Finance Chapter 11.1

1. direct- single-family houses, duplexes, apartments, land and commercial properties.
indirect- real estate syndicates, real estate investment trusts, high-risk mortgages, and participation certificates.

2. Hedge against inflation, easy entry, limited financial liability and financial leverage.

3. Illiquidity, declining property values, and lack of diversification.

4. Each of these investments are grouped together and have characteristics of mutual funds. They are invested in securities in real estate in some form. Syndicates are temporary, and organized as a limited partnership of real estate, REITS are investments that can be chosen from three different areas (mortgages, equity or hybrid) , and PCs are investments in mortgates

5. I would tell investors that PCs would be paid back to you even in the event of a catastrophe. (They have the security traits of a US Treasury Bond) Because of the security, it would be a wise choice to invest.

6. A hybrid REIT may be a good investment, because it gives you diversity, and is not as risky as short term real estate holdings. PCs are considered the safest of the investments, and you receive a check for principal and interest each month. In a syndicate she would be able to have much diversification, and only hold it for a temporary amount of time, but it takes alot of money to start a syndicate.