1031 into DST info

[Kenneth Hynes]

Hello - BP Community - I am looking for someone that has gone through the 1031 process into a Delaware Statutory Trust (DST) I have several SFR that have built up some equity and I am not getting the return on equity anymore , so looking at options in the Multi family as well as DST space . I am not looking for brokers , just investors that have 1031'ed into a DST so I get get their perspective and how it went for them , and any tips if I go that route

[Dave Foster]

@Kenneth Hynes, From the 1031 side (the sale and purchase operation) it looks no different. In fact there's actually some advantages to the DST route. They can many times fill more slowly so you have a little runway to work with. You avoid an actual real estate closing and costs. And if working with a good broker they'll have a selection of reserved DSTS that they can carve off and hold for a bit for you while you're doing further due diligence.

It's that due diligence that's key because for the normal real estate investor these are different animals.  They are securities but backed by real estate and commercially evaluated real estate at that.  So you need an investment banker that is more than just someone with a license.  They need to understand SEC, think like a property inspector, and be able to evaluate leases and tenants like a commercial broker.

This is a very natural time in the market for you to be making this move.  The nice thing about DSTs is that once in you can always 1031 back out when the project sells.  And if the timing works out right for you it will be just after the next crash and crater in regular real estate.

BTW - Even if you end up focused on MF, a good DST can be a great back up option to save the 1031 if you can't find the right replacement.