Why Wealth Advisors are Embracing Investments in Private Mortgage REITs

Why Wealth Advisors are Embracing Investments in Private Mortgage REITs

Wealth advisors are continually seeking investment opportunities that offer a blend of consistent returns, asset security, tax advantages, liquidity, and the potential for higher yields. In recent years, Private Mortgage Real Estate Investment Trusts (REITs) have gained popularity among wealth advisors for their unique combination of benefits. In this article, we will explore why wealth advisors are considering investments in Private Mortgage REITs and the key advantages they offer. 

1. Consistent Monthly Cash Flow: 

One of the primary reasons wealth advisors are drawn to Private Mortgage REITs is the promise of consistent monthly cash flow. These investments are structured to distribute a portion of the income generated from mortgage loans and real estate holdings to investors on a regular basis. This predictable income stream can be particularly attractive to investors seeking steady returns to meet their financial goals. 

2. Security of Real Estate: 

Investing in real estate has long been considered a safe and tangible asset class. Private Mortgage REITs typically focus on mortgage-backed securities or direct real estate lending, which offers a degree of security backed by physical properties. Wealth advisors appreciate the stability and potential for capital preservation that real estate investments provide, especially in uncertain economic times. 

3. Tax Advantages – Qualified Business Income Tax Deduction (QBI) and Unrelated Business Income Tax (UBIT):


The tax advantages associated with Private Mortgage REITs are a significant draw for wealth advisors and their clients. Private Mortgage REITs often qualify for the 20% Qualified Business Income (QBI) Tax Deduction, which can reduce the tax liability for eligible investors. Additionally, these investments are structured to minimize Unrelated Business Income Tax (UBIT) exposure, making them tax-efficient vehicles for generating income. 

4. Liquidity:

 Private Mortgage REITs offer a level of liquidity that traditional real estate investments lack. Investors can buy and sell shares in these REITs on secondary markets, providing a degree of flexibility. This liquidity allows wealth advisors to adjust their clients’ portfolios as needed, aligning with changing financial goals and market conditions. 

5. Higher Returns Due to Higher Interest Rates:

 In a rising interest rate environment, Private Mortgage REITs can potentially offer higher returns compared to other fixed-income investments. These REITs often focus on lending activities with adjustable interest rates, allowing them to benefit from rising rates. Wealth advisors seek opportunities that can provide better returns to help clients grow their wealth over time. 


Private Mortgage REITs are gaining recognition among wealth advisors as versatile investment vehicles that offer consistent monthly cash flow, the security of real estate assets, tax advantages through the QBI deduction and UBIT mitigation, liquidity, and the potential for higher returns in a changing interest rate landscape. While these REITs offer numerous benefits, it’s crucial for investors to work closely with their wealth advisors to assess their individual financial goals and risk tolerance before incorporating them into their portfolios. As the investment landscape evolves, Private Mortgage REITs continue to be a compelling option for diversifying and optimizing wealth management strategies. 

About the Author 

Brock VandenBerg is the President of TaliMar Financial and Fund Manager of TaliMar Income Fund I. Mr. VandenBerg started investing in individual trust deeds in 2008, providing capital to real estate investors taking advantage on the housing crisis. He soon brought in outside investors to share in this lucrative opportunity to earn above market returns. After funding over $375 million in short-term loans and attracting over 500 investors, Mr. VandenBerg launched TaliMar Income Fund I in 2021 to offer investors a much more efficient way to invest in individual trust deeds. Currently, TaliMar Income Fund I invests on behalf of over 220 individual investors with over $60 million in assets under management.  



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