New Haven, CT (Law Firm Newswire) December 29, 2011 - Investors are enticed to make money off of properties in the down economy as real estate purchases are at an all-time value. Some individuals look to pool their monies together to obtain a portfolio of properties, which is known as a real estate investment trusts (REITs). Two types of REITs are available. One is traded on a national securities exchange whereas the other type focuses on non-traded REITs.
“The Financial Industry Regulatory Authority (FINRA) recently sent out an alert about these non-traded REITs,” said Connecticut stock market loss attorney Michael Stratton. “The average investor is not aware these REITs have very high fees when sold that can wipe away potential returns. Before investing in an REIT, make sure you are with a reputable broker or firm and that the risk is worth it.”
REITs are typically sought after because of the ability for capital appreciation of hotels, apartments, agricultural land, or other real estate involved. But periodic distributions can only come after borrowed funds are returned to the principal investors.
“This is what makes this type of investment so volatile,” said Stratton. “Sales ads that only show high yields and the hype of this type of REIT often do not highlight the fees, lack of liquidity, and other traps.”
If an individual feels they have been scammed, they can file a claim against a broker or firm. Stratton advises to get legal advice as soon as “foul play” is discovered and keep track of all documentation about the REIT investment.
Stratton Faxon is a Connecticut personal injury law firm specializing in stock market losses, medical malpractice, wrongful death, birth injury, truck accidents, and malpractice. Their attorneys are members of the Public Investor Arbitration Bar Association and skilled in securities litigation. To learn more, visit the Connecticut personal injury law firm at http://www.strattonfaxon.com.
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