DST's for a 1031 exchange - Anybody been burned by these?

6 Replies

I've collected historical data on as many DST deals and TIC deals as I can from multiple sponsors. From the larger ships, there is some variation in returns, but most return as expected or better.

I’d watch out for smaller, less established shops. We have seen a few deals that went very bad from these sponsors. Not to say these are all bad, but I’d dig deep before investing.

Originally posted by @Pete Z. :


I am researching these for a 1031 exchange. Anyone have good or bad experiences with these?

What I learned is that it is better to have the closing for the property you are selling and buying at the same closing company (if possible). Assuming that same closing company can handle the 1031, then it goes really smoothly. 

The other thing to be aware of is the time frames to select the new property. That can put some pressure on things.

It is all pretty easy as long as there is good communications.

DST's are a good option but they'e a Reg D offering for a reason.

You need to be an accredited investor- meaning the IRS is assuming you to be a  more savvy investor who is knowledgeable on this type of risk. 

Inland and Passco are the two sponsors I went with when I launched the passive REI area of the Advisory firm where I worked. I'd trust most deals from both. We had an extensive due diligence worksheet we used to vet each deal before we referred clients into it as our advisers were all Fiduciaries and we needed to refer based on the clients best interest.

@Leslie Pappas wrote the book on DST's. I'd reach out to her.

Just be aware of the time you have to find your next property once you close out of the previous and are 1031 exchanging. Work with a reputable company that can manage the process for you.