All Forum Posts by: Brandon Bruckman

On a national level, IPX and Exeter have handled a significant amount of funds for our clients without issue.   You point is well taken however, this is an unregulated industry with horror stories well documented on this platform. 

@Tim Jensen are you looking at a property in an opportunity zone (that you own and manage) or an opportunity zone fund?  Either way you do not need to perform a 1031 exchange to invest in an OZ.  You have a 180 time line from sale to close on an OZ but do not need to follow the same procedure as a 1031 exchange.  You do not need a qualified intermediary and you do not need to invest all your proceeds.  Only the gain from your prior sale needs to be invested.  

If you are looking at OZ funds, there are a lot of them out there.  Our preference is funds that have geographic focus, pre-defined projects and a sponsor with deep experience investing in those projects and markets.  

Hope that helps. 

Thanks!  You would be surprised (or not!).

Depends on what you are looking for. 721 will get you to a REIT-like structure. However, you can not exit without experiencing a tax liability. We refer to this option as the ultimate end game. Use the 721, then once you pass your heirs can utilize the step-up in basis.

You're doing well! There are about 40 DST operators and most are smaller (however, in most cases, with significant real estate experience). If you eliminate the broker-dealer sales commission, you can get down to single digit upfront fee load percentage.

On your concerns, yes most DSTs have been purchased recently. To make sure you are dealing with a reputable operator you can ask for anything. Their track record, reports and statements to confirm they own the property and any third party reports related to the DST or to the operator. The best operators have third-parties produce reports on their firm.

Hope this helps. 

Purchasing DSTs through a registered investment adviser lowers the upfront cost, but doesn't eliminate it. Sponsors of DSTs will still take an acquisition fee and investors pay for the legal structure to form the DST. These costs will always be additive compared with purchasing property yourself.

As an investor, you are paying to be passive and for the ability to exchange into these vehicles.  Naturally, sponsors don't work for free!!

@Rebecca Six I'm curious, how much of your initial capital went into the ground with turnkey single family homes you purchased? Also, what are the on-going management fees?

I see. Without all the information, seems like you would be hard pressed to produce the same cash/economics with a zero DST and another home without a mortgage. However, if you are intent on selling, what you are proposing would work for your exchange.

Zero coupon DSTs typically have higher up front fees than cash flowing DSTs.  This is a large drawback of the structure.  For our clients, we will use a small amount of zero coupon DSTs to replace debt in an exchange, but other than that we usually stay away.  

You wouldn't need to buy five DSTs. You could invest the full amount in one Zero DST.

Reading through your example, you would have to look at the economics of acquiring a mortgage for replacement vs the cash / zero DST option.

Hope that helps a bit.