Co-Founders Daniel P. Raupp, Jeffrey A Kiesnoski and Jon Paul Cirelli of Fortitude Investment Group successfully facilitated a Full Cycle 1031 Real Estate Exchange utilizing the Delaware Statutory Trust, DST, for a high net worth accredited investor with the recent announcement from Inland Private Capital Corporation disposition of a FedEx ground facility in Zionsville, Indiana.

Inland’s sale of the ground facility resulted in a total return to the investors of 123 percent (calculated based on the aggregate amount of original capital invested in the property). In addition, the sale resulted in an 11.95 percent average annual return (calculated using the cash flow from the property’s operations, the proceeds from the sale, and the duration of the hold period to determine an annualized rate of return, inclusive of all fees and expenses). [1]

In addition, the team at Fortitude Investment Group, LLC helped another high net worth accredited investor, who sold a horse farm in the prestigious east end village of Southampton NY, successfully complete a 1031 Exchange into multiple 1031 Delaware Statutory Trust investments offered through national DST sponsors.  The client was able to find these securitized properties through Fortitude Investment Groups website

Fortitude Investment Group prides itself with working with NYC’s most recognizable and highly acclaimed real estate attorneys, CPA’s, investment real estate brokers and national qualified intermediaries to guide accredited investors looking for 100% passive securitized real estate investments to compete their 1031 Exchange needs.

1031 real estate exchanges utilizing the DST may be a viable alternative for many accredited investors.   They can relinquish their investment properties and diversify into institutional quality securitized real estate DST’s, for as little as $100,000.00 in some cases, that can complete their exchange and give them the ability to diversify into multiple DST’s in various sectors such as net lease, healthcare, student housing etc.

Theses alternative property investments are 100% passive investments to the accredited investors and they hand all control over to the sponsor managing the DST. Typically, the lifespan of a DST program is five to ten years, however can be liquidated sooner if the market and sponsor deem that the timing is optimal.

There are unique features associated with DST’s as they come in all shapes and sizes. Some are single dwellings and others are multiple buildings in multiple states. Some are all cash offerings and some come with high ratio of debt used when clients have higher Loan-to-Value (LTV) exchange needs.  Typically, offerings are commonly seen in the 50% LTV range. What’s unique about a DST is that if a seller needs to replace debt on an exchange the debt is held at the sponsor level, so the investor does not have to be underwritten nor does the debt show up on the credit of the investor yet the investor receives all of the potential benefits of the debt on the property while the debt remains non-recourse to the accredited investor.

DST’s may also be great backup ID’s for exchanges in their 45-day window in case one of their identified properties falls through, as well, they can work great for boot issues on an exchange.

As with all investments there are pros and cons and risks to any investment and one should consult with their Real Estate attorney, CPA and Registered Representative to see if a 1031 Exchange using a DST is the appropriate avenue to explore.

The acquisition or sale of a Delaware Statutory Trust (DST) for the purpose of a tax-deferred 1031 Exchange qualifies for treatment under section 1031 of the Internal Revenue Code (“1031 Exchange”). Investors will be able to sell the existing investment property or beneficial interest in a DST and complete a 1031 Exchange into another “like-kind” investment property or beneficial interest in a new DST.

There are risks associated with investing in Delaware Statutory Trust (DST) and real estate investment properties including, but not limited to, loss of entire principal, declining market value, tenant vacancies and illiquidity. DST 1031 properties are only available to accredited investors (generally described as having a net worth of over $1 million dollars exclusive of primary residence) and accredited entities only.

The information herein has been prepared for educational purposes only, is not a direct recommendation, does not constitute an offer to purchase or sell securitized real estate investments, and is not meant to be interpreted as tax or legal advice. Because investors situations and objectives vary this information is not intended to indicate suitability for any particular investor. Please speak with your legal and tax advisors for guidance regarding your particular situation.

Securities offered through Concorde Investment Services, LLC (CIS), member FINRA/SIPC. Advisory services offered through Concorde Asset Management, LLC (CAM), an SEC registered investment adviser. Insurance offered through Concorde Insurance Agency, Inc. (CIA) Fortitude Investment Group is independent of CIS, CAM and CIA, all of whom are independent of Inland


For more information, please contact:

Daniel Raupp

Jeffrey Kiesnoski

Fortitude Investment Group LLC
844-4DST1031 (844 437-8103)

Source: Fortitude Investment Group LLC