are none of the gorillas on the board tactics (like Carl Icahn) that can distract the management of a company. I am extremely happy with the earnings. The statements are delivered on time and concise. I know that my assets are not affected by the gyrations of the public markets. After 9/11/2001 apple 2 lowered it's dividend to 8% form 10% in anticipation of a slowdown; no big deal, we survived and in 2007 sold apple 2 for a great return. I realize that "Wall Street Pros" won't think this investment too sexy but I have been a professional trader in the equity markets for over 30 years and recommend these reits to my family and friends. Lastly I was told by Lerner that I no longer fit the suitability profile to purchase apple 9. Why? because my prior investments, reinvested for 12 years grew so large that it became my largest financial asset and my broker asked that I diversify somewhat. My recommedation is to start small and reinvest. You'll see what I mean after a few statements arrive in the mail.

"cef.com for educational material?"  There is no such URL.  There is a cef.es that is an unrelated site from Spain.  Closedendfund.com doesn't appear to have any educational material.  Eddie, please specify the URL of the site you like for educational material.

NightOwl:

"cef.com for educational material?"  There is no such URL.  There is a cef.es that is an unrelated site from Spain.  Closedendfund.com doesn't appear to have any educational material.  Eddie, please specify the URL of the site you like for educational material.

I'm not Eddie, but most of what I learned about CEFs is HERE.

At the bottom of the right column theres a list of "free booklets" filled with educational information.

--Aalan

 

Although the Apple REITs from David Lerner are not 100% safe, no investment (other than treasuries and an insured CD) is 100% guaranteed...the David Lerner Reits have been VERY successful.  David Lerner Co. is traditionally a very concervative investment company.  I have a lot of money invested in Apple Reit #8 and #9 and I've been receiving my 8% annual dividend (paid out monthly).  You just have to be aware that your principal will be tied up (as the real estate is being developed) for 3 to 5 years.