Hi Reader,

I wrote an article attempting to respond to this question in the subject line, describing the four ways private real estate generates returns for investors.

One of the ways is tax benefits, and here's a brief excerpt from that section of the article:

Let's say a married couple earns $300,000/year. In 2023, their Federal effective tax rate is about 17.5%.

If this couple had invested in T-bills or a money market account earning 5%, the Federal tax hit would have reduced their net return to about 4.1%.

A couple earning more than $300,000/year would have an even bigger Federal tax hit.

Why Invest in Private Real Estate When Treasuries Pay 5%?

"Why should I invest in private real estate right now when I can earn 5% in risk-free treasuries…and stay liquid to catch the bottom of the real estate market!"

I've heard this comment more than a few times this past year.

I understand and respect that position.

However, this is often short-sighted and can result in significant opportunity costs for investors hoping to beat inflation and build wealth over decades.

This post outlines several considerations...Continue Reading Article​

Sidecar Opportunities

Though we are big believers in diversification (and will continue providing significant diversification to our investors), some current and prospective investors have seen our ​preferred equity deals​ and said something along the lines of, "I like this deal a lot. Can I invest in just this one deal?"

Among a few other things, they wanted the following:

• 3-5 year hold time
• One state K-1
• One property/portfolio and one asset type
• Slightly higher year-one cash flow

The answer to their question was always no.

However, we are considering taking on slightly larger preferred equity deals that could result in higher concentration levels than we want in the Wellings Real Estate Income Fund (the "Fund").

To solve that potential concentration risk and meet the demand for individual investments, we plan to launch a sidecar opportunity for a preferred equity investment very soon.

Let's say the preferred equity opportunity is $7 million total. In this case, the Fund may take $3 million and the sidecar would assume the other $4 million.

We believe that sidecars create a win-win situation for both the Fund/its investors and the sidecar investors.

Current Fund investors will receive better terms than non-Fund investors, should Fund investors choose to participate in the sidecar.

More details to come.

Cheers,

Paul Moore

Managing Partner | Wellings Capital | www.wellingscapital.com​

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DISCLAIMER: Past performance is no guarantee of future results. There is no guarantee these projected results will be achieved. Investors should consider the investment objectives, risks, charges, and expenses before investing. For a Private Placement Memorandum (“PPM”) with this and other information about the Wellings Real Estate Income Fund, please call 800-844-2188 or email invest@wellingscapital.com. Please read the PPM carefully before investing. Please note that the only Wellings fund currently open for investment is the Wellings Real Estate Income Fund.

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