The Delaware Statutory Trust (DST) Basics You Need To Know Like ABC
Every investor is either seen finding places to invest in or finding ways to defer the taxes on his capital gains. There are many ways to defer taxes on capital gains like DST, NNN, REIT but DST is always the more preferred one.
However, if you are a baby boomer, you must be quite inquisitive. Read the blog to get the answers to some of your most basic questions.
What is Delaware Statutory Trust (DST)?
DST lets the investors invest in a Beneficial ownership interest in their trust. One should not mistake this to be a Real Estate partnership, the ownership is that of the commercial real estate. Herein, up to 499 people can invest in one BOI. Each investor is called a beneficiary. Investors use DST to do 1031 exchange and defer taxes.
DST Investment Professionals are always there to help you when you need. So, don’t worry even if you are doing DST for the first time.
How does a typical DST work?
The master tenant, which is a real estate sponsor firm acquires the property under DST. Thereafter, he opens the trust for the potential investors. The investor can either submit the 1031 exchange proceeds or purchase an interest.
Once the investment is done, the investors have endless possibilities to gain benefit from their interest in the form of net income, potential growth, and tax deductions. The property used by the DST may be an apartment building, a shopping centre or even a medical office property.
Now, some of you may wonder if TIC and DST are the same. Well! No, they aren’t. In a Tenant in Common (TIC), the limit is that of 35 investors. Also, each one of them owns an undivided share on a pro-rata basis.
What are the Benefits of Delaware Statutory Trust?
Put simply, there is a trustee who takes all the decisions and in case of losses the investors can declare themselves bankrupt and get away without suffering the losses. Hence, the ownership is passive and the investors are not held much liable, while they enjoy benefits if the investment reaps benefits.
Probable increase in cash flow
As mentioned in the earlier point as well, by investing in DST the investors not only can defer taxes but also earn interest on their investment.
Lesser money, Bigger Investment
By investing in DST, the investors get the advantage in 1031 exchange. Besides, they need not invest a huge amount if they want to invest in bigger properties. Each investor can invest an amount as lower as $ 1,00,000. However, you must get in touch with some DST Investment Professionals so that you make the best investment decision. With great property management, diligence, and determined financing your 1031 exchange gets a lot simpler.
Should I invest?
You are smart enough to decide for yourself by now. We have listed the benefits of investing in a DST and regarding the disadvantages, there don’t really seem to be any. So, as soon as you make up your mind to invest in DST, get in touch with Investment Net LLC. We have a pool of DST Investment Professionals and DST Experts to help you with the process and suggest the best commercial real estate properties to invest in according to your budget.