Why People Haven't Heard of The DST As the First Choice

[Brett P Swarts]

Juan Vargas:

Why people haven't heard of the Deferred Sales Trust as much as the 1031 exchange?

Brett Swarts:

Great question, Juan. So remember when I said I grew up in the real estate, and I've loved it all my life, and I invest, and if I told you about invest in multifamily senior housing and different things, so I love real estate, and I'm sure you and your listeners do too. But real estate is like a religion. By the way, I'm a part of that real estate religion. One of its doctrines is the 1031 and people are trained, and I guess the information that comes in from your broker, which, by the way, your broker doesn't want you to know about the Deferred Sales Trust. Why? Because that doesn't necessarily lead to more commissions for him, I'm speaking because I am a commercial real estate broker. So I remember those days, we loved having 1031 buyers, or sellers. Because it's like, the deals are gonna happen, we're gonna get a commission. So they don't necessarily want to tell you about the Deferred Sales Trust, where you could just be retired from all of that, and maybe not buy for 5 or 10 years. They want to keep you in 1031. Race if you will.

The second one is 1031 companies, they don't want you to know about it either, right? Because they make all their money on the 1031. If you go to a deferred sales trust, they're not holding the money. And that's where most of the education right now is in the commercial real estate world. That being said, the Marcus and Millichap, I've been in the San Francisco office, the Tampa office, we've been in the Denver office, the Orlando office, all these different offices to train folks. So there's not to say that those managers won't bring folks in. It's just the brokers are not getting paid to do deferred sales trust, they're getting paid to do 1031 exchange. So that's the first thing. The second thing is though, the other doctrine, by the way, is an installment sale. Both of them are used, are very well known. That's what we are, we're just adding manufactured installment sale, we're just creative on how we apply it. By the way, it's a proprietary structure that is protected. Part of it, why it's proprietary is one, we don't want the competition. But two, we also don't want it to fail. We don't anyone to abuse the structure and then it fails. Because it's not just the structure, it's the team, which executes the strategy. And that's basically my role, to work with the tax attorneys, to work with the financial advisor, to work with the commercial real estate broker, to get everyone in the room and basically say, how do we perfect and use this strategy to be as tax efficient.

So that being said, a lot of people think it's too good to be true, because they never heard of it. But we would also just counter that with the evidence, 1000s of closes now, over 24-year track record, you know, get to know us, bring in your trusted professionals and make sure that they ask us the tough questions. We've had 14 no change IRS audits. The biggest one was a $125 million dollar deal in San Diego as a commercial real estate sale. Not one single issue with the IRS. We've also had National Law Firm CPAs, we have 1000s of professionals who have signed up with us. We've done deals with Marcus and Millichap. We've done deals with Keller Williams, we've done deals with just about every title company. And we have exchange companies that work with us so the counter I guess the answer to sum it all up if you don't know about it, it's because you haven't talked to us yet. And that's really as simple as that.

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