Delaware statutory trusts offer a number of potential advantages to investors. When used correctly, it can be a powerful tool for building and preserving wealth. Let’s discuss and list the most popular advantages for investors using DSTs for their 1031 exchange.
- Free yourself from the three Ts of active management: Since they offer the potential for hassle-free income, numerous investors who are grown tired of managing Toilets, Tenants, and Trust are attracted to Delaware Statutory Trusts. Growing consideration of DSTs is particularly evident among investors transitioning from active real estate management by means of a 1031 tax-deferred exchange. Being a landlord can be a tiring, time consuming occupation which many property owners would prefer not to continue as they approach retirement. Getting the money out of a property held over a lifetime will, by and large, result in a significant capital gains tax hit that will erase up to one-third of the wealth that has been amassed unless steps are taken to defer and avoid taxes that may be due on sale. This is where Delaware Statutory Trust helps investors who utilize a 1031 exchange to reinvest in professionally managed institutional grade assets that may provide stable income with no significant management overhead.
- Access to institutional grade assets: Delaware Statutory Trusts offer investors opportunities to invest in institutional grade assets including apartments, triple net leases (NNN) properties, storage, and retail that have in place professional property management. DST assets typically range in value from $10M up to $100M.
- Potential for non–recourse debt vs recourse debt: Since the DST Trustee is the sole borrower, investors have no loan liability and do not need to complete loan applications to qualify for the investment. Most investors who purchase traditional wholly owned investment properties are stuck with full or partial recourse loans from their lenders and therefore increasing their ownership risks.
- Potential for diversification into multiple properties:Since up to several hundred investors may invest in each DST, the minimum investments can be as low as $25K thereby allowing investors to diversify their investments into multiple properties. This not only allows potential investors easier access to Delaware Statutory Trust but allows investors to spread risk across multiple assets instead of containing it in a single property.
Please contact us at 866 398-1031 or via email at info@FirstGuardianGroup.com to learn more about Delaware Statutory Trust
BIO : Paul Getty
Paul Getty is a licensed real estate broker in the state of California and Texas and has been directly involved in commercial transactions totaling over $2 billion on assets throughout the United States. His experience spans all major asset classes including retail, office, multifamily, and student and senior housing.Paul Getty’s transaction experience includes buy and sell side representation, sourcing and structuring of debt and equity, work-outs, and asset and property management. He has worked closely with nationally prominent real estate brokerage and investment organizations including Marcus Millichap, CB Richard Ellis, JP Morgan, and Morgan Stanley among others on the firm’s numerous transactions.Paul Getty also maintains a broad network of active buyers and sellers of commercial real estate including lenders, institutions, family office managers, and high net worth individuals.
Prior to founding First Guardian Group/FGG1031,Paul Getty was a founder and CEO of Venture Navigation, a boutique investment banking firm specializing in structuring equity investments made by institutions and high net worth individuals. He possesses over 25 years of comprehensive worldwide business management experience in environments ranging from early phase start-ups to multi-billion dollar corporations. His track record includes participation in IPOs and successful M&A activity that has resulted in investor returns of over $700M.
Paul Getty holds an MBA in Finance from the University of Michigan, graduating with honors, and a Bachelor’s Degree in Chemistry from Wayne State University. He is a member of Institute of Real Estate Management (IREM), a Certified Property Manager Candidate (CPM), and a member of the US Green Building Council.Paul Getty holds Series 22, 62, and 63 securities licenses and is a registered representative with LightPath Capital Inc, member FINRA /SIPC .
Paul Getty is a noted speaker, author, and actively lectures on investments and sales and management related topics. He is author of The 12 Magic Slides ,Regulation A+: How the JOBS Act Creates Opportunities for Entrepreneurs and Investors , and Tax Deferral Strategies Utilizing the Delaware Statutory Trust (DST), available on Amazon and other retail outlets.
This material is not intended as tax or legal advice so please do speak with your attorney and CPA prior to considering an investment. This material contains information that has been obtained from sources believed to be reliable. However, FGG1031, First Guardian Group, LightPath Capital, Inc., and their representatives do not guarantee the accuracy and validity of the information herein. Investors should perform their own investigations before considering any investment. There are material risks associated with investing in real estate, Delaware Statutory Trust (DST) and 1031 Exchange properties. These include, but are not limited to, tenant vacancies, declining market values, potential loss of entire investment principal.
Past performance is not a guarantee of future results: potential cash flow, potential returns, and potential appreciation are not guaranteed in any way and adverse tax consequences can take effect. The income stream and depreciation schedule for any investment property may affect the property owner’s income bracket and/or tax status. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities. All financed real estate investments have a potential for foreclosure. Delaware Statutory Trust (DST) investments are commonly offered through private placement offerings and are illiquid securities. There is no secondary market for these investments. Like any investment in real estate, if a property unexpectedly loses tenants or sustains substantial damage, there is potential for suspension of cash flow distributions. Costs associated with the transaction may impact investors’ returns and may outweigh the tax benefits.
IRC Section 1031, IRC Section 1033, and IRC Section 721 are complex tax codes; therefore, you should consult your tax and legal professional for details regarding your situation. Securities offered through registered representatives of LightPath Capital, Inc. Member FINRA / SIPC. FGG1031, First Guardian Group, and LightPath Capital, Inc. are separate entities.
DST 1031 properties are only available to accredited investors (generally described as having a net worth of over one million dollars exclusive of primary residence) and accredited entities only (generally described as an entity owned entirely by accredited individuals and/or an entity with gross assets of greater than five million dollars). If you are unsure if you are an accredited investor and/or an accredited entity, please verify with your CPA and Attorney prior to considering an investment. You may be required to verify your status as an accredited investor.