Last week we discussed what you should do while investing in a DST; this week, we will show you “5 Don’ts of DSTs.”
When investing in a DST, you don’t have to:
1. Manage the property.
Investors can hand over the management and the decision-making responsibilities to a professional team of experienced managers. With a DST, investors can still enjoy the benefits of owning real estate without dealing with the tenants, toilets, and trash.
2. Take on liability for the property.
The DST is the sole owner of the property. The investors are beneficiaries of the DST. Since the investors do not have deeded title on the property, they do not have any personal liability. Even if there are unexpected problems with the property, beneficiaries cannot lose more capital than what they invested in the DST.
3. Qualify for debt on the property.
DST investors do not have to qualify for the property’s mortgage loan. The DST is the only entity liable for the mortgage loan. Therefore, investors do not have to provide personal documentation for loan approval and do not have to worry about other personal assets or liabilities affecting the status of the loan.
4. Get stuck with boot, invest the amount that corresponds to your 1031 exchange requirements.
With a DST, you can invest the exact amount you want to invest. There is no reason to overextend yourself financially or, worse, leave equity un-invested. Whether you are investing all your exchange funds into a DST or investing a leftover amount after acquiring a property that didn’t quite match your exchange value, there is no reason to pay taxes on boot when a DST is an option.
5. Search far and wide for a DST that fits your specific criteria.
1031Crowdfunding.com is an online marketplace where real estate investors can find, view, and purchase a variety of available, turn-key, investment-grade properties. We present investors with 1031 exchange-qualified properties through DSTs to ensure every 1031 exchange investor has the opportunity to complete a successful exchange.
