All Forum Posts by: Rob Pecha

@Cameron Snyder pleased to meet you! So basically the rules with regard to your 1031 exchange are that you want to "exchange up" as they say — matching your equity and debt components, equal or greater. So, in your example whatever is sitting in escrow with the QI after closing costs would need to be fully deployed to gain the maximum tax benefit on your 1031. Similarly, the LTV would need to be retired as well, in equal or greater amount. DSTs are great because they can match debt and equity to the penny and are highly modular in nature. Hope this helps, will be happy to expand upon this at any time. Best of luck!

@Jarrod Kohl did you engage a QI prior to closing or did you take constructive receipt of the proceeds? If it’s the latter I’m afraid it’s not good news.

@Mike Chern, Dave is correct, you could take something like a zero coupon offering DST with as high as 83% leverage to satisfy the debt component. Great tactic 👍

@Tom Camarda in the case of the DST, the sponsor was Inland. Haven't seen one of those since. Fairly new type of DST I understand.

@Hen Ley not sure but wouldn’t the arm’s length rule apply here?

@Tom Camarda I have seen these done within the context of the cash-out refi DST. However the biggest thing to note there is that the sponsor controls when that refi happens, not the investor.