Turning Locked Wealth into Cash Flow with REITs
If you're a tech employee with RSUs (Restricted Stock Units) vesting over multiple years, you're sitting on wealth you can't access—yet. At Equity Earn, we help you unlock that potential by borrowing against your vesting equity and deploying it into Real Estate Investment Trusts (REITs), transforming locked compensation into immediate cash flow.
Understanding REITs: Your Path to Passive Income
A Real Estate Investment Trust (REIT) is a company that owns, operates, or finances income-producing real estate across various property sectors. Think of it as a mutual fund for real estate—but instead of buying stocks, you're investing in portfolios of properties, from apartment buildings and office spaces to data centers and hospitals.
How REITs Work
REITs are required by law to distribute at least 90% of their taxable income to shareholders as dividends. This unique structure makes them exceptional income generators, providing steady cash flow to investors—exactly what you need when your equity compensation is locked in a vesting schedule.
The Problem: Trillions in Locked Equity
Tech employees today face an unprecedented challenge: massive wealth tied up in unvested equity compensation.
The Scale of Locked Wealth
The numbers are staggering:
Amazon alone reported $22.1 billion in unvested stock compensation as of June 2024 (SEC 10-Q Filing)
Major tech companies collectively hold hundreds of billions in unvested employee equity
The average tech employee at FAANG companies has $200,000-$400,000+ in total compensation, with equity often representing 40-60% of that amount
RSUs typically vest over 3-4 years, with many employees accumulating multiple overlapping grants that create a "vesting cliff" of locked wealth
For many professionals, this means having significant net worth on paper but limited liquidity to invest, purchase property, or generate passive income streams.
The Cost of Waiting
While you wait for your equity to vest:
You miss investment opportunities
You can't diversify your concentrated position
You pay opportunity costs on capital that could be generating returns
Your wealth remains tied to a single company's stock performance
The Solution: Borrow Against Your Equity, Invest in REITs
Equity Earn bridges this gap by allowing you to borrow capital against your RSUs or vesting equity and deploy it into REITs, creating immediate cash flow from locked wealth.
Why REITs Are the Perfect Match
REITs have demonstrated exceptional long-term performance:
Historical Returns
25-year average: REITs delivered 9.74% average annual returns (1998-2022) - FTSE Nareit All Equity REITs Index
20-year returns: REITs typically averaged between 11.1% and 11.9% annually over 30-year periods
Consistent outperformance: REITs outpaced the S&P 500 in 82% of 30-year historical periods
2024 performance: REIT analysts project 9.5% total returns for 2025, aligning with long-term averages
Dividend Power
REITs must pay out 90% of taxable income as dividends
As of February 2025, equity REITs offered dividend yields of 3.8%
Approximately 50% of REIT total returns come from dividends
REITs paid an estimated $92.3 billion in dividends to shareholders in 2021
Lower Volatility
REITs showed a 9.0% standard deviation in 10-year returns vs. 16.0% for U.S. stocks
More predictable long-term performance compared to equity markets
Low correlation with other asset classes provides portfolio diversification
Top-Performing REIT Sectors
Different REIT sectors have shown varying performance:
Self-Storage REITs: 16.7% average annual return since 1994 (highest performer)
Data Center REITs: 25.2% return in 2024
Healthcare REITs: 24.2% return in 2024
Regional Malls: 27.4% return in 2024
How It Works: The Equity Earn Advantage
Access Your Locked Wealth: Borrow against your unvested RSUs or vesting equity
Deploy Into Income-Producing REITs: Invest in diversified real estate portfolios
Generate Immediate Cash Flow: Receive regular dividend payments (averaging 3.8% yield)
Benefit From Capital Appreciation: REITs historically deliver 9-11% total annual returns
Maintain Your Equity Upside: Your RSUs continue to vest while generating investment returns
Real-World Example
Consider a senior engineer at Meta, Google, or Amazon with:
Base salary: $200,000
Annual RSU vesting: $300,000+
Total unvested equity: $1,000,000 over 3-4 years
Without Equity Earn:
Wait 3-4 years for full vesting
Miss investment opportunities
No immediate cash flow from locked wealth
All wealth concentrated in employer's stock
With Equity Earn (30% LTV):
Borrow $300,000 against $1,000,000 in unvested equity
Deploy $300,000 into diversified REITs
Generate ~$11,400/year in dividend income (3.8% yield)
Benefit from potential $27,000-$33,000/year in total returns (9-11% appreciation)
Continue holding underlying RSUs as they vest
Total potential annual benefit: $38,400-$44,400 while maintaining your equity position
The Tax Advantage
REITs offer unique tax considerations that can benefit your overall investment strategy. Since they distribute most of their income, you receive regular cash flow that can help offset any interest costs from borrowing against your equity.
Why Now?
The convergence of several factors makes this the perfect time to leverage your equity:
Record levels of unvested equity in the tech sector
Strong REIT fundamentals with solid occupancy rates and NOI growth
Attractive valuations after recent market adjustments
High dividend yields providing immediate income
Long-term appreciation potential backed by decades of data
Diversification Beyond Your Employer
One of the biggest risks for tech employees is concentration risk—having both your income and net worth tied to a single company's performance. By borrowing against your equity and investing in REITs, you:
Diversify into real estate while maintaining your tech position
Create income streams independent of your employer's stock price
Build a more resilient financial portfolio
Protect against company-specific risks
Looking Forward
As tech compensation packages continue to grow and vest over longer periods, the need for liquidity solutions becomes more critical. REITs provide a proven, income-generating asset class with:
Over 50 years of historical data
Consistent dividend payments
Long-term capital appreciation
Low correlation with tech stocks
By partnering with Equity Earn, you can transform your locked equity into working capital, generating cash flow today while maintaining your long-term wealth accumulation strategy.
Key Takeaways
✓ Massive opportunity: Hundreds of billions in unvested equity sits locked in tech companies
✓ Proven returns: REITs deliver 9-11% average annual returns over long periods
✓ Immediate income: 3.8% average dividend yield provides steady cash flow
✓ Lower risk: REITs show less volatility than stocks with more predictable returns
✓ Smart diversification: Reduce concentration risk while maintaining equity upside
✓ Access your wealth: Don't wait years to put your equity to work
Ready to turn your locked equity into cash flow? That's the Equity Earn difference.
