Welcome to DST 1031 Essentials with Kay Properties — An in-depth look at the many recurring themes and nuances to the Delaware Statutory Trust (DST) investment process.
Topics will cover 1031 exchanges, ins and outs of the Delaware Statutory Trust structure, timing, cash investing, REITS, funds, real estate and more.
The kpi1031.com platform not only provides access to these 25+ different sponsor companies, but also custom DSTs only available to Kay clients, full due diligence and vetting on each DST property on the platform (typically 20-40 DSTs), and an active DST secondary market. Kay Properties team members collectively have over 150 years of real estate experience, are licensed in all 50 states, and have participated in over 30 Billion of DST 1031 investments
In this week's episode, Vice President Matt McFarland and Vice President Orrin Barrow talk about the risks when investing in real estate, specifically in DSTs. This is an important topic prior to making any investments and today they share how DST investors mitigate risks when they're getting ready to invest in a property.
Key Takeaways:
[1:00] Risks and disclosures.
[3:50] About Kay Properties & Investments.
[4:30] Matt introduces Orrin and today's topic.
[5:40] How are clients educated about the DSTs risks?
[6:30] With any investment, there are inherent risks.
[7:50] DSTs include fees so having confidence in the sponsor company's business plan and competency to overcome those fees is important.
[9:10] In addition to introductory conversations, Matt shares that they have a lot of resources available for educational purposes and actual private place memorandums.
[10:35] How do they identify risks and mitigate them through the DST structure?
[11:25] Some of the risks in real estate are foreclosures. Orrin shares some of the scenarios where this can happen.
[13:00] Orrin talks about different diversifications of an investor's proceeds and how this can help mitigate risks.
[14:10] Orrin also advises that if you don't need to take on debt in your exchange, then you can opt for debt-free properties to alleviate risks.
[14:55] He also shares what they do at Kay Properties on top to alleviate as much risk for the investor.
[15:50] Matt also adds further about concentration risk and why they try to avoid that in Kay Properties.
[17:55] He also mentions about certain asset classes that they won't touch in Kay Properties and explains why they view it to have higher risk.
[19:00] Matt also talks about competition risk and how their due diligence team vet their properties to identify this risk.
[20:20] In this very compressed market we have these days, Matt stresses the importance of these risks to be aware of and mitigate.
[22:25] Orrin also shares his sweet spot to start digging into the offer before your intended closing in today's market.
[23:35] Active vs passive investor. Orrin shares how DST is not for everybody.
Resources
Website: https://www.kpi1031.com/
Call Kay Properties at 855-899-4597
Meet the Kay Properties Team: kpi1031.com/meet-our-team
About Kay Properties and www.kpi1031.com
Securities offered through FNEX Capital member FINRA, SIPC. Potential returns and appreciation are never guaranteed and loss of principal is possible. Please speak with your CPA and attorney for tax and legal advice.
