So when you invest into Roots, how do you make money?
Roots works off a quarterly cadence with its investors, and you'll see two things when the quarter flips. The first thing that you'll see is a distribution of profit. And that is profit off of rents, profits off of if we sell a home. We let all investors share in that. And the cool thing about us being classified as a REIT is 90% of profit must be paid out on an annual basis.
The next thing you see is a reevaluation of what's called the Net Asset Value
And that takes into account all of our appraised values for our properties, any new property that we purchased, any cash on hand, and any other kind of accounts receivables that we have out there. And then we subtract our debt, giving us our Net Asset Value number. And I like to think of that as, Hey, we shut the doors down tomorrow, that's what we sell the company for. And then we just simply take that and we divide it out by the number of shares. And that gives us our new unit price.
Unlike a lot of different privately held REITs where you don't necessarily know always what the value is at any certain time, Roots is tracking on a quarterly basis, giving you that new number, and that is what you would sell your unit for.
So that's how you get to realize appreciation within the fund.
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Information contained herein, although believed accurate and compiled from credible sources, is not guaranteed. There can be no assurance the business objectives of the Company will be achieved. Investors may lose all or part of their investment and distributions with respect to such investment are not guaranteed. Past performance is not indicative of future returns.
