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10 Reasons to Consider a DST 1031 Exchange

A Delaware Statutory Trust or DST is a separate legal entity created as a trust under Delaware Statutory Law. A DST allows you to co-invest with other investors in one or numerous properties. Although DSTs aren’t new, current tax laws have made them popular among 1031 exchange investors.

Purchasing into a Delaware Statutory Trust is treated as a direct interest in real estate, you are assigned fractional ownership of equity and debt, fulfilling your exchange requirements. Minimum investments are typically between $25,000 and $100,000; therefore, a single investor may own a fractional interest in an entire property or portfolio and receive distributions from the operation of the trust, from rental income and the eventual sale of the assets.

10 Reasons to Consider a DST 1031 Exchange

Over the next two weeks we are going to share 10 reasons why we keep talking about DSTs. Here are the first five:

1. No management responsibilities for you.

If you’ve owned rental real estate in the past, you know that property management is time-consuming and stressful. Some investors find that it can be a major relief to hand over the management and the decision-making responsibilities to a professional team of experienced managers.

2. Acquire investment-grade, high-value properties.

Most real estate investors cannot afford to invest in multi-million-dollar properties on their own. Delaware Statutory Trusts provide a unique opportunity for investors to acquire partial ownership and experience the benefits only found with these types of properties.

3. Opportunities for diversification.

Because you can choose the amount you invest in a Delaware Statutory Trust, you can split your investment among multiple DST properties, giving you an opportunity to diversify your real estate portfolio.

4. Regular distributions.

DSTs are permitted to keep a reasonable amount of cash reserves to be prepared in the event the property requires repairs or faces unexpected expenses. However, all earnings and proceeds above the reserve amounts must be distributed to the beneficiaries on a regular basis and within the expected timeframe.

5. Investors do not have to qualify for the debt.

Investors do not have to qualify for the property’s mortgage loan. The Delaware Statutory Trust is the only entity liable for the mortgage loan and it is nonrecourse to the investor. 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.

Learn More About DSTs

This material does not constitute an offer to sell or a solicitation of an offer to buy any security. An offer can only be made by a prospectus that contains more complete information on risks, management fees and other expenses. This literature must be accompanied by, and read in conjunction with, a prospectus or private placement memorandum to fully understand the implications and risks of the offering of securities to which it relates. As with all investing, investing in private placements are speculative in nature and involve a degree of risk, including loss of your principal. Past performance is not necessarily indicative of future results and forward-looking statements and projections are not guaranteed to achieve the results described and your actual returns may vary significantly. Investments in private placements are illiquid in nature and there may be no secondary market or ability to sell the investment should the need for liquidity arise. This material should not be construed as tax advice and you should consult with your tax advisor as individual tax situations will vary. Securities offered through Capulent, LLC, member FINRA, SIPC.