Updated over 5 years ago on . Most recent reply
1031 Exchange Alternative
In certain circumstances, an investor doesn't want to be a landlord anymore, maybe they can't find replacement property or maybe they don't want to deal with any of the issues associated with being a landlord. I was recently introduced to a great alternative. It's called a 1031 DST and is essentially a pre-packaged option allowing the sales proceeds from the relinquished property to move directly into the DST as a proportionate owner in a institution grade property managed by professional property managers. There are many companies that offer these products and many assets classes to choose from depending on location, asset class and projected return. Best, Jeff
Most Popular Reply
- Qualified Intermediary for 1031 Exchanges
- St. Petersburg, FL
- 9,616
- Votes |
- 9,337
- Posts
@Jeffrey Proeh, You're right. The DST can be a great transitional tool for a real estate investor and provide a good fall back position in a 1031 exchange. In any case the 1031 must still be used in order to get the tax deferral. But the DST becomes the replacement property for the 1031.
Their structure was officially blessed by the IRS in 2004 to qualify for 1031 exchange replacement.
- Dave Foster
