One of the most important considerations in evaluating 1031 Delaware Statutory Trust options is to first evaluate the experience and overall profile of the representative who will be assisting you to select the most suitable properties that meet your objectives.
I cover this important subject in greater detail in my well received book, Tax Deferral Strategies Utilizing the Delaware Statutory Trust (DST) and would like to summarize key highlights in this blog.
DSTs are securities and the process of acquiring DST interests is closely regulated by governmental officials and industry associations such as the Financial Industry Regulatory Authority (FINRA). Individuals who offer DST investments must have appropriate securities licenses and are subject to ongoing educational and disclosure requirements. Real estate brokers and agents are not allowed to offer DSTs to their clients unless they possess appropriate securities licenses and conform to related regulations.
Most DST sponsors market their offerings exclusivity though third-party securities broker-dealers and their licensed reps and do not directly sell DST offerings to investors. Therefore, in order to access the widest number of available DST offerings, interested investors will need to work with a licensed representative.
Evaluating and selecting suitable DSTs can be a complex process and require the assistance of a knowledgeable representative who can guide you through the voluminous due diligence materials and other related materials e.g., appraisal, environmental reports, local market studies, etc. that may be of interest to you. At any given time, there may be as many as 20 or more DST programs available with several thousands of pages of information to potentially review. Given the relatively short amount of time allowed in the 1031 exchange process, you will need a well-versed guide who is familiar with the pros and cons of current offerings, knows industry players, and has excellent real estate analytical skills.
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