a real estate investment group reig is a business that concentrates much of its efforts and capital on real estate in search of profits real estate investment groups may choose to buy renovate sell or finance properties real estate investment groups commonly buy multiunit properties sell units to investors and take over administration and maintenance of the property reigs either do not elect to be or qualify as a real estate investment trust reit 
understanding reigsreigs have several partners or private shareholders these investors provide a pool of capital and a greater ability to invest more broadly reigs focus much of their business on real estate but they are not subject to rules that require them to invest only in properties as such they can structure their business in several ways or take up other opportunities that align with their business strategy thus reigs may engage in property financing flipping properties leasing properties to clients or property management companies for rental income or selling units while maintaining management control in general there are no limits on the activities of a reig though most will market themselves as such to make it easier for investors to identify them the goal of a reig is to have monthly cash flows from investing in real estate reig investinginvesting in real estate is attractive since it offers several ways of gaining returns reigs may buy stakes in apartment buildings rental homes commercial buildings or commercial units they may earn income from mortgage lending rental properties or property management fees reigs often appeal to high net worth investors who want to gain a stake in real estate but do not wish to manage the properties themselves reigs also draw investors who manage single rental properties independently or are interested in flipping houses the reig allows the investor to buy one or more properties through an operating company the operating company collectively manages all the units and takes care of marketing them in exchange the operating company takes a percentage of the monthly rent diversification might help prevent significant losses during economic downturns and soft real estate markets one of the advantages of reigs is the pooled capital they receive as a partnership or corporate entity reig partners typically put up more cash initially than other real estate investments but will often see greater returns the structure of reigsreigs and reits are acronyms too often used interchangeably despite their differences reits established by congress in 1960 create financial statements follow specific tax laws and must provide 90 of their profits as dividends each year reigs meanwhile can have any business structure though the most common are partnerships and corporations a partnership is a business owned by two or more people who share profits losses and debts partners take stakes in the business proportional to their investment under the u s tax code partnerships are not taxed rather the income to partnerships passes to the partners who report the income on k 1 forms 1 partners receiving a k 1 must individually file their partnership income on form 1040 if they are individuals or on form 1120 for a corporation partners in a reig need not take part in managing the business partnership agreements detail the minimum investments fees distributions and partner voting some partnerships have a collaborative structure for investment decisions while others leave the core management of the business to a few executives generally the management team sources and identifies deals before investing partner capital some real estate investment partnerships accept investments from 5 000 to 50 000 while that may not be enough to purchase a unit the partnership might pool money from several investors to fund a shared or co owned property forming a corporation public or private is an option for any business the securities and exchange commission sec governs public corporations while sec regulation d covers private corporations public companies must provide quarterly transparent financial statements any businesses other than sole proprietors can elect to be taxed as a corporation if they meet the requirements incorporating a business allows a company to sell equity shares of the business equity shares comprise a part of the company s total value public equity shares vary in value based on public trading alternatively private shares are valued by their owners an executive management team manages corporations however shares can be structured with different voting rights which gives equity investors some say in the company s overall management crowdfundingonline real estate crowdfunding platforms can operate as a reig these platforms are structured as partnerships and pass through all income to investing partners with reporting on a k 1 the emergence of real estate crowdfunding platforms makes it easier for both accredited and non accredited investors to speculate in real estate the best real estate crowdfunding sites can help you diversify your portfolio and offer opportunities for competitive returns though such investments also carry greater risk than alternatives fundrise is a popular real estate crowdfunding platform that offers people the opportunity to invest in debt capital financing or take equity in real estate properties advantages and disadvantages of reigsreal estate investment groups diversify their investments to maximize profits pooled resources allow for several investments often generating larger returns 