when run by experienced professionals the group s investments can be diversified well enough to lower risk and react to market volatility reigs also benefit from having few limits on what they can engage in and how they operate 
reigs often have formal agreements stipulating when and how members can access their money if you want to withdraw from the group you may not recoup your investment or share of the profits immediately thus greatly limiting your liquidity reigs also can have set fees these fees can be costly especially when profits are slim or when losses occur some groups charge fees annually or more frequently lastly the success of the group depends on the people who make the decisions the risk may greatly outweigh any rewards if managed by unskilled and inexperienced people unrestricted investment opportunitiespooled capital for venturesdiversified portfolio for maximum profitsgroup fees may erode profitsreig agreement may prevent free access to fundsfailure is possible with an unskilled and inexperienced groupreigs vs reitsreigs and reits are both vehicles for investing in real estate but they have different structures and operating methods reits are generally more liquid than reigs because they are traded on major stock exchanges while reigs could require a longer capital commitment since they involve direct investment in physical properties 2another key difference involves their management reigs may offer more direct control over investment decisions while reits are managed by a professional team that makes all investment decisions 3 also reits are highly regulated and must follow sec regulations including disclosing financials and providing 90 of profits as dividends while reigs are subject to fewer regulations 2finally reigs often require a higher minimum investment than reits which can be purchased through single shares you should analyze the performance and trends of respective reigs and reits to better understand these vehicles especially in light of evolving market conditions and the regulatory environment structure reigs are companies that invest in real estate by pooling together capital from several investors operation in a typical reig an investor purchases a property through the group and becomes a part of the group returns and risks investors typically receive income from the property s rental revenue after operational expenses and fees managed by the reig are taken out the risks could be high if the management team is not experienced or the properties do not perform well structure reits are often publicly traded companies that own operate or finance income producing real estate across a range of property sectors operation investors can buy shares in the reit and the reit uses the pooled capital to invest in properties or mortgages returns and risks shares of a reit earn income without having to buy manage or finance property the risks are like those associated with any equity investment including loss of principal and fluctuation of value 