LLC is the better way for most people - if you have a very large project or other esoteric considerations at play, a REIT might be better, but the LLC will suffice for the overwhelming majority of situations.
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Is it better to structure an Opportunity Zone Fund as an LLC or a REIT?
Which one has more benefits?
Answers
Keep in mind that an LLC is a legal form and a REIT is a tax classification. The two are not mutually exclusive; you can form an LLC and then elect to have it treated as a REIT (and a qualified opportunity fund (QOF)). So you don't need to weigh the benefits of one against those of the other -- you can have them all. The primary benefit of an LLC is that it offers its owners limited liability protection. The primary benefit of a REIT is that it allows investors to invest in real estate through a publicly traded entity that is not subject to an entity-level tax (subject to exceptions).
It really depends on your economics - a REIT has to pass through 90% of income to qualify as a REIT. You cannot waterfall as you can with an LLC.
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