Given today's real estate market conditions of rapidly rising rental rates, attractive rates of return and potential appreciation of the property, private real estate ventures are providing investors with opportunities to diversify their investments. Most prudent financial planners recommend asset allocation between stocks, bonds and recommend 5% to 10% invested in real estate investments.

Private real estate ventures provide investors, who are also businessmen and decision makers, an opportunity to actively participate in their real estate investments. This allows more control over their investments which may provide better returns than passive investments in real estate partnerships or REIT's.

The initial step in a private real estate venture is the selection of a real estate brokerage firm to assist in finding potential real estate acquisitions. A Certified Public Accountant (CPA) who practices in the real estate industry is a good source of referral for investors engaging a real estate firm.

Before the real estate firm's search for potential acquisitions, the investors should furnish the real estate firm with such information as:

* Cash available for investment.

* Region or location of the property.

* Acceptable rate of return, ie., cash on cash and total returns.

* Types of investments, commercial office building, residential rental, warehouse, etc.

When engaging a real estate firm, the investors should reach an agreement, preferably in writing, as to how the real estate firm is compensated. This includes the fee for selection of property, broker commissions for tenants, management services or any other technical services provided.

As to potential acquisitions, in addition to the purchase price, an offering brochure should be obtained from the seller's brokers. This brochuer should include information about the physical descriptions of the property, capital improvement programs, property information, historical and budgeted operations, prospective cash flows and net operating income, and tenant information (including background and tenant lease information).