1031 Real Estate Exchanges
Your 1031 Exchange Real Estate Managers
Many of our clients own real estate investment property as part of their overall financial portfolios and we have helped many of these clients use the 1031 exchange to sell a property and reinvest in another like-kind property. That tax advantages of 1031 exchanges are well-known and that is why this approach to real estate investing remains so popular.
Navigating the complexities of a 1031 exchange can be daunting due to its intricate rules and potential risks. Our team at WhiteStone has developed profound expertise in structuring these exchanges to ensure compliance, maximize benefits, and minimize any associated risks. This commitment to excellence in 1031 exchanges makes us a leading choice for real estate investors seeking knowledgeable and reliable exchange experts.
The Delaware Statutory Trust (DST) as a Strategic Investment Vehicle
The Delaware Statutory Trust (DST) is an innovative structure within the realm of 1031 exchanges that offers distinct advantages, qualifying as a like-kind property under 1031 guidelines. The DST is favored for its ability to simplify investment in sizable, institutional-quality real estate through fractional ownership. Here are several key benefits of using a DST for your 1031 exchange:
- Passive Investment Opportunity: Eliminates the day-to-day hassles of property management.
- Diversification: Allows investment across multiple properties, locations, and property types, enhancing the potential for balanced risk.
- Estate Planning: Facilitates the seamless transfer of fractional shares to heirs, potentially reducing family disputes over inheritance.
- Accessibility: With minimum investments typically as low as $25,000, DSTs are accessible to a broader range of investors.
- Expediency: DST investments can often be finalized within days, which is crucial for meeting the strict timelines of 1031 exchanges.
Considerations and Limitations of DST Investments
While DSTs offer numerous advantages, they also come with specific limitations that should be carefully considered:
- Decision Making: All property decisions are made by trustees, with no direct control afforded to investors.
- Liquidity Concerns: DSTs generally lack liquidity, and there is no predetermined schedule for when properties will be sold.
- Investor Eligibility: DSTs are available exclusively to accredited investors who meet specific income or net worth criteria.
- Capital Constraints: Once the offering is closed, no additional capital can be raised.
Understanding these aspects is crucial in aligning your investment strategy with your financial goals, and our team is skilled in facilitating DST 1031 exchanges that meet these criteria.