Private Real Estate Investment Corporation

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1. Obtain an Employment ID number from IRS at no charge.  (see here)

2. Incorporate in a state. (decide if you are an LLC, LLP, or INC) {for basic example info see here}

3. Build articles of incorporation. (decide who will be legally responsible for your corporation)

4. Outline bylaws. (List member(s) in your REIC, assign operational roles, compose minimum to invest and payout schedule, including beneficiaries, if any)

5. Open a business bank account. (for general expenses & income deposits from investments)

6. Open a business trust account. (to deposit investment funds & purchase properties only)

7. Research property owners, outstanding taxes, liens, & encumbrances by property address search at local tax assessors office or department of revenue.

8. After due diligence, decide which first property you choose to purchase & make an offer.

9. Note :  Some abandoned properties or land may be available to purchase directly from local government, and offer tax incentives or grants.

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Private Real Estate Investment Trust

1. See steps 1-6 above.

2. Remember 75% of all assets purchased & 75% of all revenue earned must be real estate, in which at least 90% of all revenue must be distributed as a form of taxable income.

3. Note:  Entities that choose to open a REIT, but have less than 100 members, tend to start a a managing fund company, until 100 member qualified.  This is used to mitigate potential legal concerns.

4. Hire a real estate management company to manage funds & administrative duties, if necessary.

5. Determine what type of portfolio will be built (it can be a combination of various types of real estate. 

6. Consider hedging purchases with equity loans to reduce tax liability & replenish funding pool.

7. Make sure that you disclose full financial transparency with all members at all times.

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Once you are incorporated, please register with us & join our forum for discussions.