The prospectus for the American Realty Capital n/k/a American Finance Trust (AFIN) states that the investment “involves significant risk and is suitable only for persons who have adequate financial means, desire a relatively long-term investment and will not need immediate liquidity from their investment.” Many financial advisors pitched Non-Traded REITs as safe, income producing investment vehicles. Schorsch and American Financial Realty Trust have recently been the subject of regulatory scrutiny and shareholder lawsuits that have resulted in settlements measuring in the tens of millions. Non-Traded REITs are only suitable for investors with a long-term investment horizon who are willing to accept higher levels of risk in their investments.ĪFIN is managed by American Financial Realty Trust, which is principally owned by Nicholas Schorsch.
7%) and the investments themselves may be subject to extreme volatility due to associated risk factors.
Typically, the commissions generated on Non-Traded REITs are higher than industry norm (approx. The underlying collateral of the REITs consists of income producing residential or commercial real estate. For this reason, Non-Traded REITs can be illiquid, meaning investors may be unable to sell their investments on demand. Non-Traded REITs are securities that do not trade on a public securities exchange.
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