All Forum Posts by: Account Closed

You don't have to 1031 into a DST once the DST sells. You can 1031 exchange from the DST back into real property once the DST sells.

 Yes. They are known for their marketing...

 Hi Jim,

The CPA I mentioned in our messaging conversation can help out!

Hi Mike,

Depending on how much time you have left. I'd recommend starting to research other markets. I would do a deep dive to see which cities are growing yet have not blown up. Which cities have had a steady growth of rent and population. 

Aside from that, you can invest in a DST. DSTs are passive investments that qualify for the 1031 exchange. The DST will allow you to invest in a different market, but a sponsor will manage the asset and pay income out. I sent you a DM with a bit more info.

Hi Jack. Here are some answers to your questions that I hope can help.

1) Typical returns are 5-6%. If you see advertised returns of 7-11%, RUN!

2) 5-7 years is the normal hold time. There are other DSTs that have 2-3 year hold times however after the 2 or 3 year year mark, a REIT buys the property, and the investors get shares of the REIT. You can sell those shares at any time but you can't exchange out of them like a typical DST.

3) Sponsor risk and Real Estate Risk are the big ones. Many sponsors may not have the track record to buy an institutional piece of property and place it in a DST. Real estate risk can be potentially mitigated through reputable sponsors who have strong track records as well as going into a diversified portfolio of DSTs.

3) You want to work with a DST broker who has a background in real estate. Many financial advisors, especially as of late, have started going into the DST space and selling DSTs to their client. The issue with that is the advisor doesn't understand the real estate aspect. They don't know much about the asset class, the market, or how the DST world functions! Funny enough, I've heard a story from my colleague about how he had a colleague at his previous firm who wanted to present a DST to their wealth management client. The previous firm was a big wire house that didn't specialize in DSTs or even alternative investments. His colleague goes into the meeting to present and comes out asking what a cap rate is.

I sent you a DM with some more info. I'd be happy to discuss front-end load cost reductions and some of our options.

 Keep in mind that more than likely the sponsor is a professional real estate company. Meaning they have ivy league analysts, economists, and researchers who study the economy and real estate on a daily basis for the benefit of their investors. Just because you don't have a management authority doesn't mean that the sponsor isn't managing the asset as best as possible... Especially if you go with a sponsor who has a proven track record.

Hi Kevin. 

Are you referring to a Delaware Statutory Trust, or a deferred sales trust? They both use DST as an acronym and can get confusing.

@Dave Foster can and will give you better advice than me. However, there isn't really a set hold time. Most CPAs will say 2 years, others will say a case like yours is special and 1 year is sufficient. As long as you can prove that you listed it for rent and it was rented, you should be fine for a 1031 exchange.

You should buy a property based on your goals, what you know, the market you're buying in etc... There isn't a magic formula as to buying a property and most people here know their market, their goals, and the asset class they're familiar with.

First ask yourself, what are you familiar with?