Turning off the reinvest box before funding is the whole reason it worked

The reinvest question is a real one and the answer isn't the same everywhere. Some plans issue DRIP shares at NAV, some at a small discount to NAV, and the discount is the only thing that makes automatic reinvestment interesting to me. What does yours say? The other half is whether reinvested shares restart any early repurchase clock. If they do, you're constantly holding a slice of newly issued stock that's the most expensive to sell, which is the opposite of what someone reinvesting for convenience thinks they're doing.

600 on 12k over 14 months is roughly 4.3% annualized in cash. My question is what the 1099 says about it. A meaningful chunk of REIT distributions can come back as return of capital, which isn't the same thing as income and lowers your basis. That's a conversation for a CPA rather than this thread, but you should know the split before you decide the yield you're comparing against anything else.

For scale, my worst unit last year did about 4% on equity after a water heater and a turnover, and it cost me six Saturdays. So I'm not going to sneer at 4.3% and a checkbox.

Can someone define NAV for me plainly? I've now read it four times in this thread. Is it just what the shares are worth?

@juniper it's net asset value, the sponsor's stated per-share value of the properties minus debt and other liabilities, usually set by appraisal on a schedule rather than by anyone buying or selling. That's the difference from a listed REIT, where the price is whatever the last trade was.

How did you find the sponsor in the first place? That's the step I can't picture. Was it an advisor, or a platform you signed up for cold?

The five year mental lockup is the part I'd underline. Every bad outcome I've watched in this vehicle started with someone who told themselves the quarterly window was a plan.

I screen tenants for a living now, so the first thing I want to know is what you screened the sponsor on. Did you look at how many quarters of repurchase requests they'd actually filled in full, or did you take the offering doc's description of the program at face value?

Two weeks of funding delay over one misread net worth question is the cheapest lesson in this thread.

Where I look, 12k is barely a roof. So the comparison for me isn't a rental, it's what else 12k does while it waits. @compass did you think about it that way or was this money you'd already decided wasn't going into property?

Following up on my own point since @compass hasn't posted the split yet. If a big share is return of capital, the reported distribution rate flatters the fund and your basis is grinding down every month. That doesn't make it bad, it makes it different from a bond coupon, and people compare it to a bond coupon constantly.

The part that sounds easy is the 47 to 53 dollars showing up every month. What happens to your version of this if the board cuts the distribution rate by a third? You'd still be locked in the same way, and the reason you bought (steady cash) would have moved without the NAV moving much at all. I'm not saying it will. I'm saying that's the variable I'd stress before I called it a win.

This is the version of investing I keep asking people to describe and nobody does, because there's no story in it. A checkbox and a statement. Thank you for writing it without dressing it up.

Did the platform charge you anything visible at purchase, or is it all inside the NAV? I ask because the ones I've looked at describe fees in three different documents and none of them add up on the first read.

What was the minimum? I've seen 2,500 quoted a lot for the registered non-traded ones and much higher for anything Reg D, and I'm trying to work out which door I'm even standing at.

@marlow that matches what I've read, 2,500 or so is common on the public non-traded side and the private ones start far higher and want you to qualify on income or net worth first. @compass, separate question, is there an actual stated lockup in your documents or just the repurchase program with its caps? Those are different things and people use the word lockup for both.

Honest comparison for me is a savings account I can drain on a Tuesday. 4.3% and illiquid has to beat that by enough to pay for the illiquidity, and I don't know how to price that gap yet.

@arbor that's exactly where I'm stuck. My 12k equivalent is earmarked for a down payment in maybe two years, and this is precisely the money that shouldn't go anywhere with a repurchase queue attached.

Small portfolio here and the thing I envy isn't the yield, it's that nobody calls you. Mine called me at 6am about a smoke detector last week!

@compass go back to the repurchase plan and find three things in the actual text. One, the cap, usually expressed as a percentage of NAV per quarter and sometimes a monthly sub-cap. Two, whether shares held under a year get a reduced price when repurchased, and how the holding period is counted for shares bought at different times. Three, the sentence that lets the board modify or suspend the program at its discretion, because it's in nearly all of them and it's the sentence that decides what your quarterly window is worth in a bad month. You did the right thing with the reinvest box for the reason in item two, whether or not you knew it at the time.