What is a Collective Trust?
A real estate trust is a trust and investment company that takes advantage of professional financial management and raises funds through the implementation of a trust plan. It is used for real estate development projects to obtain certain benefits for clients.
Real estate trust
- Real estate trust is
- The United States was first established in 1883
- The business content of real estate trust business is relatively broad and can be divided into:
- Entrusted business, such as real estate trust deposits,
- When people are right
- Funds are the basic conditions for real estate trust investment institutions to engage in trust. Premises
- Depending on the funding direction, REIT can be divided into three categories:
- The operation process of a real estate trust can basically be divided into two models: one is the US model and the other is the Japanese model. In the end, these two modes are
- Real estate trusts in the United States usually come in the form of funds. At the establishment stage, the main operating processes are:
- Its operation process is:
- (1) The real estate company sells land and buildings to investors separately, and the investors pay the land and buildings to the real estate company;
- (2) Investors trust real estate property rights
- From the United States and Japan
- 1. Can provide reliable financing channels for real estate clients to promote
- Difference from REITs
- the first,
- The main risks of real estate trust come from: [2]
- (1) Compensation risk. The "Interim Measures for the Management of Trust Funds of Trust and Investment Companies" issued by the central bank stipulates that only when the trust company operates in violation of the trust contract without authorization, the losses suffered by investors shall be compensated by the trust company. In other words, the trust company is not responsible for the risks that occur during the operation. [2]
- (2) Project risk. The risk of a single project is often difficult to evaluate and forecast, and when trust companies issue trust products, they often intentionally or unintentionally introduce the project's profit prospects, and rarely reveal the project risks. risks of. [2]
- (3) Operational risk. The actual operation of the trust company is difficult. China's "fund trust management measures" have a limit of 200 copies of the fund trust plan. Ordinary investors generally have funds in the range of 200,000, 300,000 and 400,000. With a limit of 200 shares, a single amount would be very large, making financing difficult. The trust plan "not more than 200 contracts and the starting point for subscription is not less than 50,000 yuan" is not easy for individual investors to accept. [2]
- (4) Self-risk. Real estate trusts are also flawed. For example, business models are scattered, operating risks are high, and profits are low. In terms of operating models, most products take the form of loans, which are relatively simple. Funds and products are limited to trust certificate transfers and have poor liquidity. [2]
- Trust companies also lack effective means to control the risk of trust investment, that is, loans. Generally, they rely on the follow-up funds of the bank to intervene, or they can be successfully withdrawn by the replacement of bank funds. Withdrawal often depends on the level of support from the bank. Therefore, under the current environment of China, real estate trust must cooperate closely with banks, and the risk of operating independently is very high. However, whether the bank's subsequent lending is greatly affected by policy factors and environmental changes. When trust companies make investment (or loan) decisions, it is difficult to grasp these potential influencing factors. Therefore, the trust company's decision-making always has certain risks. No rules to avoid. [2]