Friday, January 12th, 2018 January12th2018

FFF: Delaware Statutory Trusts

Published on January 12th, 2018

Happy Friday friends, here’s a fun fact:

Traditional 1031 Exchanges aren’t the only way to avoid paying capital gain taxes when you sell…there’s another way called 1031 Delaware Statutory Trusts.

With this strategy you still use a 1031 Exchange but instead of rolling your proceeds into a replacement property – you roll the proceeds into a Delaware Statutory Trust (DST).

In 2004, the IRS ruled that a Delaware Statutory Trust qualified as “real estate” and, as such, could serve as a replacement property solution for 1031 Exchange transactions.

That means you can acquire a fractional interest in a DST and become a part owner in a much larger real estate investment (a 300-unit apartment building, a grocery center, medical office building, etc).

The structure is pitched to sellers who want a totally hands-off way of owning income-producing real estate, especially retirees.  There are about a dozen companies (sponsors) that put these deals together.  They’re professionally managed and turnkey.

The downside is liquidity.  You can’t click your mouse and sell.  The holding period might be five to 10 years.  You also have very little control.

We don’t recommend this structure but you should at least know it exists.


Considering selling?  Get the step-by-step blueprint to sell your property for the absolute highest price the market will pay at www.SellforMorePlan.com


About Beau Beach, CCIM

Beau is an elite Investment Real Estate Broker, Forbes contributor, author, investor and adoring father of four. His clients appreciate his no-nonsense demeanor and his legendary work ethic.

He’s the author of the books The 3 Reasons: Why Most Commercial Properties Don’t Sell and True Wealth: What Every Seller Should Know About 1031 Exchanges.

Beau leads Prowess IRES which specializes in selling investment real estate for the absolute highest price the market will pay in the Milwaukee, South Florida, Chicago and Nashville markets.

Beau can be reached at 414-324-4938, 561-425-9935 or Beau@ProwessIRES.com