Real Estate Investment Trust Versus RELPs: An Overview

General Article

Many people are sometimes confused about the difference between REITs and RELPs. RELPs, or Real Estate Limited Partnerships are a kind of syndication that possess many of a REIT’s benefits.

These benefits include (potentially) financial rewards, investment security (potentially, once again) and, ideally, tax savings. The General Partner is the party responsible for the strategy, execution and day-to-day operations of the RELP, and whose responsibilities are comparable to those of a trustee of a REIT. The General Partner enjoys all decision-making responsibilities for the investment, and also assumes liability for it.

The other partners in the group are Limited Partners. These are the investors, and their status as limited partners means their financial obligation is limited to whatever amount they chose to invest at first – they don’t have to worry about anything else. Just like with REITs, the Real Estate Limited Partnership investor is spared management responsibilities, and is relieved of liability for principal debt. And, just like a REIT, in many cases RELPs allow cash investments of any size.

Unlike Real Estate Investment Trusts, however, which offer long-term investment in a diversified portfolio of properties, and are also extremely easy to cash in, a RELP) is often used for projects that last for shorter terms. Also unlike REITs, RELPs often do not distribute cash until the end of the investment, and properties usually do not immediately generate revenue (which is one way REITs generate regular distributions. And if Limited Partnership vehicles did create revenue, the cashflow would probably be put to best use funding the projects’ construction or redevelopment.

Once the development or renovation is complete, however, the value of the property will often be significantly higher than that of the initial investment. RELPs generally provide higher yields over the short term, and unlike REITs, RELP investments are generally not redeemable before a predetermined “liquidity event”. In most cases any profit would be disbursed to the Limited Partners.

In summary, the main difference between Limited Partnerships and Investment Trusts is that the former are short-term investment vehicles with no payouts during the term of the scheme. However, both are considered to be a high-growth form of investment, and experience little if any of the ups and towns commonly found in the stock market.

This was just a short comparison between REITs and RELPs. Group-owned real estate investing is a big subject, and I look forward to exploring it with you in a future article.… Read More

Finished Basement Walkthrough Orion, Michigan

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Take a couple minutes to take a walk through of one of our finished basements in Orion, Michigan. This project included a completely finished basement …

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Improvements 052

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Improvements 052

Posted by Rock River Outfitters on 2010-06-30 22:44:22

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How to Effectively Protect Door Thresholds During Construction Projects

General Article

During construction or remodeling projects, door thresholds are often destroyed by dirt, mud, paint splatter, and careless spills. In order to avoid replacing or refinishing thresholds, it is recommended that contractors use temporary threshold protection. Following is a brief description of the pros and cons of each type of threshold protection.

UV protective tape is the best kind of adhesive threshold protection. It is a 9 mil. thick white tape that does not flake, even if exposed to bright sunlight. UV protective tape has chemicals in both the tape and adhesive that block UV rays and make the tape resistant to both sunlight and heat. It can be used in both hot and cold climates without the worry of adhesive transfer resulting in a quick and clean removal upon project completion. Although more expensive than other tapes, UV protective tape is very cost effective when the costs of clean up or repainting of entry thresholds are considered.

Blue masking tape and blue sill tapes are the most common tapes for protecting thresholds. These low cost tapes work for short term protection only in areas of low heat or sunlight. They are known to flake and chip when exposed to sunlight and are often cited for creating more work than the protection provided. These low quality 2 or 3 mil. tapes often leave a sticky adhesive residue on thresholds as the adhesive used in the tapes softens in warm temperatures.

Another option is to use fitted threshold protection made from molded plastic. The molded plastic threshold protectors are designed to protect the most common types of thresholds in residential or commercial construction. They are the most durable type of threshold protection and can be used for multiple projects. Several sill manufacturers provide plastic threshold protection that is specific to the model of sill they are selling. Unfortunately, heavy duty plastic protectors are not available for every type of entry threshold so the protection is not easy to obtain. There is one surface protection company on the west coast that does inventory plastic threshold protection for two of the most common sill profiles.

For protecting sliding door tracks, there are two types of threshold protection. The first is a hinged plastic protection that flips over the tracks of sliding doors to keep them clean from debris. This protection screws into a wood subflooring to hold it in place and thus cannot be used on sliding doors installed over cement slabs which are commonly used on the west coast. Another option that does work for protecting sliding doors installed on cement slabs is impact-resistant U-board protection. It is a thick, heavy weight compressed paper protection that is made from recycled material and is completely reusable. The U-board is placed over the tracks while the door is open and protects sliding door tracks from dirt and grime. As with the plastic protector, the Sill Pro keeps the sliding tracks clean and protects the tracks of the door from damage that can interfere with the … Read More

Bathroom Renovation – Installation process

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The process of Bathroom renovation, showing the installation from start to finish. Complete Bathrooms is New Zealand’s leading and largest bathroom …

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