REITs. Simply explained!

This is how REIT works:

One: Investors looking for cow milk.

Two: REIT Manager buys a Cow

Three: REIT Manager milks the Cow

Four: Investors get most of the milk

Five: More milk please!
 
Do one of these or both
 

Fatten the cow (enhance asset)

Press harder the cow's ripples by using both hand!

However, there is limit to how hard you can press the cow's ripple before she kicks your ass.

Six: But investors want more milk!

Then buy more Cows.

Seven:  Where to find money to buy more cows?

• Go and borrow from banks
• Do right issues or private placement

Then what happened?

Some retail investors are forced to take out more money from their wallet or some no money.

Some retail investors will Cow Father Cow Mother (in hokkien) when they realize they actually lose out in the right issue exercise or private placement.

And this will happen again and again when investors cry for more and milk milk but may end up more and more Cow Father Cow Mother (in hokkien)  when they realize again they are actually losing out!

Unlike Other Businesses

They don't just buy cows and milk them. Some will buy cows and produce goats, sheeps, or chicken (new products or services) and milk them in different ways.

Don't you want more than just cows?