Real Estate Broker · Alexandria, VA · Member since 2018 · 89 posts · 30 votes
I don't know how many of you are having an issue finding like-kind properties for a 1031, but if you're interested in trying out a DST (Delaware Statutory Trust), I'd be happy to connect you with an SEC-licensed broker to find a good DST.
Clearly, there are guidelines and min. investment amounts, but it is a great way to shed that 1031 boot or to avoid Tenants, Toilets, and Taxes.
Just yell.
More options are better than fewer & if a bunch of people are interested, maybe a zoom would be fun.
@Loretta Gray, you can also avoid the 3Ts by buying a double or triple net leased property and you get all the benefits from purchasing the property with little or no risk.
@Loretta Gray, you can also avoid the 3Ts by buying a double or triple net leased property and you get all the benefits from purchasing the property with little or no risk.
Ehhh not quite. When lease renewal comes, typically the tenant is in favor and the landlord will get screwed over unless the landlord is a multimillion-dollar real estate company. Tenants know if they leave, the landlord is screwed, so they can play with the numbers and make the landlord not have much cash flow. Plus, every year that the lease gets closer to expiration, you lose value in your property.
@Loretta Gray, you can also avoid the 3Ts by buying a double or triple net leased property and you get all the benefits from purchasing the property with little or no risk.
100% but rarely are ones that fit in the DC area if all you have left is the 1031 boot and there aren't any properties that fit your strategy. I think a DST is a great holding location until a more active one pops on the market.
@Loretta Gray, you can also avoid the 3Ts by buying a double or triple net leased property and you get all the benefits from purchasing the property with little or no risk.
Ehhh not quite. When lease renewal comes, typically the tenant is in favor and the landlord will get screwed over unless the landlord is a multimillion-dollar real estate company. Tenants know if they leave, the landlord is screwed, so they can play with the numbers and make the landlord not have much cash flow. Plus, every year that the lease gets closer to expiration, you lose value in your property.
I agree, that's why you really need to make your homework on what you are buying, how many years left and know how long you'll hold! I advise my clients to not hold longer than 5 years and keep moving up!
@Loretta Gray, you can also avoid the 3Ts by buying a double or triple net leased property and you get all the benefits from purchasing the property with little or no risk.
Ehhh not quite. When lease renewal comes, typically the tenant is in favor and the landlord will get screwed over unless the landlord is a multimillion-dollar real estate company. Tenants know if they leave, the landlord is screwed, so they can play with the numbers and make the landlord not have much cash flow. Plus, every year that the lease gets closer to expiration, you lose value in your property.
I agree, that's why you really need to make your homework on what you are buying, how many years left and know how long you'll hold! I advise my clients to not hold longer than 5 years and keep moving up!
This is the best strategy for NNN that I know of unless you have a real unicorn of a property, location and tenant. They are not always the best choice unless you will move them way before the lease expires.
The problem with a DST is that you are burying your cash and cannot build additional equity, borrow, has limited tax advantages, and the biggest is you can't use leverage to grow your wealth. I.E. your money is stuck, so I guess it depends where you are in your investing career. Great point @Loretta Gray about using the DST for that left over boot money.
The problem with a DST is that you are burying your cash and cannot build additional equity, borrow, has limited tax advantages, and the biggest is you can't use leverage to grow your wealth. I.E. your money is stuck, so I guess it depends where you are in your investing career. Great point @Loretta Gray about using the DST for that left over boot money.
Not sure where you're getting this info from but
#1 you can build additional equity through the appreciation on the property
#2 You can use non-recourse debt with a DST, therefore leveraging your equity
#3 There are a lot of tax benefits with DSTs, including depreciation.
The problem with a DST is that you are burying your cash and cannot build additional equity, borrow, has limited tax advantages, and the biggest is you can't use leverage to grow your wealth. I.E. your money is stuck, so I guess it depends where you are in your investing career. Great point @Loretta Gray about using the DST for that left over boot money.
Not sure where you're getting this info from but
#1 you can build additional equity through the appreciation on the property
#2 You can use non-recourse debt with a DST, therefore leveraging your equity
#3 There are a lot of tax benefits with DSTs, including depreciation.
I'd recommend looking more into DSTs...
What John meant is the investor is basically LP while in direct investmnt investor is GP where financing part if controlled by us the investor.
But regardless, it is good to have DST rather than not to have DST.
The problem with a DST is that you are burying your cash and cannot build additional equity, borrow, has limited tax advantages, and the biggest is you can't use leverage to grow your wealth. I.E. your money is stuck, so I guess it depends where you are in your investing career. Great point @Loretta Gray about using the DST for that left over boot money.
John,
The biggest and most important factor of a DST is the tax advantage of the tax deferral benefit. You also get to take accelerated depreciation from the dst property. The DST is not for everyone. It comes in handy as a backup plan, for those looking to exit real estate with large cap gains, or those who are just tired of being landlords and looking for passive monthly income.
The problem with a DST is that you are burying your cash and cannot build additional equity, borrow, has limited tax advantages, and the biggest is you can't use leverage to grow your wealth. I.E. your money is stuck, so I guess it depends where you are in your investing career. Great point @Loretta Gray about using the DST for that left over boot money.
Not sure where you're getting this info from but
#1 you can build additional equity through the appreciation on the property
#2 You can use non-recourse debt with a DST, therefore leveraging your equity
#3 There are a lot of tax benefits with DSTs, including depreciation.
The problem with a DST is that you are burying your cash and cannot build additional equity, borrow, has limited tax advantages, and the biggest is you can't use leverage to grow your wealth. I.E. your money is stuck, so I guess it depends where you are in your investing career. Great point @Loretta Gray about using the DST for that left over boot money.
Not sure where you're getting this info from but
#1 you can build additional equity through the appreciation on the property
#2 You can use non-recourse debt with a DST, therefore leveraging your equity
#3 There are a lot of tax benefits with DSTs, including depreciation.
I'd recommend looking more into DSTs...
I will give you #4. I will help you sell DST :)
The projection of return of CRE during high interest rate like today, could be more interesting rather than investing at DSCR SFR with 9% interest rate rate. Rather than having SFR with 9% interest rate , 1% appreciation and 1% CoC, I'd rather invest in industrial space DST down south. with 6% cap rate.
In one of area where house is sitting at 3 mils near here, there's always a meeting the DST broker selling the idea, that's the right target audience I guess.
The problem with a DST is that you are burying your cash and cannot build additional equity, borrow, has limited tax advantages, and the biggest is you can't use leverage to grow your wealth. I.E. your money is stuck, so I guess it depends where you are in your investing career. Great point @Loretta Gray about using the DST for that left over boot money.
Not sure where you're getting this info from but
#1 you can build additional equity through the appreciation on the property
#2 You can use non-recourse debt with a DST, therefore leveraging your equity
#3 There are a lot of tax benefits with DSTs, including depreciation.
I'd recommend looking more into DSTs...
I will give you #4. I will help you sell DST :)
The projection of return of CRE during high interest rate like today, could be more interesting rather than investing at DSCR SFR with 9% interest rate rate. Rather than having SFR with 9% interest rate , 1% appreciation and 1% CoC, I'd rather invest in industrial space DST down south. with 6% cap rate.
In one of area where house is sitting at 3 mils near here, there's always a meeting the DST broker selling the idea, that's the right target audience I guess.
Thanks!
I also want to add that a lot of the properties in a DST were bought months ago, then placed into the trust. Meaning that the interest rate they locked in was before rates went up, a lot of the current DSTs have 3-5% interest rates.
I also want to add that a lot of the properties in a DST were bought months ago, then placed into the trust. Meaning that the interest rate they locked in was before rates went up, a lot of the current DSTs have 3-5% interest rates.