How Are Unlisted REITs like Apple REIT 10 Potentially Unsuitable for Me?

If you read our previous blog post, you probably already understand the general risks of REITs. However, you may still have questions about what makes an unlisted REIT like Apple REIT 10 specifically risky for the average investor.

Here are a few things to keep in mind when you hear that an unlisted REIT is a “low risk” opportunity:

  1. Unlisted REITs draw higher commissions and fees. Because about 10% - 15% of your investment goes into paying commissions, upfront costs, and ongoing fees, the REIT needs to deliver a much larger return to compensate.
  2. Unlisted REITs are more difficult to sell. Unlisted REITs do not trade on national exchanges and can be difficult to sell, especially when things start going wrong and share repurchase programs disappear.
  3. The value of unlisted REITs may be inaccurate.A publicly traded REIT is subject to daily market fluctuations, but an unlisted REIT has no active market and may appear artificially stable. By the time an unlisted REIT is revalued, it’s too late.

Although unlisted REITs may have a place as a small percentage of an experienced investor’s overall portfolio, targeting inexperienced or elderly investors who are looking for a low-risk opportunity is inappropriate and may constitute investment misconduct.

If you have lost money or had your investments frozen in the Apple REITs recommended by David Lerner Associates, contact an experienced FINRA lawyer today at (800) 738-1960 or by filling out our online form at the top of this page.


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