All Forum Posts by: Natalie Bender

@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. 

I highly recommend Weiming Peng with Excel1031. I work in the DST space, and help investors 1031 exchange from active ownership to passive ownership. Weiming is by far the most responsive QI I work with. I think he as been a QI for 10+ years.

Give him a call he will be able to answer all of your questions. I'll DM you his contact info. 

If you want to stay in the active real estate game but not wanting to buy right away you could 1031 into specific DSTs that have a 721UpReit OPTIONAL component. A DST with a 721UpReit option is typically held for 2 years after the last investor has entered the deal and the offering is closed. This would allow you to defer capital gains and buy you some time to see what the market is doing 2-3 years from now. At the time when the sponsor elects to initiate the 721 option you could 1031 into another Commercial Property. DSTs are very simple to 1031 exchange into.

*Note DSTs are real estate securities and only available to accredited investors. 

Just another strategy to consider. 

@Amirra Besh

I have a rental right outside of Austin proper, I bought it while living out of the country in 2019. I have used the same property manager the entire hold and have had zero issues and extremely happy with management, tenant placement and help on property tax reduction. Highly recommend....360 Properties LLC

I will DM you. 

DSTs (Delaware Statutory Trusts) are as close to passive real estate investing as you can get while still holding real estate and claiming 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, receive quarterly reports on investment, file taxes annually and exchange DST year 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.

Another strategy would be to 1031 exchange into a passive portfolio of DSTs (Delaware Statutory Trusts). Check out this blog written by Leslie Pappas, you may relate to it. 

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

@Becca F. I have a property outside of Austin, TX that is slightly in the red each month and looked into 1031 exchanging into a DST as well but ran into some debt replacement issues. Shoot me an email if you want to discuss!

Hey Dan, It could be a huge red flag if the DST Sponsor is not providing their track record. It could mean they don't have any deals that have gone full cycle, so they don't have any official returns to boast or it could be more nefarious reasons.

I work in the DST space and have roughly 12 preferred Sponsors all of them have some form of track record. Hope that helps.

@Jyothi Jagannathan I am in the DST space and work very closely with Qualified Intermediaries. My go to is Weiming Peng with Excel1031. He is extremely knowledgeable and has been in the 1031 business for 10+ years. I haven't ran into a scenario he hasn't see yet. Definitely worth a call.

www.Excel1031.com

Hello Dan, I agree you should consult with your CPA for the specific figures regarding your taxable boot. I am curious about your "approx 50% depreciation on income". If the DSTs you are investing have additional leverage then you will receive a new depreciation schedule based on that leverage.