There is a distinction between syndications and DSTs. I don’t disagree with @Scott Trench and others that there have been a lot of bad operators - especially recently.
I see both bad and good syndications - there is a lot of variation. Albeit good deals are harder to find these days given the interest rates. Good ones are still out there (I published an ebook on how to evaluate them if anyone is interested).
As far as DSTs, I have yet to talk to a single investor who found a DST that was attractive. (If you found one, please DM me!)
DSTs suffer from 3 main problems:
1) Low returns (aka 4-6% ish)
2) High fees
3) Poor / no liquidity
The combination of these factors makes DSTs pretty terrible investments right now. The only benefits I see are the tax deferral and diversification. Those are valuable. But not enough to overcome the 3 factors above (in my opinion).
Because a lot of investors in my investor group are looking for better options, I’ve been hunting for better passive 1031 options that involve TICs - typically with syndicators.
TICs have fallen out of favor but as long as they are structured property and are run by a good operator (see point earlier) they can be a good alternative. I’m compiling a list of the better ones.
Two weaknesses of this approach are 1) lack of diversification and 2) high minimums that typically require $1M in equity.
But I have had some success finding a few that have lower minimums and provide healthy returns with a much shorter commitment timeline vs DSTs.
So you could 1031 into the syndication, and then 1-2 years later, 1031 out if you found a better long term deal.
