All Forum Posts by: Account Closed

Actually, this could be on the easier side of things. They obviously don't want the burden of having to buy "bricks and mortar" replacement property that they have to manage. They can sell to you and buy into a DST. The IRS has blessed DST structures (given some particulars) as "like kind property" for purposes of a 1031 exchange. i.e., they could sell and exchange into a fund that will pay them an annual coupon or return of 5.5 to 6.5% return, zero property maintenance obligations. Think of them buying into a fractional interest of a 300m Amazon industrial warehouse. Corporate guaranteed by Amazon. They can still pass on that investment to their heirs and keep the tax deferral and pick up cash payments to take care of their income needs. There are definitely options for them.

my question is why every broker has a different DST offering ? I thought every broker could have access to the same DST.

BP Braintrust,

I'm looking for some insights/perspectives on DST OR alternatives. My wife and want to move away from the traditional ownership of small residential properties. We've recently invested in syndications and are very happy with the hands-off nature of the investment along with returns. Moving forward, we'd like to unload our rentals and move the proceeds into syndications, however, we do not have the accumulated losses to offset capital gains/recaptured depreciation for our rental properties. We don't want to do a 1031 exchange into another property, but rather move the proceeds to a truly passive investment like a syndication or DST. We're just starting our education in the DST space. Each syndicator we've talked to cannot accept a 1031 into the syndication unless it's a TIC structure and the few that do it, only do it for existing clients/investors. DSTs, however, do accept and/or are designed for 1031s.

I see the most common DST returns to be in the 4-5% range. DST providers/literature often cite that though the return is low, when combined with the tax deferred benefit, it's better than selling an asset, paying the capital gains, and reinvesting in a normal syndication. Of course the proof is in the actual investments and numbers, but this assertion seems unlikely based on the value-add upside normal syndications can provide which DSTs can't. I would welcome any feedback on viable 1031 options as well as alternative options that will yield the same or higher long-term returns. Thanks.

Thanks all, I like the NNN suggestion and have been looking into those as well. A couple questions:

1. I have zero experience with commercial properties. Should I be concerned going into a relatively large value ($3-4M) commercial property with a big chain like Walgreens as my first deal? Or are these the "easiest" because big corporations take care of everything?

2. What type of management is involved in commercial properties? I can intuitively understand MF properties because I've been a renter before... leaky faucets, toilet needs fixing, etc. What would Walgreens call me about?

3. Is there much appreciation upside in a high quality NNN property? I've seen a couple shiny commercial buildings leased by the likes of Walgreens. Unsure if it's a better deal than a truly hands off DST... eg do the appreciation or tax benefits make an impact.

I'm not opposed to doing some rehab work, I actually enjoy that part (hence our vacant land projects), I'm more concerned with the day in/day out maintenance, even with a property manager.

Thanks again.

I'd have to go back a year to find the sponsor.  I just have the QI info.  This was completed in 12/2021 but I filed an extension on my taxes to make sure all is good.  So, still working on it.