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DST1031HQ is an investment platform.  DST1031HQ is not a registered broker-dealer. The furnishing representative and their firm are independent of  DST1031HQ and CIS. 

What Is A Delaware Statutory Trust?

A Delaware Statutory Trust (DST) is a separate legal entity formed as a trust under Delaware law. If properly structured, the DST will be classified as a grantor trust for federal income tax purposes and, as a result, the purchaser of a beneficial interest in the trust will acquire an undivided interest in the asset(s) held by the DST. DSTs may qualify for 1031 exchanges. 

HOW DOES A DST WORK?

A real estate sponsor company, which also acts as the master tenant, buys the property under the 

DST umbrella and opens the trust to potential accredited investors to purchase a beneficial interest.

 

DST investors will potentially benefit from a property that is professionally run and of institutional value. For example, the underlying property could be an apartment building of 500 units, a medical office 

property of 100,000 square feet or a shopping center leased to tenants of investment grade.

Many DST contributions are capital that small to mid-size accredited investors would otherwise not be able to afford; however, they can obtain this type of asset by pooling money with other investors.​

Investors familiar with the investment strategy of tenants in common (TIC) may see some parallels in the definition of DST; however, recognizing the differences between the two concepts is crucial. While a TIC may have up to 35 investors, each owning an undivided, pro-rata share of the title to the property, a DST may have up to 100 investors (sometimes more), with each investor owning a beneficial interest in the trust which, in turn, owns the underlying asset.

WHAT ARE SOME OF THE POTENTIAL BENEFITS OF A DST?

Diversification into More than One Property and in More than One Market
Predictability and Flexibility when Closing
Non-Recourse, Institutional Financing
Flexible Investment Amounts
Competitive Income

Competitive Income

Access to Institutional Quality Real Estate

No management Responsibilities, Professionally Managed
Investment Portfolio Diversification

A TYPICAL 1031 EXCHANGE HAS 

THREE BASIC STEPS

  1. Exchanger sells property, known as the relinquished property, and proceeds are escrowed with a Qualified Intermediary (QI).
     

  2. Qualified Intermediary, Through a written agreement with the investor, transfers funds for purchase of replacement property.
     

  3. Exchanger receives new property (or DST interest).

IDENTIFICATION RULES

  1. Three Property Rule: The taxpayer may identify up to three properties of any fair market value and purchase any (or all) of them, regardless of total value. This is the most commonly used identification rule.
     

  2. 200% Rule: The taxpayer may identify an unlimited number of properties provided the total fair market value of all properties identified does not exceed 200% of the fair market value of the relinquished property and may purchase as any (or all) of the identified properties.
     

  3. 95% Rule: If the taxpayer identifies properties in excess of both of the above rules, then the taxpayer must acquire 95% of the value of all properties identified.

TIMELINE FOR DST

Sell Property

Identify Property

Buy Property

WHO IS AN ACCREDITED INVESTOR?

REGULATION D INVESTMENTS ARE GENERALLY ONLY AVAILABLE TO ACCREDITED INVESTORS

For most Investors this means:

NET WORTH EXCEEDS $1,000,000

(NOT INCLUDING PRIMARY RESIDENCE)

Or

Individual Income Exceeds:

$200K for EACH of Last 2 Years

Joint Income Exceeds:

$300K for EACH of Last 2 Years

* DST1031HQ does not provide tax, legal or accounting advice, nor can we make any representations or warranties regarding the tax consequences of your exchange transaction. We strongly encourage you to seek appropriate professional advice regarding your specific facts and circumstances. This is for informational purposes only and does not constitute an offer to purchase or sell scrutinized real estate investments. Such offers are only made through the Sponsors Private Placement Memorandum (PPM) which is solely available to accredited investors and accredited entities. There are risks associated with investing in real estate and Delaware Statutory Trust (DST) properties including, but not limited to, loss of entire investment principal, declining market values, tenant vacancies, and illiquidity. Investors should read the PPM carefully before investing paying special attention to the risk section.

And will be able to demonstrate that this income level will continue.

And will be able to demonstrate that this income level will continue.