The DST 1031 Exchange is an increasingly popular option for real estate investors. This approach lets you reinvest earnings from an investment property sale via a tax-deferred 1031 exchange into like-kind real estate investments, deferring taxes and possibly expanding the scope of your real estate portfolio.
It’s important to remember that this article should not be considered tax or legal advice. Please speak with your own CPA and attorney for all tax and legal advice prior to considering an investment. All real estate and DST properties contain risk.
The Kay Properties online marketplace makes it easier for investors to access DST offerings for their 1031 exchanges by providing quality DST properties from more than 25 different DST sponsor companies.
Let’s take a closer look at how the Kay Properties www.kpi1031com 1031 exchange marketplace works and how it can benefit 1031 exchange investors.
One challenge 1031 exchange investors face is finding quality 1031 exchange-eligible Delaware Statutory Trust properties for their exchange. That’s why Kay Properties and Investments created its exclusive online 1031 exchange and real estate investment marketplace at www.kpi1031.com.
“We’ve helped thousands of DST investors from all over the United States find viable DST investment opportunities by utilizing our very robust online marketplace platform. The platform was created for accredited 1031 exchange and direct cash investors looking for DST investment opportunities,” explained Dwight Kay, founder and CEO of Kay Properties and architect of the online DST marketplace.
Kay explained that investors can simply log in and view current DST investment opportunities. Typically, investors can find 20-40 different DST investment opportunities available at any given time from more than 25 different DST sponsor companies.
Created for investor ease of use, the www.kpi1031.com online marketplace is considered by thousands of 1031 exchange investors an ideal-in-class robust platform that connects high-net-worth investors with DST real estate offerings. The platform is also a place for Delaware Statutory Trust sponsor firms to connect with tens of thousands of high-net-worth investors seeking to deploy capital into real estate offerings.
For investors seeking DST investment opportunities, this online marketplace has created a perfect match for all sides of the 1031 exchange and real estate investment equation.
Kay explained that in addition to reviewing DST opportunities online, investors can also receive a free physical listing menu, the “1031 Exchange DST Property Menu,” where they can view the current DST investment opportunities.
Now that you know where you can find quality Delaware Statutory Trust offerings for your 1031 exchange, it might be a good time to look at some hypothetical examples of DST 1031 properties available on the www.kpi1031.com marketplace.
It’s important to note that the following properties are fully subscribed to Regulation D, Rule 506c DST examples, are not available for investment, and that future offerings will vary. However, to see a list of currently available DST 1031 properties from typically over 25 different DST sponsor companies with anywhere from 20 to 40 different DST offerings, please visit and register at www.kpi1031.com for the current inventory.
This is an interesting offering because this was what’s believed to be the first all-cash debt-free multifamily in the history of Delaware Statutory Trusts. Many Delaware Statutory Trust properties in the market today have some type of leverage associated with them (leverage always increases risk). This debt-free multifamily offering was called The Thistlewood Townhomes, DST.
It was located in the Nashville metro area near Google’s new data center, which was being developed. The property was a townhome-style community and was built in 2015.
The next example DST offering that was found on the www.kpi1031.com marketplace was a Frito-Lay Distribution Center DST located in Northern Virginia, directly adjacent to Dulles International Airport.
This offering was also a debt-free offering with no risk of lender foreclosure. It was a brand new, Frito-Lay distribution facility with a long-term net lease specifically built for the tenant and its specific needs.
The industrial distribution sector is an asset class that many investors are interested in because of the various demand drivers and economic factors, including online shopping.
A Delaware Statutory Trust (DST) is a popular structure used in 1031 Exchanges that has attracted tens of thousands of investors nationwide. DSTs allow multiple investors to pool resources to acquire properties. Each investor holds a beneficial interest in the trust, similar to owning shares in a company. Each DST allows investors to own a fractional interest in various types of commercial real estate or multifamily apartment communities.
DSTs provide investors with a variety of potential benefits. Some of these include:
Many of our clients are at or near retirement and are tired of the hassles that real estate ownership and management often bring. They are tired of the tenants, toilets, and trash and want to move away from actively managing properties. The DST 1031 property provides a passive ownership structure, allowing them to enjoy retirement, grandkids, travel, and leisure and to focus on other things that they are more passionate about instead of property management headaches.
Many clients have wanted to sell their apartments, rentals, and commercial properties for years but haven’t been able to find a property to exchange into and just can’t stomach the tax bill after adding up federal capital gains tax, state capital gains tax, depreciation recapture tax, and the Medicare surtax. The DST 1031 property solution allows investors to move from an active to a passive role of real estate ownership on a tax-deferred basis.
Many investors are receiving a lower amount of cash flow on their current properties than they could be due to their properties having under-market rents, multiple vacancies, and/or vacant and sitting idle. DST 1031 exchange properties provide an opportunity for investors to increase their cash flow on their real estate holdings via a tax-deferred 1031 exchange.
Oftentimes, 1031 investors are selling a property that comprises a substantial amount of their net worth. They want to reduce their potential risk, and instead of buying one property (such as another apartment building) or one NNN building (such as a Walgreens pharmacy or Starbucks), they decided to invest in a diversified portfolio of DST 1031 properties with multiple locations, asset classes, and tenant mix is a better fit for their goals and objectives.
This is similar to how investors tend to invest retirement funds in mutual funds and Exchange-Traded Funds (ETFs) rather than placing their entire retirement savings into the stock of one particular company.
However, it is important to note that there are no assurances that diversification will produce profits or guarantee against loss.
One of the requirements for a 1031 exchange is to take on “equal or greater debt” in the replacement property to what you had in the relinquished property (the property you are selling). In today’s lending environment, it is often hard for investors to obtain non-recourse financing at an acceptable interest rate and terms. Due to the DST 1031 properties’ sponsors typically having strong lending relationships, they can secure non-recourse financing at reasonable terms available in the marketplace. The DST 1031 investors are the direct recipients of these financing terms that they would otherwise often not be able to obtain on their own.
DST 1031 properties provide access to large, institutional-grade real estate that is often outside an individual investor’s price point. With the typical minimum investment, investors can still purchase an ownership interest in large apartment communities, industrial distribution facilities, and build-for-rent housing communities, for example. This allows investors access to a level of real estate that they just would not have been able to exchange before.
When making wise real estate investment choices, a strategic plan is essential. Just like a roadmap guides you to your destination, a thoughtful strategy is crucial for your 1031 Exchange. Whether you’re investing in a multifamily DST, a multi-tenant small bay industrial DST, or a Distribution Center DST, careful planning can make all the difference for your 1031 exchange. 1031 exchange investors are encouraged to register for free at www.kpi1031.com to access the DST 1031 exchange marketplace and DST offerings currently available from over 25 different DST sponsor companies.
Diving into a 1031 Exchange without expert guidance can be overwhelming. Consulting with CPAs and attorneys is critical. These experts help navigate the complexities of tax codes and property regulations. A CPA can provide invaluable insights into tax deferral strategies, helping you understand how a DST 1031 Exchange can save money on capital gains taxes.
A DST 1031 Exchange may be worth exploring for those seeking tax deferral exit strategies for highly appreciated real estate holdings.
Source: https://ceoweekly.com/expanding-your-investment-options-with-a-dst-1031-exchange/
Disclosure: About Kay Properties and https://www.kpi1031.com: Kay Properties helps investors choose 1031 exchange investments thathelp them focus on what they truly love in life, whether that be their children, grandkids, other businesses, travel and hobbies (NO MORE 3 T’s! Tenants, Toilets and Trash). We have helped 1031 exchange investors for nearly two decades exchange into over 9,100 - 1031 exchange investments. Please visit (https://www.kpi1031.com) for access to our team’s experience, educational library and our full 1031 exchange investment menu. Annualized distributions, cash flow, potential returns, and potential appreciation are not guaranteed. Past performance does not guarantee returns and does not protect against loss. All offerings shown and/or discussed, if any, are regulation D Rule 506(c) offerings, are subject to availability and are only available to accredited investors (generally defined as having a net worth of greater than $1 million dollars excluding their primary residence). There is no guarantee the offerings shown will be available for purchase. Do not consider this material to be tax or legal advice. Please consult your CPA or attorney prior to investing. All real estate investments and DST properties contain risk. Past performance does not guarantee or indicate the likelihood of future results. Diversification does not guarantee returns and does not protect against loss. Please read the Private Placement Memorandum (PPM) for a full discussion of the offerings business plan and risk factors prior to investing. Securities offered through FNEX Capital LLC member FINRA, SIPC.