Make time for fun in your life with a Delaware Statutory Trust
If you are a real estate investor, ready to retire from the Terrible T’s (toilets, trash and tenants), our team at Diversified Investment Strategies has good news! You may qualify for a 1031 exchange, which allows you to preserve the value of your property investment without having to pay federal taxes. This is done by selling your current investment property and acquiring another ‘like-kind’ property.
There are numerous 1031 exchange options, which we’ve been discussing with you in our last few blog posts. Today, we’d like to discuss the perks of a Delaware Statutory Trust, or DST.
A Delaware Statutory Trust is ideal for an investor who is ready for passive income. If you’re ready to give up the Terrible T’s and move on to time, travel and teeing off, along with any other joys you’ve been putting off, a DST may be the option for you!
A real estate sponsor firm acquires a property under the DST umbrella and serves as master tenant. This trust is then open to investors to purchase a beneficial interest. As an investor, you can deposit your 1031 exchange proceeds into the DST, or you may purchase an interest in the DST directly.
If you are familiar with tenants in common, or TIC investment strategies, here are some perks of a DST over a TIC:
1. Unlike a TIC, a DST is not limited to 35 investors. It can have 100 or more, so the minimum investment may be lower. Also, you’ll make only one loan to one borrower, and that is the DST sponsor.
2. A DST can give you greater security, because the lender has fully qualified the sponsor, who is the underlying responsible party.
3. Banks are not involved directly with the investors, so exit strategies may be enhanced.
More perks to a DST include:
4. Absolutely no property management, so your day-to-day headaches are over! This means no more dealing with tenants, maintaining facilities or paying property taxes.
5. Higher monthly “tax sheltered” cash flow potential may be available than from your original property.
6. You have the potential for greater capital investment appreciation on your present equity.
7. There are many tax benefits, including tax deferral continuation, new depreciation allowance and more.
8. There is a short holding period on property ownership.
9. You’ve got diversification opportunities if you’d like to spread your equity.
10. A DST can be a great “back-up” replacement vehicle.
The only way to truly understand a Delaware Statutory Trust, and to find out if it is the right 1031 exchange option for you, is to contact our team of professionals at Diversified Investment Strategies!
Complete with tax advisors, attorneys, real estate Brokers, FINRA registered financial consultants and more, you can ensure your confidence in our knowledge and expertise when it comes to 1031 exchanges for real estate investors. We can help you determine what the best option is for your future! Contact us today.
Bryan Hakola
Diversified Investment Strategies
Visit Our Website
Learn About Your Investment Options
Become Our Facebook Fan
Follow Us on Twitter
Connect on LinkedIn