Those are two of the privat placements my commission-hungry broker convinced me to put my money into. One of the greatest difficulties I have with both of them is to ascertain whether they are run-of-the-mill rip-off companies, being that the "cash dividends" and "interest" are my capital being returned to me, or if the numbers are actual cash, not coming out of my capital.
NetREIT sent me a notice just the other day proudly announcing that it was paying its 48th consecutive quarterlly dividend, which for me amounted to $748 dollars. I have owned 5000 shares of NetREIT for 2.5 years, and the company intends to go public in 2013. Their financials make it very hard to understand where, except from capital, they could be finding the money to pay such cash dividends. Also, I think that if they are able to put together the kind of money it takes to get listed on a major exchange, the price of the stock will immediately plummet. The $748 dividend NetREIT is paying would, by the year 2013, come to about a 30% gain, and then of course I'd have my 5000 shares of the now publicly traded company...
Does that or does that not sound like "pigs flying?"
An officer at United Development Fund assured me that the 9.75% simple yearly interest I'm receiving is not coming from my capital because UDF is in the business of making loans. He said that in 2013 I may be eligible to redeem my entire 50,000 without penalty. Does that sound real? Someone wanted to know why UDF's clients can't find cheaper places to get loans, but I do know that with things the way they are, there could well be clients willing to pay that much interest. The loans are short term--- 12 to 20 months.
Any help/comments would be greatly appreciated.