REIT Shares or Real Roofs?

George Tsividakis
May 07, 2025

Paper Real Estate vs. Direct Ownership

Both own “real estate.” Only one lets you raise rents, leverage equity, and hand your kids the deed.

1 | Two Paths to Property Exposure

	Public REIT (Ticker Symbol)	Direct Ownership (Door & Deed)
Acquisition	Click “Buy” in brokerage app	20–25 % down + financing
Liquidity	Trade in seconds	Sell/refi; slower but intentional
Leverage	Typically none for investors	70–80 % LTV is common
Control	Zero say in property ops	Set rents, renovations, exit timing
Tax Shelter	1099-DIV; no depreciation pass-through	Depreciation, 1031, cost seg, step-up
Yield History*	3–4 % dividends	5–10 % cash-on-cash typical

*Nareit equity-REIT average dividend yield 2014-2024.

2 | Why Investors Love REITs

Speed & Simplicity—no tenants, no toilets. Portfolio diversification. Daily liquidity.

3 | Why REITs Fall Short

No Leverage Multiplier
Your $50 K buys $50 K of exposure, period.
Market Correlation
Public REITs trade with equities—down 38 % in 2020’s first quarter.
Tax Efficiency
90 % of income must be paid out → taxed to you at ordinary rates. No depreciation offset.

4 | Direct Ownership: Stacking Returns

Appreciation on the Whole Asset (3–5 %/yr)
Tenant-Paid Amortization (equity every month)
Rent Cash Flow (5–10 % CoC)
Tax Shields (paper losses via depreciation)

Example:
$100 K down buys $400 K four-plex @ 6 % fixed.
Year-1 Net Cash Flow: $7,200
Principal Paid: $5,000
3 % Appreciation: $12,000
Total Gain: $24,200 → 24 % return on $100 K

Try replicating that with a 3.5 % REIT dividend.

5 | Risk & Responsibility Side-by-Side

Concern	REIT Investor	Direct Owner
Property repairs	REIT handles	Owner/manager handles
Share-price swings	High	Low (private valuations)
Tenant issues	Diversified across portfolio	Screen well, keep reserves
Illiquidity	None	Moderate (refi/sell)

Property management (8–10 % of rent) can offload headaches, turning real roofs into nearly passive income.

6 | Tax & Legacy Advantage Checklist

	REIT	Direct
Depreciation Write-Off	❌	✅
1031 Exchange	❌	✅
Cash-Out Refi (tax-free)	❌	✅
Stepped-Up Basis to Heirs	Limited	✅

7 | Financing Tools to Make “Real Roofs” Easy (LoanFunders.com)

Goal	Product	Highlights
Buy first rental	DSCR Loan up to 80 % LTV	Qualify on rents, not W-2
Scale fast	Portfolio Blanket Loan	One payment for 5–10 doors
Force appreciation	Bridge → DSCR Refi	Rehab, raise value, lock 30-yr fixed

Brokers: White-label every loan—keep the client, we do the underwriting.

8 | Decision Snapshot

Want click-and-sell flexibility? 👉 REIT.
Want leverage, tax shields, and controllable cash flow? 👉 Direct ownership.
Hybrid? Hold a small REIT allocation for liquidity; park real wealth under real roofs.

9 | Conclusion—Own the Roof, Not Just the Receipt

REITs are a fine appetizer, but true wealth is built where you can raise rents, refinance equity, and pass a deed—not a ticker symbol—to your kids.

Ready to trade paper shares for tangible doors? LoanFunders.com structures DSCR, bridge, and portfolio loans that make direct ownership attainable—even if you’ve only held REITs till now.

Let’s put a real roof—and real cash flow—over your portfolio.