Can't increase rents within a DST?!

[Kevin Kraver]

I'm a CA resident looking at putting rentals from multiple states (including CA) into a DST. I'm wanting the series asset protection and to avoid the $800 CA LLC Franchise Tax. However, I am getting some conflicting information about DSTs. I have heard that they are easily scalable (i.e. I should be able to add new properties as I scale my portfolio). However DST is also described as holding long-term and/or passive investments, it is not for an active real-estate business. I came across these '7 deadly sins of  DST' which seem to suggest that I would NOT be able to, add additional equity, refinance or add additional mortgages, renegotiate leases (i.e. increase rent). These rules are written from the perspective of investing 1031 exchange funds into someone else's DST. If I establish my own DST (and do not accept outside investment) are the rules different?  

Anyone out there using a DST have issues with regular real estate activity such as increasing rents, refinancing, upgrading, adding properties to their portfolio? Thanks!

[Jillian Sidoti]

Hi. Just Google the 7 deadly sins of dsts. It has been a rare day where I could get a DST to work right.