1031 Funds and Syndication

[Aaron W.]

1031 funds are not allowed to invest directly with a syndication as a LP. I've heard that one can use a Delaware Statutory Trust (DST) or Tenant In Common (TIC) to partner with a syndication.

Anyone have experience with this and can explain how it works? How does one go about setting up a DST or TIC? How much does it cost? How quickly can it be set up?

TIA

[Brandon Bruckman]

Large syndicators (sponsors) will set up the DST or TIC for you. All you do is bring the cash. With that said, there is an upfront fee load to participate in these investments. That can vary from 10%+.

Another option you might want to look at is not performing the 1031 exchange and estimating how much year one loss there would be an a LP syndication with bonus depreciation and cost segregation studies.  I'd work with a CPA and the sponsor to figure out how much gain you could offset.  

Thanks
Brandon