Direct Investments

Direct Investments

Fortitude Investments provides brokerage services for other investment structures such as Real Estate Investment Trusts (REITs), real estate funds and oil & gas royalties. Due to their structure, REITs, real estate funds and most oil and gas royalty programs are not eligible for 1031 exchange. Direct ownership of some oil and gas royalty programs are considered a direct interest in real estate and are thus eligible for 1031 exchange.

These kinds of offerings through Fortitude are private placement offerings available to accredited investors. They are not publicly traded and should be considered illiquid investments. Each offering is sold based upon a private placement memorandum and undergoes a similar due diligence process to DST and TIC ownership structures.

 

Risks

Alternative investment products, including real estate investments, notes and debentures, hedge funds, and private equity are considered highly speculative and involve a high degree of risk. They often engage in leveraging and other speculative investment practices that may increase the risk of investment loss, can be highly illiquid, are not required to provide periodic pricing or valuation information to investors, may involve complex tax structures and delays in distributing important tax information, are not subject to the same regulatory requirements as mutual funds, and often charge high fees which may offset any trading profits. In many cases, the underlying investments are not transparent and are known only to the investment manager.

Alternative investment performance can be volatile. Investors could lose all or a substantial amount of their investment. Often, alternative investment fund and account managers have total trading authority over their funds or accounts; the use of a single advisor applying generally similar trading programs could mean lack of diversification and, consequently, higher risk. There is often no secondary market for an investor’s interest in alternative investments, and none is expected to develop. There may be restrictions on transferring interests in any alternative investment. Securities offered through Concorde Investment Services are not FDIC insured and may lose value.

Be sure to consult with your Fortitude representative as to which of these risks are present in the offering you are interested in.