If you’re interested in real estate investments that work in conjunction with a 1031 tax-deferred exchange, you have many options for your investible dollars. We can help you determine the appropriate investment strategy for your portfolio. Potential benefits of these additional investment strategies may include:
- Tax efficient monthly distributions of 3 to 6%*
- Income property ownership free of day-to-day landlord and management issues
- Diversification by multiple asset types and locations with upgrade to institutional grade properties with average five- to 10-year holding periods
* Rates are not guaranteed and subject to change
- Deferment of capital gains taxes via 1031 exchanges
- Conversion of active to passive property ownership
- Switching from non-cash flowing properties to properties that offer the potential for cash flow
- Liability restriction through non-recourse influence
- Property depreciation and a step-up in basis
- NNN leverage
Delaware Statutory Trust (DST)
A properly structured 1031 Delaware Statutory Trust allows an investor to sell an investment real estate asset, defer the taxation on the sale through Internal Revenue Code Section 1031 and invest as a fractional owner which allows investors to invest in institutional grade real estate, while receiving the potential benefits of real estate ownership without the landlord responsibilities
UPREIT (721 Exchange)
Another type of investment option that allows investors to invest on a tax deferred basis with many attributes similar to a DST. The UPREIT allows investors potentially greater liquidity and/or exit options of their real estate holdings. This structure offers investors the ability to own interest in a diversified real estate portfolio of institutional quality properties that are professionally managed and offer diversification, income, tax benefits, liquidity.
Tenants in Common (TIC)
Oil and Gas Royalties (1031 Exchange)
Mineral owners own interest in sub-surface real estate – from the crust to the core – and are entitled to compensation potential for everything produced from their land. As the energy company produces oil or gas, a royalty is paid to the mineral owner from the production of oil and gas on his or her property.
Triple Net (NNN)
A Single-Tenant Triple Net (NNN) property is an attractive investment option for a variety of investors. The NNN structure seeks to provide consistent income with minimal management obligations. The NNN lease asset provides cash flow potential, class “A” tenants and most importantly, little if any labor requirements.
Opportunity Zones are a community development program established by congress in the Tax Cuts and Jobs Act of 2017 to encourage long-term investments in low-income urban and rural communities nationwide. The program essentially seeks to reward reinvestment of profit into Opportunity Zones.
RISKS OF A DST COULD INCLUDE
- Market and property risks: The value of the property held by the DST can fluctuate based on changes in interest rates, supply and demand, economic conditions, environmental conditions, zoning, etc. which means the appreciation generated could vary.
- Lack of liquidity: DSTs are generally illiquid so they may not be easily sold or exchanged.
- Fees and expenses: Investing in a DST can involve high fees and expenses
- Limited control: As an investor in a DST, you have limited control over the property held by the trust, and you may not be able to make decisions regarding the management or operation of the property.
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