All Forum Posts by: Natalie Bender

@Jean Deeb If you are new to DSTs you may find this blog post relatable. The author of the blog also has a book you can find on Amazon or I can send you a copy. My contact information is down below. 

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

Kay Properties has been an advisory firm in the DST space for some time. It strongly touts no debt DSTs. Arguably, Kay overemphasizes the risk of taking on debt. Kay Properties has a DST Sponsor arm, Cove Capital that offers no debt DSTs. Kay has a strong inclination to be your Rep and your Sponsor (Cove). You may be shown fewer offerings from other DST sponsors -- particularly offerings with debt.

@Robert L. I am a Registered Rep and have worked with many clients that have used, Dave Foster and IPX1031. Both of which have been great and no complaints from clients or Sponsors. I would also like to recommend my go to QI; Weiming Peng with Excel1031. He goes above and beyond in terms of communication and education for his clients. He is in the Bay Area, but can process exchanges nationwide. 510-316-8078 ; [email protected]

I am sure there are some DST Sponsors charging 15-20%, in my experience the fees are closer to an average of 7.5%-10% in total; not a single Broker Dealer fee. This 7.5% - 10% is not taken from the investment a client makes, if you investment $100K your ownership in the DST is $100K, unless the DST has debt. DST's with debt will give an investor additional ownership.

In most spaces there are bad actors and or inexperienced sponsors. It is very important, no matter the investment vehicle, to do thorough due diligence, ask for track records, know the risks, make sure there is a great deal of transparency and excellent communication with any Sponsor. 

Hello Frank,

In the DST space our typical client is an investor that has been a landlord for decades and they are tired of the tenants, trash and toilets. Passive investing is their next step, however recently I am seeing more and more investors looking for an opportunity to stay in real estate, but this period in their lives active real estate just doesn't fit. The life of a DST is 7-10 years, some go full cycle sooner. You could always 1031 exchange into a DST now, enjoy your kids and family. Then in 7-10 years reevaluate where you are in your life, your real estate goals, investment goals then 1031 into the best fit at that time whether than be active management of a property or a different passive investment. Happy to talk more anytime.

@John Haelig I think you are on the right track exploring your options. My company has worked with many investors in your shoes ready to get out of active management and unlock their trapped equity. 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

Hello Lucas,

Another strategy you could consider would be passive investing in real estate till you are ready to actively own and manage. Take a look at a DST, Delaware Statuary Trust.

A DST is a hands-off, institutional grade real estate investment (apartments, self storage, commercial, medical office, etc), that allows the investor the option to diversify into multiple markets around the country. They can 1031 into $50-125M projects with as little as $100,000. Professionals with decades of experience and proven track records do all the heavy lifting. Investors have to be accredited.

Typically Investors complete a 1031 exchange out of active ownership/management into a DST because they are looking to defer capital gains and stay in real estate to build their wealth but are tired dealing with tenants, trash and toilets.

In your situation, if you are an accredited investor, you could invest while living overseas easily. While you are invested in the DST you could potentially earn monthly cash distributions, gain potential appreciation on the property and takie advantage of tax benefits (depreciation). A DST is typically a 5 to 7 year hold, at which point you could 1031 exchange into your own investment property. There are some drawback to DSTs as well. If you would like further information send an email anytime.

As mentioned prior, a DST may be a good fit for your seller and may help close your deal if they have an exit strategy they are excited about. Take a look at this blog post, you may be able to better understand your seller, anticipate their pain point and provide a solution they haven't considered. Shoot me an email if you would like to talk more.

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

@Eric Andrekopoulos

Instead of seller financing have you or or client considered becoming a passive real estate investor, by means of a DST (Delaware Statuary Trust)?

A DST is 1031 eligible hands-off, institutional grade real estate investment (apartments, self storage, commercial, medical office, etc), that allows the investor the option to diversify into multiple markets around the country. They are completely passive and can offer monthly distributions as well as potential appreciation. A DST allows a tired landlord out of active management while still owning real estate they can one day leave to their heirs. Here is a great blog post that will really speak to your client. Shoot me an email if you would like to talk more.

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

@Ellie Narie your best bet is to talk to a Qualified Intermediary, they act as escrow for a 1031 exchange. You absolutely need one in place in order to complete a 1031. I work with investors completing 1031s into passive real estate, my go to QI is Weiming Peng with Excel 1031. I will DM his details.