Not every real-estate-curious client wants to own a building. Some have cash to invest and want the income and diversification of real estate without tenants, toilets, or a mortgage. For them, a private or non-traded REIT can fit — and while you can't sell it, the agent who recognizes that need and makes the right introduction stays the client's trusted real-estate person. This guide covers how REITs fit your conversations, where your license stops, and how the knowledge builds your business.
- A private or non-traded REIT gives a client diversified, passive real-estate income with new cash — no property to buy or manage.
- REITs are securities: you educate and refer to a licensed firm; you don't sell or advise on them.
- Unlike a 1031, this serves the client who has cash to invest (not a property to sell) — a different, valuable segment.
- Knowing the option keeps you the trusted real-estate advisor and builds referral relationships with licensed firms.
What a private REIT is (the agent's version)
A REIT is a company that owns income-producing real estate and pays most of its income out to investors. A public REIT trades like a stock; a non-traded or private REIT isn't exchange-listed and offers limited liquidity, in exchange for a value tied to the real estate rather than the stock market. For your clients, the appeal is simple: real estate income and diversification without owning or managing a property. The distinctions among the three types, and the tax treatment, are in our REITs guide and the CPA version. What you need is to recognize the client who wants exposure but not a building.
The securities line: educate and refer
REITs — public, non-traded, or private — are securities. Private and non-traded REITs in particular are sold by licensed representatives, the private ones only to accredited investors. Your real estate license doesn't let you sell them, recommend a specific REIT, or earn securities compensation. As with DSTs, your role is to educate and refer to a licensed firm and the client's financial advisor. The boundary is the same one that runs through this whole series, and it's what makes the referral relationship — not a securities commission — your path to value.
Where it fits in your conversations
The REIT conversation surfaces with a different client than your typical seller: the one with cash to deploy, not a property to exchange. The buyer who's been priced out of a rental purchase and is frustrated. The client who sold and doesn't want to 1031 into another building. The professional who wants real estate in their portfolio but has no interest in being a landlord. The retiree wanting income. When a client expresses interest in real estate as an investment but resistance to ownership, that's your cue — and pointing them to the right vehicle keeps you in the conversation even when there's no property to transact.
How to talk to your client about it
Acknowledge the goal and refer. A script: "It sounds like you want the income and growth of real estate but not the headache of owning a building. One way to do that is through a REIT — essentially owning a slice of a professionally managed real-estate portfolio. I'm not licensed to sell or advise on those, but I can introduce you to a firm that handles them and to your financial advisor." If they're also open to direct ownership, keep that door open too: "And if you'd ever consider owning a property after all, that's what I do — let's stay in touch." You've served the client's actual interest without overstepping, and you've kept the relationship.
How your clients use it
Clients use private and non-traded REITs for passive, diversified real-estate income with capital that isn't tied to a 1031 — building a real-estate allocation without concentration in a single property, generating income in retirement, or simply participating in institutional real estate they couldn't access alone. They accept illiquidity and rely on professional management. For agents, understanding these motivations helps you recognize when a client's real goal is exposure rather than ownership — and to respond with a useful introduction instead of a sale you can't make.
How it grows your business
- Serve the cash investor, not just the seller. REIT awareness lets you help clients who have money to invest but no property to transact — a segment most agents ignore.
- Stay the trusted advisor. When you point a client to the right solution even when you don't earn a commission, you earn the next listing and the referral.
- Build referral partnerships with licensed REIT/advisory firms — relationships that send real-estate business back your way.
- Round out your offering. Direct purchase, 1031, DST, and REIT together let you answer every "how do I invest in real estate?" question a client brings.
- Nurture your sphere with content on "real estate investing without buying a building," capturing interest you can route appropriately.
Frequently Asked Questions
Can a real estate agent sell a REIT?
No. REITs are securities; private and non-traded REITs are sold by licensed representatives (private ones to accredited investors). Agents educate clients and refer them to a licensed firm and the client's financial advisor.
How is a REIT different from helping a client buy property?
A REIT gives passive, diversified exposure with cash and no building to manage; buying property is direct ownership you transact. The REIT serves the client who wants real-estate income without ownership — a different need.
Which clients are a fit for a private REIT?
Those with cash to invest who want real-estate income and diversification but not ownership — frustrated would-be buyers, sellers not doing a 1031, busy professionals, and income-seeking retirees. Private REITs require accredited status.
How does this help my business if I can't sell it?
It lets you serve clients who have money to invest but no property to transact, keeps you the trusted real-estate advisor, and builds referral partnerships with licensed firms — all of which lead back to listings and referrals.
What should I say to a client interested in a REIT?
Acknowledge they want real-estate income without owning a building, explain a REIT provides that, and refer them to a licensed firm and their financial advisor — while keeping the door open to direct ownership if they reconsider.
Glossary
- REIT
- A company owning income real estate that pays out most of its income; a security.
- Non-Traded REIT
- An SEC-registered REIT not exchange-listed, with limited liquidity.
- Private REIT
- A Regulation D REIT offered only to accredited investors.
- Referral
- Educating a client and introducing them to a licensed firm — the agent's compliant role.
Disclosures
This guide is published by Baker 1031 for general informational and educational purposes for real estate professionals and investors. It is not tax, legal, investment, or accounting advice. Real estate agents and brokers are not, by virtue of their real estate license, qualified to give tax or investment advice or to sell securities; encourage clients to consult their own CPA and attorney, and refer securities questions to an appropriately licensed professional.
Delaware Statutory Trusts, Opportunity Zone funds, REITs, and oil & gas programs are securities that may be offered and sold only by appropriately licensed persons to verified accredited investors via private placement memorandum under Regulation D. A real estate license does not authorize the sale of, or transaction-based compensation on, securities. Any referral or compensation arrangement must comply with applicable securities and real estate laws. Securities offered through Aurora Securities, Inc., member FINRA / SIPC; Baker 1031 Investments is independent of Aurora Securities, Inc.
