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What is Professionally Managed Real Estate?



In a Gallup poll released in April 2016, Americans selected real estate as the best long-term investment opportunity, far ahead of stocks, bonds, gold, and savings. And while we’ve established the benefits of investing in private student housing, most people lack the funds or expertise to buy and manage their own apartment properties.

A professionally managed real estate company, however, affords you the security of pooling your money with many other investors in a diversified portfolio, while offering asset preservation and capital appreciation, as well as a monthly cash flow through dividends. This can all be accomplished in a simple and efficient transaction.

While investments in student housing have gained popularity in recent years, so has the overall market. The professionally managed global real estate market grew to $7 trillion by the end of 2014, according to MSCI, which provides research and analytics for investors and which has been estimating the size of the world’s professionally managed real estate markets for over 10 years. The U.S. remains the largest market, at $2.4 trillion.

“One of the benefits of professionally managed real estate is that it offers a viable exit strategy for highly appreciated equity that can help people align this next investment or this next round of real estate investment better with their goals,” Nelson Brothers Professional Real Estate Principal Brian Nelson explains in the latest installment of the “Ask the Brothers” video series.

“A lot of folks who two or three decades ago really liked appreciation and growing their nest egg have now changed that focus or their core objective into income and freeing up their time.”

To help investors meet those goals, Nelson Brothers targets stable properties with a long track record of high occupancy and monthly cash flow. The goal is to provide investments that can pay a compelling monthly pass-through income to investors.

The majority of Nelson Brothers’ properties are also structured to be turnkey investments that are eligible for a 1031 Exchange, which allows landlords who sell their properties to defer all capital gains taxes and recapture taxes if they invest that money in a replacement property or properties.

“So instead of dealing with all of the hassles of tenants and property management and all of the things associated with being a landlord, they can do a 1031 Exchange, sell that property, move it into two or three properties that are income-producing that are managed by somebody else, and they in many cases get a better income and consistent monthly cash flow without having to deal with the hassles of tenants,” Nelson said. “So now they can spend their time doing more important things like going to their grandkids’ baseball game, going on a cruise or golfing.”


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