Available Investment Options

Investors interested in real estate and 1031 exchange options have many different solutions for their investment dollars. In addition to 1031 Exchanges, investors can participate in other direct real estate investments. We can help you determine the appropriate investment strategy for your portfolio.

Our team helps real estate investors exchange management-intensive properties for management-free income properties. DIS’s comprehensive team of tax advisors, attorneys, Real Estate Brokers and FINRA registered representatives represent clients participating in 1031 exchange investments. Clients interested in this type of investment are typically seeking:

  • Income property ownership free of day-to-day landlord and management headaches.
  • Deferment of capital gains taxes via 1031 Exchanges
  • Conversion of active to passive property ownership
  • Diversification by multiple asset types and locations with upgrade to institutional grade properties with average 5-10 year holding period
  • Switch from non-cash flowing properties to cash-flowing properties 5-7% cash-on-cash return (average)
  • Liability restriction through non-recourse influence
  • Property depreciation and a stepped up basis.
  • NNN leverage
  • Cash Investments: Passive income property investments as alternatives to low-yielding CDs, bonds, money markets etc.

See below for the options we offer which may be a powerful investment tool that allows investors to acquire passive ownership in larger, professionally managed income properties that may benefit from the following advantages; Prior to purchase full disclosure of comprehensive due diligence reports, pre-arranged non-recourse financing, high-net worth tenants, competently negotiated lease terms, as well as low minimum investment requirements that allow for better diversification into multiple markets and asset classes.

To find out more about 1031 exchange options contact DIS’s inclusive advisory team.  Click here for a complimentary consultation or call 866-261-0104.

  • Delaware Statutory Trust

    A properly structured 1031 DST legal trust allows an investor to sell an investment real estate asset, defer the taxation on the sale through Internal Revenue Code Section 1031, and buy a DST replacement property on a tax-deferred basis.

    The DST investor will own a portion of the trust, called a Beneficial Ownership Interest, with the trust owning the underlying real estate. There will be multiple DST owners and each will own their own percentage of the trust. A DST investor is called a DST Beneficiary and will receive the potential economic benefits of the property held in the DST. For 1031 tax deferred exchange and income tax purposes, the investor is viewed by the IRS to own the real estate directly. For all other purposes the investor is seen as a passive participant.

    Examples of DST real estate include office buildings, shopping centers, apartment buildings, industrial properties, and warehouses. In many cases, DSTs can offer opportunities for enhanced cash flow from rental income and tax benefits from depreciation of assets.

    * The Many Advantages of a DST

    1. No property management

    • Ideal for owners tired of the day-to-day "headaches" of facility management:
    • dealing with tenants
    • maintaining facilities
    • paying property taxes
    • For those who want to eliminate/retire from landlord duties and still receive cash flow from property ownership – i.e. just send me the check!

    2. Higher monthly "tax sheltered" cash flow potential than from original property:

    • Cap rates between 5-7% cash-on-cash return on your equity investment.
    • Stable and secure income generated from credit worthy tenants.
    • Enjoy the income from the property while letting a professional team manage it (i.e. mailbox real estate).

    3. The potential for greater capital investment appreciation on your present equity:

    • Investors who want to trade up to higher equity returns of a professionally managed, institutional type commercial property with credit worthy tenants.
    • Provides individual investors the ability to compete with institutional investors on larger (i.e. more profitable) deals by pooling funds for larger properties than they normally wouldn't be able to afford – (i.e. "leverage off" of the Sponsor's acquisition departments).

    4. Tax Benefits

    • Continuation of tax deferral – till "step-up" in basis.
    • New depreciation allowance – 50% to 80% of cash flow sheltered from taxes.
    • Excellent estate planning vehicle – estate tax valuation discounts of up to 35% for a DST interest (i.e. further discounts available with proper planning).

    5. Short Holding period on property ownership

    • A majority of the sponsors only hold the properties for between 3- 6 years (some extend as much as 20 years).
    • Investors are then able to take their net proceeds to "exchange" into a property of their own choosing or another program, to further defer their taxes.

    6. Investors seeking real estate diversification by spreading their equity amongst:

    • Multiple sponsors (over a dozen to choose from).
    • Property types (office, apartments, industrial, duplexes, shopping centers, retail, warehouse, malls, etc.)

    7. It is a great "back-up" replacement vehicle to use:

    • If a primary replacement property does not close (i.e. may not have time to identify another property).
    • If the appraisal for the primary replacement property comes back for less than "gain" needed to be sheltered DST’s can accommodate "spillover/last piece fill" from a large transaction.
    • If you do not want to spend the time necessary to secure (as well as to do the due diligence) on good quality replacement property.
    • If you are having trouble finding good replacement property in a "tight" market.
    • Because it gives a 1031 buyer a lot more "leverage" with the seller than if they had no other backup property identified.
    • To find out more about Delaware Statutory Trust (DST’s) contact DIS’s inclusive advisory team.  Click here for a complimentary consultation or call 866-261-0104.

    Please note: Investments such as a DST involve certain risks and tax ramifications. Please click here for risk and additional disclosures.

  • UP-REIT (721 Exchange)

    REITs buy, sell and hold real estate portfolios consisting of a variety of different commercial properties ranging from shopping malls, apartments, office buildings, hotels, medical facilities and warehouses. Owning shares in a REIT is one way to own real estate. You cannot exchange directly into a REIT as that is not a like-kind exchange.  However, if structured properly as an exchange, it can be exchanged into a DST fractural ownership investment and then be UPREITED after 18-24 months in exchange for shares in the REIT. Note: Not every REIT is available for a 1031 Exchange. After the DST property is UPREIT’d into the REIT, the investor enjoys full diversification as the investor now owns shares of multiple properties (can be hundreds or thousands). However, once they are in the REIT they can no longer complete another 1031 exchange as the investor now owns shares vs. real property.  The advantage of this is that taxes can be paid a little at a time as the shares are sold (e.g. the investor sells as many shares as they want each year, and only pays taxes on the amount of shares sold). This is a popular tool for estate planners to use when dealing with tax consequences.  A 721 UPREIT can also be used in conjunction with a DST, NNN or when an investor is buying another piece of direct ownership real estate (eg. Condo, sfr, apt. etc.).

    UPREITs represent an exit strategy for property owners who rather than exchanging for another real property in a 1031 exchange, prefer the benefits of owning an interest in an UPREIT's operating partnership. These operating units benefit from the REITs capital appreciation and distributions of operating income. At a time determined by the taxpayer, the operating partnership units can be exchanged for shares in the associated REIT.

    To find out more about 721 UP-REIT exchanges contact DIS’s inclusive advisory team.  Click here for a complimentary consultation or call 866-261-0104.

  • Triple-Net (NNN)

    Investors wishing to own less labor intensive properties than apartments or store fronts, may look for replacement properties that provide consistent cash flow without the requirement to replace toilet seats, deal with trash and questionable tenants etc.

    The NNN lease asset provides cash flow potential, class "A" tenants and most importantly, little if any labor requirements. Triple net leases require the tenant to be financially responsible for insurance, utilities, taxes, maintenance in addition to rent.  The Landlord typically can enjoy high level of income while the building is maintained by the tenant.  This type of ‘passive’ ownership may require a greater financial investment as its best if the investor gets a strong tenant such as a CVS or Walgreens. This type of ‘hands-off’ investment typically involves one single tenant, and typically calls for long-term (15-20 year) leases. Diversification does not guarantee profits or guarantee protection against loss.

    Many well known retail companies such as drug stores, fast food restaurants and auto parts stores enter into NNN leases with options to renew up to 30 years providing consistent cash flow to the Landlord.

    This type of investment has bond like attributes and the investor typically owns the property (no co-ownership) on their own, however a DST, 721 UPREIT can be utilized and enjoy some of the same benefits as NNN and DST while receiving potentially greater diversification.

    To find out more about Triple Net (NNN) investments contact DIS’s inclusive advisory team.  Click here for a complimentary consultation or call 866-261-0104.

  • Oil & Gas

    Gas and Oil Royalties are attractive to investors looking to diversify out of real estate and invest in commodities we use every day. An investor doing a 1031 Exchange has many options including a royalty program for oil and gas.  Assets such as oil and gas minerals particularly attract those who are anxious about the devaluation of the dollar, hyper-inflation and who are looking to diversify their 1031 exchange and receive a monthly royalty income. Even if your 1030 Exchange fails, there are oil and gas programs that can be used to offset capital gains.

    To find out more about Oil & Gas investments contact DIS’s inclusive advisory team.  Click here for a complimentary consultation or call 866-261-0104.

  • Saltwater Disposal Wells

    These programs are also attractive to investors wishing to diversify their portfolios.

    To find out more about Oil & Gas investments contact DIS’s inclusive advisory team.  Click here for a complimentary consultation or call 866-261-0104.

  • Direct Purchase

    Investors who prefer to manage their own properties can simply purchase a replacement property directly.  Other options besides a DST or 1031 Exchange are available for fractional ownership. Diversified Real Estate Advisors can help find a replacement property such as condo, single family residence, multi-family units or Triple NNN properties. Depending on the situation, it may make sense to diversify amongst other investment vehicles.

    To find out more about Direct Purchase investments contact DIS’s inclusive advisory team.  Click here for a complimentary consultation or call 866-261-0104.

While it’s always good to have options, its best when options are fully understood and the best option can be selected with the current situation in mind.  If you have questions regarding a 1031 exchange options, contact DIS’s comprehensive team of tax advisors, attorneys, Real Estate Brokers and FINRA registered representatives. Click here for a complimentary consultation or call 866-261-0104.

JOIN OUR MAILING LIST

Securities products involving TIC’s and/or DST’s are for accredited investors only (a net worth of greater than 1 million dollars – exclusive of primary residence). Securities products are offered through Concorde Investment Services, LLC, member FINRA/SIPC. Office of supervisory jurisdiction: 19500 Victor Parkway, Suite 550 Livonia, MI 48152. Diversified Investment Strategies and Diversified Real Estate Advisors are independent of Concorde Investment Services, LLC, all of whom are unaffiliated with third-party sites, cannot verify the accuracy of, nor assume responsibility for any content of linked third-party sites. All information provided along with third party sites is for educational purposes only. The material contained herein does not constitute an offer to sell and is not an offer to buy real estate or securities. Such offers are made only by a sponsor’s memorandum, which is always controlling and available to accredited investors only. There are material risks associated with the ownership of real estate, including but not limited to, tenant vacancies, loss of entire principal amount invested, and that potential cash flows, returns, and appreciation are not guaranteed. Past pricing structures may not be indicative of future pricing and may not result in positive returns. Diversified Investment Strategies and Diversified Real Estate Advisors are unaffiliated entities with Concorde Investment Services, LLC. This material is not to be interpreted as tax or legal advice. Past performance and diversification do not guarantee future positive results.  |  Privacy Policy

CONTACT INFO

 

32565 B Golden Lantern, Suite# 245

Dana Point, CA 92629

COPYRIGHT © DIVERSIFIED INVESTMENT STRATEGIES, 2014-15. ALL RIGHTS RESERVED.

Submitting Form...

The server encountered an error.

Form received.