| Energy Investment Funds An Energy Investment Fund can provide accredited investors access to a diversified pool of cash producing energy assets. Unlike many energy investments, an Energy Investment Fund can be structured to accept monies that have been previously invested in traditional retirement plans. In addition, this type of fund structure carries no debt and is not subject to unrelated business taxable income (UBTI). As world demand increasingly outpaces supply, owning production in currently producing wells represents a prudent option for adding energy to a diversified portfolio. Every barrel of oil and every MCF of natural gas is needed and global pricing reflects this fact. The era of "cheap oil" is showing its age. An Energy Investment Fund can take advantage of market demand by purchasing production from multiple fields across the United States. This strategy represents a risk-adjusted option for individuals seeking steady cash flow potential and portfolio diversification into energy. Real Estate Investment Trusts (REITS) In a Real Estate Investment Trust (REIT), investors are allowed to pool funds for participation in real estate ownership or financing. Investors contribute capital that is used to purchase interests in high-quality real estate. The properties will provide immediate income from tenant rents and offer the potential to appreciate in value so that they can ultimately be sold at a profit. In return for their investment, participants receive dividends plus a potential increase in equity through the growth of the company. As required by law, a REIT must distribute 90 percent of its annual income to shareholders. Or, it may reinvest a portion of the capital to improve its portfolio. REITs have gained popularity in recent years because many professional advisors recommend allocating a portion of an investment portfolio to investment real estate. REITs provide limited liability and centralized management thus represent an easy, hands-off approach to real estate investing. In addition, many REIT companies are traded on the national stock exchanges thus there is an established secondary market for liquidity. However, private REITs are less liquid. It should be noted that REITs are not considered "like kind" replacement property for the purpose of a Section 1031 Exchange. Investors are not allowed to exchange "into" or "out of" a REIT. Real Estate Development Funds Through a Real Estate Development Fund, investors contribute money that will be used to finance multiple development projects over a specified period of time. Investor return is based on the overall success of the Fund's portfolio of assets. This diversifies risk over several projects investors are not limited to the success of individual real estate investment ventures. Real Estate Development Funds can be structured to accept monies that have been previously invested in traditional retirement plans. |
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