The reasons we believe the DST may work well in both §1031 and §1033 exchanges are:
- The investor moves from active real estate to passive real estate.
- There is asset protection potential under DST investments.
- Monthly potential income cash flow (potential to net 6%+ after expenses) with AAA-rated investment grade properties with long-term, triple-net leases with high-credit quality backed rent payments.
- No landlord hassles or unexpected cash outlays.
- Tenancy-in-common (TIC) and joint venture structures may be problematic since ownership and management decisions are shared. For example, if you are one of 14 tenancy-in-common real estate investors in a commercial property and all 14 investors want to sell except one, you cannot sell the property.
- DSTs can liquidate appoximately 5 to 10 years after completed equity raise. Well-funded endowments and/or othger qualified purchasers usually purchase DSTs after seasoning and stable rent performance.