RENT Magazine Q2 '23

FAILING 1031 EXCHANGES ON THE RISE: WHY DSTS COULD BE THE ANSWER. If you are in the midst of a 1031 Exchange in today’s unstable debt market, you may be having a difficult time finding a mortgage to satisfy your 1031 exchange requirements. These days, 1031 exchange investors are afraid they might not be able to locate and close on their replacement property within the 1031 exchange timeframe. Why is this an important factor to consider? Let’s say that you have successfully sold your investment property and are now searching for a replacement property to complete your 1031 Exchange. In today’s market, you may discover that identifying and closing on high-quality, “like-kind” assets within the specified timeframe is not as easy as it sounds.

ENTER THE DELAWARE STATUTORY TRUST This situation is when DSTs can be used as a backup option. DSTs are pre-packaged specifically for 1031 Exchanges. They can be a very helpful tool to have in the bag should your primary real property option fall through and you’re facing a failed exchange. In addition, because of their turnkey nature, DSTs can often be closed within just 3 -5 days, which provides investors a viable strategy to successfully complete their 1031 Exchange. That’s why many investors find DSTs also make a suitable primary investment option for their 1031 Exchanges. Kay Properties has a variety of leveraged DSTs that are pre-structured with non-recourse debt already built-in, typically ranging from 30% to 70% offering loan to value (LTV).


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