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Pros and Cons of the Delaware Statutory Trust

The Delaware Statutory Trust (DST):

is a legal entity created under Delaware state laws. It is a private governing agreement to hold, manage, administer, invest or operate all types of commercial properties.
Investing in a Delaware Statutory Trust entitles you to a share of the income earned by the underlying real properties and increases the value of your interest as the property under the trust appreciates. Here are some of the pros and cons.

Pros of the Delaware Statutory Trust:

 • Low investment minimum of $25,000 for cash investors and $100,000 for 1031 exchanges
• Diversification. DSTs allow you to diversify your portfolio and spread out your risk
• Income-earning potential. Income generated from DST properties will be deposited into your account monthly
• Remote management. A sponsor-affiliated trustee will manage all DST properties on behalf of the investors
• Liability protection. Investors will be protected from any liabilities associated with the properties

Cons of the Delaware Statutory Trust:

• Loss of control and decision-making power
• Economic risks associated with real estate can reduce the value of your interest
• Execution risks that could invalidate the exchange
• Illiquidity. You will not be able to sell your claim for cash for 5-10 years
• You must be an accredited investor with an annual income of at least $200,000 or a net worth of over $1 million
• Regulation risks that could result in legal and financial penalties

Contact Whitestone Wealth Management Today!

Do you want to invest in a Delaware Statutory Trust? Reach out to us at Whitestone Wealth Management in San Antonio. We offer various wealth management services and will guide you through the intricacies of the 1031 exchange process using the Delaware Statutory Trust (DST) structure. Contact us today to schedule a free consultation.


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