DST as possible holding place for gains

[Kenneth LaVoie]

WE're about to sell 1.4M in RE consisting of our 4 buildings totaling 22 units. Scary! They're our "final four" and paid off, giving us 6 figures in cash flow but we're 56 and want to move onto next stage. Turning them over to manager doesn't interest us. BUT ... shoot, we're going to pay Uncle Sam a quarter mil more or less! These buildings cost just over a half mil 10 years ago, so much will be gain (and 10 years of depreciation recap). 

We are NOT ready to buy in Florida though that's where we eventually see ourselves. We're just not ready. yes, we could do a VRBO but we're basically selling overpriced real estate then 1031x'ing into VERY overpriced RE down there. We were thinking of doing a 1031X into a DST, so that our money has a place to sit, protected from taxes, THEN when we're ready we can 1031X out of the DST into the Florida VRBO or whatever we decide.

The problem is I don't REALLY know how to assess the risk. I LOVE diversification. I like to be able to put 5K-10K into several crowdfunded deals vs. 100K into one, and DST's arent' great for that. It SOUNDS like most of them are very stable "core" or "core plus" which I'm just now learning the definition of. It's just scary and I could use some handholding here. I know nothing is risk free, but I don't want to tie up 100K or 150K for 6 years, then get 20K back after 10 due to malfeasance or fraud or mismanagement. It's just "new" to me, hence I'm unreasonably petrified, yet it sure would be nice to NOT pay out 200K or so in taxes...

Thanks for any bumps in the right direction, or slaps in the face to wake me up!

[Marcus Auerbach]

@Kenneth LaVoie - though decision. If you liquidate, tax sheltered or not, you are holding value in USD exposed to currently 7.5% inflation, which is basically like a tax. If we see 3-5 years of inflation that really adds up. Inflation devalues savings just as much as debt.

You are probably selling because you don't like dealing with thenants anymore. My way of avoiding this problem is by investing in above median priced single family homes; they have a way lower headache factor.

The other solution is to just refinance, pull money out invest in whatever, let inflation chip away on that loan and bring in a good PM. I suspect that you have heard bad things about cheap PMs.