• Don Meredith

5 Reasons People are Replacing Their 1031 Exchange Properties with DSTs


Delaware Statutory Trusts solve a lot of the headaches of owning and managing rental properties, but real estate investors are looking at them for more reasons than just that. And many are getting involved through 1031 exchanges.

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5 Reasons people are choosing DSTs as replacements for their 1031 exchange: 1) As a Backup Strategy

In a competitive real estate market an investor may not be able to find a suitable replacement property for their 1031 exchange. DSTs make a great option and should be named/identified in an exchange if only for that reason. Once a real estate investor has sold a property, they have 45 days to identify a replacement and 180 days to close or the tax-free exchange will be disallowed by the IRS.

2) Capture Equity in a Hot Market

When markets are at all-time highs, investors may want to take their gains off the table and invest again using the leverage inside a DST offering.

3) Protect the Family

A family can be vulnerable when only one spouse knows how to manage real estate investment assets. With passive DSTs, the management is effectively outsourced, which can protect a family should one spouse no longer have the capacity to take care of his or her own interests.

4) Avoid Ongoing Repairs on Actively Managed Property By Going Passive

Real estate investors know that one day they may have to replace expensive roofs and AC units, do foundation repairs, face potential lawsuits and encounter other surprise expenses that come with investing in real estate. DSTs may protect investors from these types of surprise expenses.

5) Major Part of Retirement and Estate Planning

DSTs can offer many retirement, tax and estate planning options. Passive income, elimination of personal liability, freedom, ability to manage cash flows and wealth transfer are just a few of the opportunities that DSTs can afford investors and their retirement planners.


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The above article contains information extracted from an article published on Kiplinger.com called "Top 10 Reasons Real Estate Investors Are Jumping into DSTs by: Daniel Goodwin - March 21, 2021. link to online article




*** DST investments are illiquid, highly speculative and like all real estate, may involve substantial risks.  DST owners do not maintain control over management decisions and are subject to additional IRS regulations. Potential tax benefits must be weighed against the costs and fees associated with a DST investment and its management. 


Contact Don Meredith of Tactical Income, to learn more about Delaware Statutory Trusts (DSTs) and 1031 Exchanges at: don@lightpathcapital.com or (619) 726-6100.

Securities through LightPath Capital, Inc., Member FINRA/SiPC, 1560 E. Southlake Blvd., Suite 100 Southlake, TX 76092 925-899-1709 Direct 214-734-2957 Office