# Skyline Apartment REIT



## gibor365 (Apr 1, 2011)

Just heared commercial on radio about Skyline Apartment REIT that giving 9% yield. Checked their website and got a little confused...they note "*This investment is available to Accredited Investors only or to those who are otherwise exempt.* . Who's Accredited Investors and who's exempt?
Is anyone invested into Skyline Apartment REIT ?


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## andrewf (Mar 1, 2010)

Accredited investors need to meet some criteria in terms of income, financial assets, etc. or you can invest $150k as a non-accredited investor. In Ontario, the criteria are as follows:

http://www.osc.gov.on.ca/en/21943.htm

Allows you to raise any amount from qualified investors

Who qualifies as an accredited investor?

An individual who, alone or together with a spouse, owns financial assets worth more than $1 million before taxes but net of related liabilities or
An individual, who alone or together with a spouse, has net assets of at least $5,000,000.
An individual whose net income before taxes exceeded $200,000 in both of the last two years and who expects to maintain at least the same level of income this year; 
or 
An individual whose net income before taxes, combined with that of a spouse, exceeded $300,000 in both of the last two years and who expects to maintain at least the same level of income this year
An individual who currently is, or once was, a registered adviser or dealer, other than a limited market dealer
Financial institutions
Governments and governmental agencies
Insurance companies
Pension funds
Registered charities
Certain mutual funds, pooled funds and managed accounts
Companies with net assets of at least $5 million
persons or companies recognized by the OSC as an accredited investor



As far as Skyline goes, I can't recall whether I've heard bad things about them. With these private REITs, I think you should be very careful. Centurion sounds like the best of the bunch to me, and League seems sketchy. I wouldn't plunk down $150k, and I'm not an accredited investor, so I'm staying away for now.


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## gibor365 (Apr 1, 2011)

Andrew, thanks for taking time to reply 
Do you know if Centurion has the same 150K minimum? 150K sounds too big for me, I'd go for it if I 99.99% sure. Have you heard about any big issues with private REIT? Do you have any guarantee on those 150K?
Also I'm wondering how those dividends are taxed?


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## andrewf (Mar 1, 2010)

All private REITs (and private companies) have accredited investor requirements. Only publicly listed companies are not subject.

Issue? League REIT recently terminated distributions, even though they are still advertising through internet ads claiming 8% yields or something.

No guarantee on the $150k. You have an equity interest in the REIT and could lose it all. Private REITs are taxed much like public REITs, a mix of Return of Capital, Ordinary Income and Capital Gains which will vary from REIT to REIT.


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## gibor365 (Apr 1, 2011)

. Just was thinking about putting some money away from financial markets/institutions fro better diversification. I know some guys who buying gold/silver coins, this idea doesn't appeal to me and ... Unfortunately investments those REIT looks too robust...


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## Chris L (Nov 16, 2011)

I know a crap load about skyline. Did all the research, just got cold feet. They have a 90 page memoradum that is required reading. In it is stated that nothing is guaranteed and you can lose your entire investment. There's nothing hidden, but the company works in it's own favour first. Naturally, if the **** doesn't hit the fan, all is well, but if there is a crisis (dream something up - I personally couldn't come up with a likely scenario to lose your entire investment...) then you could be out of luck.

I personally know the owners of the company, and one of them lived next door to me.

What was said above is right. Taxes are highly favourable. As they state it, they do ROC and if you never sell your "units" then you never pay income tax...they pay out monthly btw.

9% is "guaranteed" as long as they can pay that out and for the time being everything is peachy.

In the 90 page memorandum, it spells out all their cashflows, all the buildings they own, etc.

Biggest draw back is that it's private, so they operate outside specific regulations that public companies run. So there's a bit of lack of transparency...even though they are honest people. I just worried about what might happen if they go pushed up against a hard place and as a little guy would probably get smooshed.

However, because they seem honest, this is something you might not have to worry about.

In a perfect world, I'd stuff a crap load of money into their REIT and sleep well and be worry free.

That lacks some diversification though. Coming from a duplex though, the money is pretty close to going in the same level of risk - except I wouldn't own squat if things went sour.

If you gather up more thoughts about the REIT, please post back and help me take the plunge! 

They have investor seminars and meetings. Email them and they'll let you know when the next one takes place.

If you want out of the REIT, how do you sell your units? That's the one that killed me. They offer to "buy them back" themselves...although they are NOT required to do so. That part just seemed sketchy. If you had a mil net worth...I'd put up 150k into skyline...that's a no brainer.


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## gibor365 (Apr 1, 2011)

I also was wondering about how to sell units and how long does it take... Another question, if I invest 150K, can I after some time to sell part of it? Or 150K is minimum on the account? This is why it would be interesting to know about real person who has those shares and sold some of them. To tell the truth I'd invest maybe 15-20K , but 150K is too risky mostly because this is practically all my Cash account (HISA) money where I get about 1.8% on average and can use it anytime.


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## venter (Apr 10, 2009)

I have units in Centurion REIT and have made inquiries to Skyline. They have a waiting list of people trying to purchase units if I remember correctly.


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## Chris L (Nov 16, 2011)

150k is the minimum. They won't let you sell out part of your units below the 150k threshold - that's a government regulation to meet the accredited investor status. A few years ago they were fined for allowing investors in whom did not meet the requirements. Much of these investors were early investors who bought into skyline when it pooled individual people to buy individual buildings - a syndicate. When the government looked into them, they had to go public or rearrange their business. So they turned to private REIT status and enforced their accredited investor position to satisfy the government. Generally speaking, it's the company who buys the units back - although really it's another investor that buys your units from you so there always needs to be an investor behind you to catch your sale. So the issue lies with liquidity. It's not the sort of thing you can just buy and sell - it's private, no public. If you're looking for a 5-10 year investment or a lifetime investment, this is something you might interest.

They're always looking to buy new buildings so they periodically issue new offering memorandums. There can sometimes be a list of people....

Last I heard they were looking at making a commercial property specific REIT. This was from an email from them. 

I'd love to put in 50k and boost this...but the government doesn't think it's safe for me to do this - I'm not accredited! What a stupid rule that is.


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## gibor365 (Apr 1, 2011)

It's really stupid! 50K it's not safe for me, but 150K would be safe?!


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## andrewf (Mar 1, 2010)

Personally, I think it does more harm that good. Some people will stretch and put in $150k, even if that is a large % of their net worth. Some people will get into trouble that way. I'd be fine if they limited investments by non-accredited investors to $10,000 with an explicit lock-up to deter people who think they can trade it readily.


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## Berubeland (Sep 6, 2009)

The reason for the accredited investor status is to keep people who may be unsophisticated investors from investing in them. 

As for venter...if they have a list of people who want to invest why are they running ads on the radio?


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## andrewf (Mar 1, 2010)

^ +1

Waiting list seems like a gimmick... like developers paying people to wait outside the condo sales office.


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## ddkay (Nov 20, 2010)

Berubeland said:


> if they have a list of people who want to invest why are they running ads on the radio?


That's a good question, any business that canvasses door to door or uses radio/tv to promote themselves raises red flags for me.. something seems off.


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## gibor365 (Apr 1, 2011)

andrewf said:


> Personally, I think it does more harm that good. Some people will stretch and put in $150k, even if that is a large % of their net worth. .


Exactly! Yes, we can invest 150K, but it would be basically all our liquid cash and if some government structures thinks that this is safer, than they are stupid. Every company should decide by themself what minimum investment they accept.
Or maybe somebody at the top thinks that investing money into Nortel or Enron was much safer than Private REIT?!
_who may be unsophisticated investors _ so logically from this statement following that more money you invest , more sofisticated investor you are?! Also there is a window for different "schemes". For example 5 investors creating pool and everyone invest 30K and than they share dividends, and to avoid tax they can register those 150K on person who doesn't have other income and practically all dividends become non-taxable.
or someone can advertise 6-7% income on any size investment , invest into Skyline and have 2-3% income without doing anything


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## gibor365 (Apr 1, 2011)

andrewf said:


> Personally, I think it does more harm that good. Some people will stretch and put in $150k, even if that is a large % of their net worth. .


Exactly! Yes, we can invest 150K, but it would be basically all our liquid cash and if some government structures thinks that this is safer, than they are stupid. Every company should decide by themself what minimum investment they accept.
Or maybe somebody at the top thinks that investing money into Nortel or Enron was much safer than Private REIT?!
_who may be unsophisticated investors _ so logically from this statement following that more money you invest , more sofisticated investor you are?!


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## gibor365 (Apr 1, 2011)

ddkay said:


> That's a good question, any business that canvasses door to door or uses radio/tv to promote themselves raises red flags for me.. something seems off.


Sometimes this is true, but not always.... everyone heard a lot of times comercial "I'm lovin' it" or "Intel inside", but it doesn't mean that MCD and INTC bad stocks and produce bad products.


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## Chris L (Nov 16, 2011)

ddkay said:


> That's a good question, any business that canvasses door to door or uses radio/tv to promote themselves raises red flags for me.. something seems off.


Who do you buy your stuff from then? Local shops?


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## andrewf (Mar 1, 2010)

I took what he meant to be companies that advertise for investment, like Nortel did just before it imploded (they paid a huge amount to license 'Come Together' by the Beatles).


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## ddkay (Nov 20, 2010)

I did mean for investment. Of course consumable products should be marketed.


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## Mall Guy (Sep 14, 2011)

the basic idea of a private REIT investment is a longer term play, hoping for a liquidity event (they get taken public or taken over), otherwise assume your in for the long run . . . and go and meet management, get a vibe for the office and the staff. . . there are some to absolutely stay away from (they are in a league of their own !!!)


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