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Private real estate before retirement: income, liquidity and time horizon
Cash flow is appealing, but syndications lock up capital. How to think about income, risk and timing as retirement approaches.
Why it comes up
Why pre-retirees look at private real estate
- Seeking income that doesn't depend on selling stocks.
- Interest in real estate without being a landlord.
- Diversification of a retirement portfolio.
What to watch
Considerations specific to you
- Illiquidity matters more as you approach needing the money.
- Distributions are not guaranteed and can be suspended.
- Avoid concentrating too much of your retirement assets in a few private deals.
Accreditation
How accreditation usually applies
Most private real estate offerings are limited to accredited investors. Sponsors using Rule 506(c) must verify your status.
- Net worth test: $1 million+, alone or with a spouse or spousal equivalent, excluding your primary residence.
- Income test: $200,000+ individually or $300,000+ jointly in each of the last two years, with the same expected this year.
Summary of SEC rules for education. Confirm your status with your advisor; sponsors may request documentation. See who qualifies.
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Educational content only; not investment, tax or legal advice, or an offer to buy or sell any security.