Updated 9 months ago on .
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1031 Exchange - DST?
Hi - we're getting ready to "push the button" with Kay Properties on a 1031 finance purchase of a $100,000 offering. Still doing a little Due Diligence. This will be a first DST purchase for us, and the 3rd time involved with a 1031 exchange. Two questions come to mind: 1) does anyone have any experience with Kay Properties? If so - how did that go? 2) how are "assessments" handled w/ a DST? in other words, if the roof blows off a FedEx building, do they typically get a loan to replace it, or are the investors assessed? TIA!
Chris
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Hi @Carlos Ptriawan. My firm did launch a no-load DST last Fall and we (almost) filled it up quickly. So I would be happy to speak to this with no sales motive involved. Feel free to reach out to me to discuss what we've learned.
More importantly, one of our investors has invested in a bunch of them and recently raised an issue that I was unaware of until recently. According to him, some of the DST operators/brokers work together to sell off DST assets much sooner than planned. They hope to move their investors into a similar deal with similar returns and keep their capital gains deferral going. This sounds fine until one realizes they are paying all of the front-end broker loads and operator acquisition fees all over again. If you do this every three years, you've paid all of this three times in a decade. As opposed to finding a DST operator who holds for ten years and paying those fees once. Think about how these fees cut into capital gains! DST Investors should add this possibility into your due diligence checklist.