I'm interested in putting a property for sale into a DST Deferred Sale Trust. Since the proceeds of the sale is placed in a trust. The trust then reinvest those sale proceed, and the investor can be paid from the interest of the investment. Sounds good, but the investments made can also not turn out well and monies are lost, reducing the payments made, and more important the proceeds of the sale. Is this a possibility?
@David Brown great questions. Every investment has risk and $ can be lost. The strength of the deferred sales trust is its flexibility and relatives all pressure to purchase a property via a short time frame using a 1031 exchange. Most of the clients also choose a lower risk portfolio to invest in since they have 30-40% more invested since the tax is deferred. This gives investors the opportunity to take less risk since they have more wealth. Plus the Deferred sales trust funds can be invested into just about every asset class.
Here is a more detailed overview: The deferred sales trust can help you defer your tax to preserve wealth by deferring 30-50% of your gain on the sale of a business, primary home, investment real estate( including carried interest) and giving you the potential to earn interest on this pre-taxed amount. It also gives you the option to sell (your highly appreciated asset) high (at any time) and buy (investment real estate or business) low (with a new depreciation schedule at any time which is optimal time) to create wealth. It gives you the opportunity to diversify your equity into investment grade securities, investment real estate of your own or with partners. All of this which helps to diversify, protect and create more wealth.