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LIDO INSIGHTS | Investment Planning Considerations: Real Estate

Published 06-02-2021

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By Jason Ozur, CEO


The below are factors to consider if you plan to invest in the real estate market:

How And When Should Real Estate Be A Part Of Your Investment Plan?

Real Estate offers several advantages including: participating in a direct investment, diversifying in another asset class beyond stocks and bonds, income, leverage and potential tax benefits.  Right now, we’re in an exceedingly low interest rate environment. Used appropriately, leverage can offer the ability to increase your investment amount by using debt.  When the cost of debt is low and the belief is the return on the investment will exceed debt costs, prudent leverage can be sought to enhance returns. 

Currently we are in an exceedingly low interest rate environment.   When quality bonds are often yielding only below 2%, real estate provides another source of income.  Income that is often shielded from taxation with depreciation.

Generational Assets

Real Estate is a generational asset.   Investing and holding real estate can offer several advantages such as the ability of owning a hard, tangible asset as well as potential tax advantages such as the step-up basis rule.  In other words, the cost basis of the holding is reset to the current value upon inheritance. Although there is talk of changing this rule, the multi-generational aspect may still be advantageous with people using low-cost leverage to maintain an asset.

Alternative Real Estate Investments

Lido Advisors offers clients different types of opportunities within the real estate sector. In the more conservative side of that space, Lido invests in first mortgages targeting a 60%-65% loan to value.  We look at this as a loan to own strategy. We receive payment of 7-8% of while the debt is unpaid and if the borrower does not pay, the recourse is to foreclose and take the property.

On the equity side of real estate, Lido brings value to clients via multi-family, industrial, retail and ground-up construction opportunities. To learn more, contact an advisor.


Disclosures

Lido Advisors, LLC is an SEC-registered investment adviser. Please note that SEC registration does not denote any particular competence or ability and no inference to the contrary should be made. For complete information on the services we provide and our fees, please review our Form ADV at adviserinfo.sec.gov, call (310) 278-8232, or mail us at 1875 Century Park East Suite 950, Los Angeles, CA 90067.

Past performance is not indicative of future performance. The information in this report is for informational purposes only and should not be relied upon as the basis of an investment or liquidation decision. Nothing in this report shall be construed to be a solicitation to buy or offer to sell any security, product or service to any non-U.S. investor, nor shall any such security, product or service be solicited, offered or sold in any jurisdiction where such activity would be contrary to the securities laws or other local laws and regulations or would
subject Lido to any registration requirement within such jurisdiction. All content herein has been obtained from sources deemed to be reliable, but is subject to unintentional errors, omissions and changes without notice, and is not warranted as to its accuracy or completeness. You should not rely on the information contained herein, and should rely solely on, and carefully read, the appropriate offering and related subscription materials relating to any specific investment product before making any investment decision.

Not all investments are suitable for all clients. It should not be assumed that any security listed or any recommendations made in the future will be profitable or without loss, including risk of loss of principal, or will equal any prior performance. All investments involve the risk of potential investment losses including the potential risk of loss of principal as well as the potential for investment gain. Further, the prior performance figures indicated herein represent portfolio performance for only a short time period and may not be indicative of the returns or volatility each portfolio will generate over a long time period. The performance of the portfolios should also be viewed in the context of the broad market and general economic conditions prevailing during the periods covered by the performance information. Any references to future returns/risk are not promises of the actual return the client portfolio may achieve. Before investing, investors should seek financial advice regarding the appropriateness of investing in any securities of investment strategies discussed. Not all investments are suitable for all investors.

The information herein is not legal, such as trust or estate planning, advice, or tax advice. Any such information is provided for illustrative purposes only and must not be relied upon without the benefit of the advice of your lawyer and/or tax professional. Lido specifically disclaims any liability from any reliance on such information. Lido is not a legal service provider or tax professional and does not offer legal or tax advice. Should you desire to obtain tax or legal services or advice, you must enter into your own, independent
engagement agreement with a licensed attorney or tax professional.

Lido specifically disclaims any and all liability arising from the information or illustrations presented in these materials and is not responsible for the consequences of any decisions or actions taken as a result.

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Lido Advisors, LLC is an investment advisor registered with the Securities & Exchange Commission. SEC registration does not denote competence, ability, or expertise.  As an SEC-registered advisor, we are required to publicly file certain information with the SEC as well as furnish or provide you with the opportunity to obtain information about our principals, employees, products, services, and fee schedules.  Please review our Form ADV, which provides this information, at adviserinfo.sec.gov, call us at (310) 278-8232, or mail us at 1875 Century Park East, Suite 950, Los Angeles, CA 90067 for a copy of our Form ADV.

The future is uncertain and cannot be predicted.  Past performance is not indicative of future performance. These materials are provided for informational and illustrative purposes only and should not be relied upon as the basis of an investment decision. You should not construe this as investment advice or an offer to buy or sell securities.  All content herein has been obtained from sources deemed to be reliable, but is subject to unintentional errors, omissions and changes without notice, and is not warranted as to its accuracy or completeness. You should not rely on the information contained herein, and should rely solely on, and carefully read, the appropriate offering and related subscription materials relating to any specific investment before making a decision to invest.

Not all investments are suitable for all clients. Investing carries a risk of loss, including the complete loss of principal. Different types of investments involve varying degrees of risk and there can be no assurance that any specific investment will be profitable or suitable for your financial situation or risk tolerance.  Any references to projected or future expected returns or risk are not guarantees, promises, or assurances that these outcomes will be achieved.  Before investing, you should seek financial advice regarding the appropriateness and suitability of the contemplated investment as not all investments are suitable for all investors.

We do not provide legal or tax advice.  Any investment has tax and legal consequences.  You should consult with a licensed professional prior to making any investment.

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