All Forum Posts by: Natalie Bender

@Arthur Savery there are some great comments already provided. I agree with what has already been said. Many investors will 1031 exchange into another property and list DSTs as a back up on the 45 identification form incase the property falls through. 

DM if you would like to discuss this strategy further. 

You could also look into DSTs for 1031 eligible fractional passive ownership of institutional properties. 

Here is a blog post from the Founder of my company that may speak to you. Would love to chat if you have any follow up questions.

https://www.biggerpockets.com/member-blogs/7993/48729-are-your-rental-properties-weighing-you-down

Thank you Tony for the shoot out.

Hello Isaac,

Taking the step from active landlord to passive investor can be scary and overwhelming. At Archer we pride ourselves on education, even if that results in DSTs not being the right fit for you.

Below is my contact information, please reach out and we can due a deep dive to see if DSTs is the right investment for your goals. 

BDs and Registered Reps are also registered with FINRA and must act as a fiduciary to their clients. We also complete due diligence and provide education to clients based upon their specific investment objectives. 

Greg Scott is correct, you will have to pay capital gains tax on any monies you take possession of. If you are under contract talk to a qualified intermediary immediately!! As for title, you need to 1031 exchange under the same name as the relinquished property. If that property is till under the LLC you will need to purchase under the LLC.

If you have taken ownership of the sale proceeds your next homework assignment is to look into Qualified Opportunity Zones and Qualified Opportunity Funds (QOZ, QOF), note the same accredited investor status still applies. 

A quick summary:   

A Qualified Opportunity Fund is an investment vehicle organized as either a partnership or corporation that holds at least 90% of its assets in Qualified Opportunity Zone property. QOFs can make investments in a wide variety of real estate and new or existing businesses, including commercial real estate, housing, infrastructure, and start-up businesses. QOFs can hold single or multiple assets. QOZ property includes interests held by the QOF in a Qualified Opportunity Zone Business (“QOZB”)

An investor has 6 months from the sale of a property to invest, and the rules permit actual receipt of the sale proceeds. You only have to invest the capital gain from the sale (partial capital gain investment is ok). Under the current law, the taxes would be deferred until 12/31/2026 and ultimately due by 04/15/2027. The QOZ community believes that there is bipartisan support to extend the deferral period.

If you remain in an QOZ for 10 years than any growth/appreciation on your original investment is returned tax free. For example, if you invested $100K and after 10 years the value of the investment is $200K, one could cash out the entire $200K tax free. 

Hope that helps!

DSTs (Delaware Statutory Trusts) are as close to passive real estate investing as you can get while still holding real estate and having most of the same tax benefits.

DSTs function as investment vehicles that hold ownership of income-generating properties, granting investors fractional ownership in various types of commercial real estate such as apartments, self-storage facilities, build-for-rent properties, and NNN (triple net lease) properties. Opting for a DST allows investors to spread their investments across multiple high-quality properties, benefiting from the advantages of a 1031 exchange to defer capital gains tax. Additionally, this structure eliminates the need for active management, as the real estate assets within the DST are managed by the sponsoring entity.

As an investor your level of activity would include collecting monthly distributions, receiving  quarterly reports on investment, file taxes annually and 1031 exchange your investment every 7-10 years (sometimes shorter depending on the market). DSTs are considered real estate securities and are offered to accredited investors only.

Due to the passive nature DSTs are not meant for every investor and it is important to seek education to see if a DST is best suitable for you. Shoot me an email or DM and I can go into more details.

@Brandon Rizzo

I own in Leander, and have a fantastic Property Manager. If you end up renting and want a Property Manager rec shoot me a DM.  

Hello @Mike Savage, I would agree with Dave Foster. A portfolio of DSTs may be a good fit in your situation. One thing to keep in mind, DSTs are typically held for 7-10 years, after which you can 1031 exchange into a vacation rental, more DSTs, any like kind property or cash out. You have options. Here is a blog post that may speak to you. 

Shoot me an email if you want to talk more. I also lived in Asia for 5 years, managed my CA and TX properties from there (not easy). If you haven't been there yet you are in for a real treat!!! 
 

https://www.biggerpockets.com/member-blogs/7993/48729-are-your-rental-properties-weighing-you-down

I would agree with both Dave and Brandon on the long term outlook of the REIT. I work with clients that 1031 into DSTs, some of which are slated from the start to go into the Sponsor's REIT utilizing the 721 UpREIT. These clients have usually completed a few 1031s and are ready to move off that cycle. We say when you are in the REIT, "you are in it to win it" but their hold is much much shorter than yours would be at age 41.

@Joan Liu you have 45 days to identify your new properties. If you start approaching day 45 with no contracts. I would be happy to discuss possible backup strategies. Email below.