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 Excerpt from the Wall Street Journal’s Plots & Ploys, to view the entire article click here).

Land Lender Liquidity

The latest of the so-called nontraded real-estate investment trusts looking to allow its investors to cash out is a REIT that lends to home builders in Texas.

United Development Funding IV, a Grapevine, Texas-based lender and debt investor, said this week that it plans to list its shares on the Nasdaq stock exchange later this year.

Nontraded REITs are publicly owned, but their shares aren’t traded on any public stock exchange. Instead, their shares are sold through a network of brokers to small mom-and-pop investors.

The REITs then use the money they raise to buy properties or make real-estate loans. If all goes according to plan, they eventually give investors an opportunity to cash out through steps such as selling the funds or listing the REITs on a stock exchange.

Since its inception in 2009, UDF IV has sold more than 32 million shares to small investors through a network of independent brokers for $20 apiece, raising $642.3 million.

The REIT, led by Texas real-estate investor Hollis Greenlaw and former D.R. Horton Inc. executive Stacey Dwyer, makes and buys land loans. The firm hopes to capitalize on the improving housing market in the Lone Star state.

—Kris Hudson