• Make sure you use a firm that is very particular with their DST Properties While many DST 1031 firms use the entire list of on-market DST properties offered by sponsors, DST advisory firms that specialize in DST 1031 exchanges dismiss many of these properties because they just don’t live up to the established investment standards of a specialist firm. In fact, it is common for the majority of firms that don’t specialize in DST properties to include properties that are higher risk, overpriced, and have little historic performance data. Also highly specialized DST advisory firms perform their own due diligence so that their clients are able to consider the best performing assets with their CPA’s and lawyers. Ask where the advisory firm sources their properties for 1031 exchanges, and what type of due diligence they have performed on the properties. KEY TAKEAWAY • Make sure you use a firm that has access to off-market properties, all-cash properties, and leveraged properties. Like a lot of things in life, it is often better to have access to as wide an array of options as possible. DST 1031 specialist firms do thousands of deals a year and have insights and avenues other financial advisors or even real estate brokers don’t have. This is critical for the 1031 client because not every 1031 exchange requirement is the same. Like the proverbial snowflake model, each 1031 exchange scenario has different challenges and nuances. The breadth and depth of the 1031 portfolio can help clients create a customized DST 1031 investment direction that is completely designed for their specific needs. A good rule of thumb is to select a DST advisory firm that has at least 30-45 offering options at any given time. This also means having multiple debt structures as well. Because the IRS requires investors to replace the value of debt when making a 1031 exchange, a good DST 1031 advisory firm should have both properties with debt and properties that are available for all-cash/debt-free options. Ask if they have access to off-market, leveraged, and all-cash/debt-free properties available for a 1031 exchange. KEY TAKEAWAY
SELECT A DST ADVISORY FIRM THAT HAS AT LEAST 30-45 OFFERING OPTIONS.
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