Resources > Information > REITs TICs and PPMs
Definisions

These are Passive Investment types for Group Investing:

Real Estate Investment Trust
Definition

REIT. A corporation or trust that uses the pooled capital of many investors to purchase and manage income property (equity REIT) and/or mortgage loans (mortgage REIT). REITs are traded on major exchanges just like stocks. They are also granted special tax considerations. REITs offer several benefits over actually owning properties. First, they are highly liquid, unlike traditional real estate. Second, REITs enable sharing in non-residential properties as well, such as hotels, malls, and other commercial or industrial properties. Third, there's no minimum investment with REITs. REITs do not necessarily increase and decrease in value along with the broader market. However, they pay yields in the form of dividends no matter how the shares perform. REITs can be valued based upon fundamental measures, similar to the valuation of stocks, but different numbers tend to be important for REITs than for stocks.

Equity REIT
Definition

A REIT which takes an ownership position in its real estate investments - earning income from rents.
 
Mortgage REIT
Definition

REIT which invests in mortgages; some also borrow money from banks and re-lend it at higher interest rates. Earnings are generated from interest on the mortgages.
 
 
Hybrid REIT
Definition

A Real Estate Investment Trust that generates income from rent and capital gains, like an equity REIT, as well as interest, like a mortgage REIT.
 
 
Tenants in Common
 Definition
 
Tenants in Common is a way to hold title, to own property, by two or more individuals. Sometimes it is referred to as Tenancy in Common. There is no limit to the number of individuals who can hold title to one piece of real estate. A property held by tenants in common can be owned by two owners or 100+ owners.
Ownership can be held in equal shares or unequal shares. For example, John could hold 50% ownership, Mary 25% and Tallulah 25%.
 
  
Private Placement
Definition

The sale of securities directly to institutional investors, such as banks, mutual funds, insurance companies, pension funds, and foundations. Does not require SEC registration, provided the securities are bought for investment purposes rather than resale, as specified in the investment letter.
 
A Private Placement is an extremely complex document. The primary purpose of a PPM is to give the entrepreneur the opportunity to present all potential risks to the investor. The PPM protects the entrepreneur in the event that the investment goes sour! That's why it's so important that the private placement memorandum be accurate and complete.
An attorney MUST review your offering to assure it complies with all national and state regulations. The Private Placement below is meant as a starting point for groups or individuals who want to piece together a PPM themselves, save some money and then take it to the attorney for review. An attorney must review your PPM to assure compliance with your state's securities laws. Failure to do so could cause some serious problems down the road, especially when approaching an initial public offering!