DSTs – syndicated properties that can only be sold to accredited investors as securities – are very popular right now. While DSTs can be great, they’re difficult for some investors to exchange into and can’t be utilized by everyone.
An alternative to the DST is the Triple Net Lease. I had a client back in the 1990s who would buy Arby’s locations on a triple net basis when nobody wanted to buy them. He had transitioned from management intensive apartments in South Minneapolis to triple net leased Arby’s locations. Eventually he sold those and 1031 exchanged into gas stations in Iowa.
The point is that there are alternatives to the securitized products offered by financial services firms. They are not identical in risk, however. With a triple net lease deal, you have a lot of eggs in one basket. If your tenant decides not to do what they’re supposed to do, then the value of the property will likely decline. You need to look at the value of the property in case it ever needs to be repurposed.
Defer Your Taxes with a 1031 Exchange of Investment Real Estate
Defer your capital gains tax burden by conducting a 1031 exchange of your investment real estate. As long as your property is held for investment purposes or for use in your trade or business, you are eligible for 1031 exchange treatment. Doing a 1031 exchange instead of a straight forward sale means that you get to defer the capital gains taxes on the sale and reinvest those proceeds into a bigger, better replacement property that will continue to compound over time. Reach out to CPEC1031, LLC today to learn more about the like-kind exchange process and see if you are a good candidate.
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
Defer the tax. Maximize your gain.
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