Many real estate investors use 1031 exchanges to defer their capital gains taxes and depreciation recapture by replacing a relinquished property with a qualified like-kind replacement property. However, there are a number of very specific rules and timelines that must be followed before you can receive favorable tax treatment through a 1031 exchange.
1031 Exchange By Jeffrey Bangerter on Mar 02, 2023Accredited investors who own a Delaware Statutory Trust (DST) are generally familiar with the rules governing a DST investment. But one area of confusion we often hear about relates to the ability for an investor to sell their fractional interest, and what that process entails.
DST By Jeffrey Bangerter on Feb 16, 2023A Real Estate Investment Trust (REIT) is a company that owns and operates income-producing real estate, such as apartments, shopping centers, office buildings, and hotel properties. REITs are typically publicly traded on a stock exchange, giving investors access to professionally managed, diversified commercial real estate portfolios. Investing in a REIT provides the investor with the potential to receive regular cash flow and capital appreciation.
Diversification Stock Market By Jeffrey Bangerter on Feb 01, 2023A DST’s sponsor is responsible for finding and acquiring properties, then packaging them for investment. While the trust itself retains ownership of the underlying property, investors participate by purchasing fractional ownership interests in the trust.
DST By Jeffrey Bangerter on Jan 19, 2023A Delaware Statutory Trust (DST) has the potential to offer benefits to accredited investors. Purchasing a DST gives an investor the opportunity to add commercial real estate exposure to their portfolio without the hassles that come with direct property management. DSTs have the potential to generate monthly income, plus a capital gain when the underlying property(ies) are sold at the end of the holding period.
DST Tax Planning Tax Tips Tax Management By Jeffrey Bangerter on Jan 12, 2023In this last part of our series on evaluating a DST sponsor, we focus on the sponsor's management team and several attributes you should look for when conducting your due diligence. Here are five characteristics you will want to explore.
DST By Jeffrey Bangerter on Dec 14, 2022Many 1031 exchangers evaluating Delaware Statutory Trusts for their replacement property are often surprised to discover that offerings frequently have different fee structures. And while you may want to stay away from a sponsor who consistently promotes its offering as having the lowest fees, you do want to determine that the fees associated with the DST you ultimately select are fair and competitive.
DST By Jeffrey Bangerter on Nov 16, 2022Experienced and vertically integrated DST sponsors are generally as skilled at managing investment properties as they are at identifying, underwriting, and acquiring real estate. And a priority of property managers responsible for operating multi-tenant assets is to secure favorable leases with a diversified group of quality tenants. In doing so, the sponsor can help manage the risk of losing tenants and incurring the expense of re-leasing a property.
DST By Jeffrey Bangerter on Nov 02, 2022As you evaluate DST offerings for your 1031 exchange replacement property and assess the sponsors of the DSTs you are interested in, you will want to explore each sponsor's perspective on the types of property it acquires. As important as a sponsor's track record and financial strength discussed in our earlier posts, the asset classes a sponsor chooses to own are critical in determining how a DST may perform.
DST By Jeffrey Bangerter on Oct 19, 2022In this second part of our series on evaluating a DST sponsor, we look at two financial aspects: the sponsor’s financial strength and the type of financing the sponsor uses when acquiring properties.
DST By Jeffrey Bangerter on Oct 05, 2022
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There are material risks associated with investing in DST properties and real estate securities including liquidity, tenant vacancies, general market conditions and competition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial and multifamily properties, short term leases associated with multi-family properties, financing risks, potential adverse tax consequences, general economic risks, development risks, long hold periods, and potential loss of the entire investment principal. Past performance is not a guarantee of future results. Potential cash flow, returns and appreciation are not guaranteed. IRC Section 1031 is a complex tax concept; consult your legal or tax professional regarding the specifics of your particular situation. This is not a solicitation or an offer to sell any securities. DST 1031 properties are only available to accredited investors (typically have a $1 million net worth excluding primary residence or $200,000 income individually/$300,000 jointly of the last three years) and accredited entities only. If you are unsure if you are an accredited investor and/or an accredited entity please verify with your CPA and Attorney.
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