Are you thinking about selling your investment property? If so, a 1031 exchange might be an excellent option! This effective tool, also known as a “like-kind exchange,” allows investment property owners to defer a variety of taxes by reinvesting their funds into another piece of property.

Qualifying for this incredible wealth-building opportunity isn’t as difficult as you might think. Here’s what you need to know. 

What is a 1031 Exchange?

Section 1031 of the Internal Revenue Code provides the ability to exchange a business, income, or investment property for “like-kind” property. Doing so allows the property holder to defer federal and state capital gains taxes and the 3.8% Medicare tax. A 1031 exchange also defers the recapture of depreciation.

The primary benefit of a 1031 exchange is the ability to hold onto your buying power. Without it, a property sale would result in you paying a significant portion of your profits to the government. This would leave you with less money to purchase a new investment. By taking advantage of a 1031 exchange, you’re able to keep all of your money working for you.

Eligibility Requirements

If you currently own business property or a piece of real estate held for income or investment, you likely qualify for a 1031 exchange. This opportunity is open to individuals, S-corporations, C-corporations, LLCs, trusts, general partners, limited partners, and any other tax-paying entity.

The primary requirements for qualifying are that (1) you have a qualifying property, and (2) you meet the time restrictions.

When you sell your property, you’ll have 45 calendar days from the closing date to identify your replacement property. You also only have 180 calendar days from the date of your first property closing to close on the replacement property. In addition, you must use a “qualified intermediary” to oversee the transaction and ensure all 1031 exchange requirements are met.

Like-Kind Property

Finding a “like-kind” property may seem intimidating. However, it’s not as complicated as you might think. As long as the new property is located in the United States and it’s used in business or held as an investment or income-producing property, it’s considered a “like-kind” property.

No matter what kind of investment, income, or business property you currently hold, you’re able to exchange it for a variety of different properties. This may include a vacant lot, apartment building, commercial building, or even a single-family residence (as long as it’s not your primary residence or second home).

In some cases, a vacation home may qualify for a 1031 exchange. However, you must show that you have “limited personal use” of the property. This means that the property owner or the owner’s family must not personally use the property for more than 15 days per year or 10% of the number of days during the year that the property is rented at the fair market value.

Personal property, like gold coins, aircraft, computers, and equipment, may also qualify for a 1031 exchange. However, the rules regarding these exchanges are much more specific. If you’re considering engaging in any kind of a 1031 exchange, it’s a good idea to consult with a tax professional before you get started.

Delaware Statutory Trust

While finding a “like-kind” property isn’t necessarily difficult, many property holders are selling their real estate holdings because they no longer want to deal with the hassles of managing physical property. The good news is, you can qualify for a 1031 exchange without the ongoing effort of managing a replacement property.

A Delaware Statutory Trust (DST) is an investment vehicle that serves as a like-kind investment property. It allows accredited investors to continue owning real estate property and enjoy the benefits of a 1031 exchange, without the headaches that come with property management.

To learn more about how to qualify for a 1031 exchange and explore whether a DST is appropriate for you, send us a message or give us a call at 415-991-1031. Remember, you only have 45 days from the sale of your property to find a replacement property, so don’t delay! 

This is for informational purposes only, does not constitute as individual investment advice, and should not be relied upon as tax or legal advice. Please consult the appropriate professional regarding your individual circumstance. Because investors’ situations and objectives vary this information is not intended to indicate suitability for any particular investor. 

 DST 1031 properties are only available to accredited investors (typically have a $1 million net worth excluding primary residence or $200,000 income individually/$300,000 jointly of the last three years) and accredited entities only.  If you are unsure if you are an accredited investor and/or an accredited entity please verify with your CPA and Attorney. 

There are material risks associated with investing in DST properties and real estate securities including liquidity, tenant vacancies, general market conditions and competition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial and multifamily properties, short term leases associated with multi-family properties, financing risks, potential adverse tax consequences, general economic risks, development risks, long hold periods, and potential loss of the entire investment principal.

Potential cash flows/returns/appreciation are not guaranteed and could be lower than anticipated. Diversification does not guarantee a profit or protect against a loss in a declining market. It is a method used to help manage investment risk.

Securities offered through Concorde Investment Services, Inc. (CIS), member FINRA/SIPC. Insurance offered through Concorde Insurance Agency, Inc. (CIA) Halston Pacific is independent of CIS and CIA.

 

It’s no secret that some investment options are confusing. While doing your research, you may come across terms you’re not familiar with. For example, many real estate investments are open to “accredited investors” only. What does this mean, and how does it apply to 1031 exchanges? The following guide will tell you everything you need to know.

What is an Accredited Investor?

The term “accredited investor” was created by the Securities and Exchange Commission (SEC) to describe a certain type of sophisticated investor. It’s defined under Rule 501 of Regulation D in the Securities Act of 1933.

To qualify as an accredited investor, you must meet the following requirements:

1. Earn an annual income of at least $200,000 (individual) or $300,000 (joint) in the past two years. 

2. Have a net worth of more than $1 million (excluding the value of your primary residence), either individually or with your spouse.

You must also reasonably expect to maintain the same levels of income in the future. Due to their financial success and presumed experience, accredited investors are considered sophisticated. It’s assumed that they have enough experience to understand complex investment vehicles.  

Rule 501 also defines accredited investor status for organizations. This includes trusts, companies, and other entities.

Why Are Some Investments Restricted to Accredited Investors? 

Under normal circumstances, investment securities must go through a registration process before they’re offered to the public. This is intended to protect investors from getting involved in securities that are fraudulent, overly-complex, or illiquid. However, the registration process can create a financial burden for investment companies. For this reason, there are many exceptions that allow issuers to avoid registration.

If a company wants to avoid having to register its offerings, they often must agree to limit their sales to accredited investors only. The SEC assumes that individuals who have reached accredited investor status are capable of thoroughly evaluating an investment offer. This includes determining the merits of the investment and evaluating its potential risks. Only after this evaluation is done can someone truly determine whether an investment is an appropriate choice for their needs. In the event that an accredited investor makes a poor decision, it’s also assumed that they have the means to overcome the negative financial impact.

Unregistered private investments are often complex, have the potential for significant losses, and may not be fully liquid. By limiting the sales of these securities to accredited investors, the SEC is attempting to prevent inexperienced investors from getting in over their heads.

Do You Need to Be an Accredited Investor to Do a 1031 Exchange?

A 1031 exchange is a transaction that allows investors to defer capital gains on the sale of investment property. To qualify for this tax benefit, you must exchange your current property for a “like-kind” property (or properties) of equal or greater value. 

While investors must follow IRS rules to qualify for this favorable tax treatment, they are not required to be an “accredited investor.”

However, if investors use the  Delaware Statutory Trust (DST)  structure for1031 exchange using a Delaware Statutory Trust (DST), that is a different story. 

Because DSTs are considered “securitized investments” by by the SEC, the accredited investor requirement kicks in. DSTs allow multiple investors to own fractional interest in a single property or a portfolio of properties. Like other unregistered investments, DSTs can be complex and are considered illiquid investments.. So, while you don’t have to be an accredited investor to engage in a 1031 exchange, you do if you plan to do it using a DST.

Learn More About 1031 Exchanges

A 1031 exchange offers many advantages for both accredited and non-accredited investors. This includes investment diversification, tax deferral, and the potential for increased cash flow. However, while the concept isn’t complex, the execution can be.

If you’re interested in taking advantage of a 1031 exchange, we can help. Contact us today to discuss your goals and learn how to get started.

We encourage you to find additional insights in our eBook, Top 11 Misconceptions About 1031 Exchanges, which you can download for free HERE. 

This is for informational purposes only, does not constitute as individual investment advice, and should not be relied upon as tax or legal advice. Please consult the appropriate professional regarding your individual circumstance. Because investors’ situations and objectives vary this information is not intended to indicate suitability for any particular investor. 

 DST 1031 properties are only available to accredited investors (typically have a $1 million net worth excluding primary residence or $200,000 income individually/$300,000 jointly of the last three years) and accredited entities only.  If you are unsure if you are an accredited investor and/or an accredited entity please verify with your CPA and Attorney. 

There are material risks associated with investing in DST properties and real estate securities including liquidity, tenant vacancies, general market conditions and competition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial and multifamily properties, short term leases associated with multi-family properties, financing risks, potential adverse tax consequences, general economic risks, development risks, long hold periods, and potential loss of the entire investment principal.

Potential cash flows/returns/appreciation are not guaranteed and could be lower than anticipated. Diversification does not guarantee a profit or protect against a loss in a declining market. It is a method used to help manage investment risk.

Securities offered through Concorde Investment Services, Inc. (CIS), member FINRA/SIPC. Insurance offered through Concorde Insurance Agency, Inc. (CIA) Halston Pacific is independent of CIS and CIA.

If you’re thinking about selling an investment property, a 1031 exchange could potentially save you thousands of dollars in taxes. Savvy investors often use this strategy to defer capital gains and build wealth. While it’s not difficult to perform a 1031 exchange, there are many moving parts. This makes it critical to ensure you have a solid understanding of the basic rules and requirements before getting started. 

What is a 1031 Exchange?

Section 1031 of the IRS Tax Code allows investors to defer capital gains taxes on a property sale by reinvesting the proceeds of the sale into another “like-kind” property. This transaction is known as a 1031 exchange or a “like-kind exchange.”

Since you’re not paying taxes on the proceeds from your property sale, you’re able to keep more of your money working for you. This gives you the potential to continue growing your real estate investment portfolio at an accelerated rate. 

Qualified Intermediaries

The simplest way to complete a 1031 exchange is for two individuals to swap properties. However, it’s unlikely that you’ll find someone who has a property you want and who also wants the property you have. Therefore, most 1031 exchanges are “delayed exchanges.”

As part of the 1031 exchange rules, the IRS requires that the property owner never takes possession of the sale proceeds. Since the property sale and purchase don’t take place simultaneously, a delayed 1031 exchange requires the assistance of a third party, known as a “qualified intermediary.” 

After you sell the first piece of property, the qualified intermediary holds the proceeds until you find a replacement. When you do, they use the funds to purchase the replacement property for you. When choosing your qualified intermediary, it’s important to note that this party cannot have any other formal relationship with either the property buyer or the seller.

The 1031 Exchange Timeline

When engaging in a delayed 1031 exchange, timing is critical. To ensure favorable tax treatment, you must comply with both the “45-Day Rule” and the “180-Day Rule.”

The 45-Day Rule

The 45-day rule states that you must find a replacement property within 45 days of selling the original property. You must also provide information about the property to your qualified intermediary before the end of the 45-day period. You can designate up to three properties, and in some cases, you may be able to designate more. However, to complete the 1031 exchange, you must ultimately close on one of the properties you’ve designated. 

The 180-Day Rule

While you only have 45-days to find a “like-kind” property, you have a total of 180 days from the sale of the first property to close on your replacement property.

It’s important to note that the 45-Day Rule and the 180-Day Rule run concurrently. In other words, if you take the full 45 days to find your replacement property, you will only have 135 days from that time to close on it.

Eligible Properties

While the 1031 exchange rules require the purchase of a “like-kind” property, there’s actually quite a bit of flexibility. The term “like-kind” refers to the character or nature of a piece of property, not the quality or grade. For this reason, all real property in the United States is considered “like-kind” to other pieces of real property in the U.S.

• Some examples of the properties you can exchange include:
• Farmland for a commercial building
• Multi-unit apartment building for a rental condo
• Industrial property for retail rental
• Commercial property for residential property
• Raw land for improved real estate
• Oil and gas royalties for a ranch

In addition to being “like-kind,” IRS rules state that both the relinquished and the replacement property must be held by the exchanger for investment purposes or for productive use in a business or a trade. A property that is held primarily for sale would not qualify for favorable tax treatment under section 1031.

1031 Exchange Benefits

Deferring capital gains taxes is the number one advantage of a 1031 exchange. Deferring taxes allows you to take advantage of a compounding effect, which can potentially accelerate portfolio growth. While this is the most obvious advantage, there are other important benefits you may recognize when completing a 1031 exchange.

Ability to Exchange Out of Undesirable Assets

Completing a 1031 exchange gives investors the option to exchange underperforming or undesirable real estate assets for a more appealing piece of real estate. Property owners who want to move away from time-consuming active management also have the option of using an investment vehicle known as a Delaware Statutory Trust (DST) in lieu of purchasing another piece of real property. The flexibility to choose from a wide variety of replacement assets is an important advantage for many investors.

Greater Diversification

The ability to easily switch from one type of property to another also provides the potential for additional diversification. For example, an investor holding a single managed property can complete a 1031 exchange into a variety of passive investments. This allows them to reclaim the time they were spending on property management and spread risk across several different markets.

Ability to Build Equity Over Time

There’s no limit to the number of times you can complete a 1031 exchange, so it’s possible to continually roll your real estate gains over from one investment property to the next. Each time you trade up, you have the chance to build more equity. An investor who starts out with one single-family rental property can use a 1031 exchange to upgrade to a duplex, then a fourplex, and so on. Using this strategy is an excellent way to build a large portfolio of real estate assets.

If you continue exchanging properties for long enough, when you ultimately sell, you’re also likely to be taxed at the long-term capital gains rate. This will result in additional tax savings. 

Additional Exit Flexibility

By exchanging a single investment property for multiple smaller properties, investors can take advantage of the ability to sell portions of their real estate portfolio over time instead of all at once. This creates additional flexibility and freedom.

Potential Risks to Consider

While a 1031 exchange offers many potential benefits, it’s also important to consider the possible drawbacks. Failing to keep the following risks in mind can result in a transaction losing its qualification as a 1031 exchange. This will likely lead to a large tax liability.

Tight Timelines

The IRS very rarely allows for extensions of the 45-day and 180-day rules. Investors who fail to meet these deadlines will lose their opportunity to enjoy the benefits of a 1031 exchange. If you’re not confident you’ll be able to locate a replacement property within 45 days and close within 180 days, then a 1031 exchange is not your best option.

Difficulty Finding “Like-Kind” Properties

While investors have a lot of flexibility in choosing replacement properties, the tight timeline may make it difficult to find one that’s suitable. It’s important that your replacement property meets your long-term investment goals.  The last thing you want to do is settle for an undesirable property or one that will give you subpar performance because you’re scrambling to meet the required deadlines. 

Taxation on “Boot”

To get the full advantage of a 1031 exchange, you’ll want to purchase a replacement property that costs the same amount or more than the relinquished property. If there’s money left over after the exchange is complete, the qualified intermediary will pay it back to you. This cash is called “boot” and it is taxed as capital gains.
Investors also sometimes forget to consider loans they’ve taken out on the property. If you don’t get cash back but your new mortgage is lower than the mortgage on the relinquished property, this is another form of boot. It’s taxed the same as if you had received cash. If you do this, you’ll need to make sure you have enough liquidity to pay your tax liability. 

Reduced Tax Basis

A 1031 exchange reduces the replacement property’s tax basis by the amount of the deferred gain. This means that when you ultimately sell the property without doing an exchange you’ll have to pay taxes on the gains you had previously deferred. 

Future Uncertainty

While deferring taxes sounds appealing, it’s important to remember that the future is uncertain. There’s a chance that capital gains tax rates could be significantly higher when you ultimately sell your property. Many investors are comfortable taking this risk, but it’s still important to consider.

Conclusion

We hope you’ve found this guide helpful. Now that you know all the basics of a 1031 exchange, you’re in a better position to decide whether it’s the right strategy for you. As long as you’re comfortable with the potential risks, there are many benefits and opportunities associated with a 1031 exchange.

It’s important to note that the information in this material is not intended as tax or legal advice. Before you make your final decision, it’s important to discuss your property exchange strategy with both a financial advisor and a tax professional. 

We encourage you to find additional insights in our eBook, Top 11 Misconceptions About 1031 Exchanges, which you can download for free HERE. 

This is for informational purposes only, does not constitute as individual investment advice, and should not be relied upon as tax or legal advice. Please consult the appropriate professional regarding your individual circumstance. Because investors’ situations and objectives vary this information is not intended to indicate suitability for any particular investor. 

 DST 1031 properties are only available to accredited investors (typically have a $1 million net worth excluding primary residence or $200,000 income individually/$300,000 jointly of the last three years) and accredited entities only.  If you are unsure if you are an accredited investor and/or an accredited entity please verify with your CPA and Attorney. 

There are material risks associated with investing in DST properties and real estate securities including liquidity, tenant vacancies, general market conditions and competition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial and multifamily properties, short term leases associated with multi-family properties, financing risks, potential adverse tax consequences, general economic risks, development risks, long hold periods, and potential loss of the entire investment principal.

Potential cash flows/returns/appreciation are not guaranteed and could be lower than anticipated. Diversification does not guarantee a profit or protect against a loss in a declining market. It is a method used to help manage investment risk.

Securities offered through Concorde Investment Services, Inc. (CIS), member FINRA/SIPC. Insurance offered through Concorde Insurance Agency, Inc. (CIA) Halston Pacific is independent of CIS and CIA.

I was recently introduced to a wonderful couple by Ron, a Qualified Intermediary colleague who knew I would be able to help them with their 1031 exchange which was valued at approximately $3 million. Ron said, “Herb, you are going to love these folks. Their parent bought investment property years and ago and built up a nice nest egg for retirement. The income from these properties help them put their children through school and get them started on the careers, debt free. They really did it the right way!”

I followed up with them right away and was intrigued by their backgrounds and history. Esteban Ramirez and his wife Monica Yee both came from immigrant families to the US.  Esteban was born in Indiana after his parents immigrated to the US from Mexico and Monica was a naturalized citizen from China.  Her mother and father came to the US to study at Stanford and UC Berkeley, respectively when she was two years old.  Esteban and Monica met in college at UCLA.

Both sets of  parents had invested in real estate and Monica had been managing her father’s real estate since he passed in 2009.  When I spoke to Esteban and Monica, I learned that their children were in college and one had married in 2017 and just had their first child. Esteban and Monica wanted to slow their lives down a bit and spend more quality time with their grandchild. They had been prodding their other children to move-it-along as they told me . . . meaning get married and give us more grandchildren!

The Ramirez’s had recently sold two investment properties around $2.89M, were in escrow to buy one rental at $700K and wanted to place the balance of the proceeds into a variety of Delaware Statutory Trust (DST) investments. DSTs, as you have heard me mention before, are a popular option for 1031 exchangers because they are passive investment which allow investors to rid themselves of the hassles of property management.  Ron, their QI, had told them of the DST option, and after my conversation and several ZOOM calls with several sponsors, they realized that this was the right approach for them.

As I was doing my discovery work with the sponsors, I received a statement from the QI in the amount of $1,418,000. Knowing the value of investment properties they sold, the numbers clearly did not add up.  When I asked Esteban and Monica about the discrepancy, they mentioned there was a small $200,000 loan on one of the properties and at the close of escrow they decided to immediately receive $572,000 to that off along with some other expenses.   Unfortunately, they did not realize the full ramifications of this decision.  I think it was my silence and slightly audible groan.  Receiving $572,000 as cash did not put the full 1031 exchange in jeopardy, but it had now become a partial 1031 exchange and the $572,000 was subject to capital gains taxes.  “Did we screw something up?,” he asked me.

I explained to them the reason why ALL proceeds from a property sale in a 1031 Exchange must be immediately received by the QI at the time of closing the sale. The seller can never take receipt of the funds or the 1031 exchange rules will have been violated.  In the case of Esteban and Monica, their QI did explain this to them, but they did not contact their CPA or Tax Attorney prior to closing the sale which they were advised to do. As it turns out Esteban and Monica were not ignoring their QIs advice. Esteban’s mother had been having some health problems, and among other things, they simply got too busy.

This is why I stress how important it is to to bring all the important players together – your CPA, Tax professional, Financial Advisor and Qualified Intermediary at the very early stage of your 1031 exchange. These are the professionals that will help keep you on track and help ensure your exchange is successful. If Monica and Esteban had put their team together early in the sale process, they possibly could have saved over $150,000 in taxes.

Although, disappointed, they kept a positive attitude.  Esteban assured me emphatically, “We will not take a single step on the sale of our other properties before talking to you and our CPA!”

We trust this discussion has been helpful, and we encourage you to find additional insights in our eBook, Top 11 Misconceptions About 1031 Exchanges, which you can download for free HERE. 

This is for informational purposes only, does not constitute as individual investment advice, and should not be relied upon as tax or legal advice. Please consult the appropriate professional regarding your individual circumstance. Because investors’ situations and objectives vary this information is not intended to indicate suitability for any particular investor. 

 DST 1031 properties are only available to accredited investors (typically have a $1 million net worth excluding primary residence or $200,000 income individually/$300,000 jointly of the last three years) and accredited entities only.  If you are unsure if you are an accredited investor and/or an accredited entity please verify with your CPA and Attorney. 

There are material risks associated with investing in DST properties and real estate securities including liquidity, tenant vacancies, general market conditions and competition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial and multifamily properties, short term leases associated with multi-family properties, financing risks, potential adverse tax consequences, general economic risks, development risks, long hold periods, and potential loss of the entire investment principal.

Potential cash flows/returns/appreciation are not guaranteed and could be lower than anticipated. Diversification does not guarantee a profit or protect against a loss in a declining market. It is a method used to help manage investment risk.

Securities offered through Concorde Investment Services, Inc. (CIS), member FINRA/SIPC. Insurance offered through Concorde Insurance Agency, Inc. (CIA) Halston Pacific is independent of CIS and CIA.

I have had the good fortune to work with many clients who purchase real estate investment property as a strategic part of their overall financial plans. As both a licensed investment professional and experienced real estate broker, I believe owning income-producing real estate is an excellent strategy for clients seeking broader portfolio diversification beyond just stocks and bonds and alternative sources of income potential.

Surprisingly, however, when introduced to the concept of the 1031 exchange as a tax efficient approach to selling and purchasing investment property, many eschew this approach, believing it is too complicated or only designed for big corporate investors. Neither view is entirely accurate.

Too Complex?

Internal Revenue Code Section 1031 enables investment property owners to sell investment property and defer paying taxes if the proceeds from the sale are reinvested in a like-kind replacement property of equal or greater value within certain timelines. If you were a first-time investor and just read that sentence, several questions might immediately come to mind:

• What is a like-kind property?
• What are the timelines?
• What taxes are deferred?
• What constitutes investment property?

Subsequently, without you knowing the answers to these questions, you might simply assume the 1031 exchange is too complicated for you. But it need not be. While the rules governing 1031 exchanges are well-defined and must be strictly adhered to, a good Qualified Intermediary (QI) can help guide you so that your exchange goes smoothly. The QI plays a vital role in the exchange process and works closely with your tax and legal advisors and your investment professional to help ensure all the boxes are getting checked off properly and in accordance with the rules.

Not for Me?

Are 1031 exchanges only used by big wealthy investors, corporations, or partnerships? In a word, no. The generous tax advantages of the IRC Section 1031 code apply to anyone owning investment property that has a gain or appreciated value (market value greater than its adjusted basis). That means large institutional investors who own and sell commercial office buildings or retail centers, as well as small mom and pop’s who own a single rental property, are enjoying the benefits of 1031 exchanges. 

And according to a recent commentary in Realtor Magazine by  Shannon McGahn, National Association of Realtors SVP of government affairs: 

“Only 5% of exchanged properties are held by corporations, with the majority owned by mom-and-pop investors.¹”

Further evidence confirming the popularity of 1031 exchanges among individual investors is the fact that use of the Delaware Statutory Trust (DST) structure, which conforms to 1031 exchange rules, continues to grow in volume every year. ²

One reason for that growth can be attributed to the fact that a DST is a passive investment structure, and many investors who have tired of the daily maintenance and management hassles of ownership, are flocking to DSTs, which have already purchased properties and have management teams in place who are responsible for those duties.

According to recent data from Mountain Dell Consulting, this securitized part of the 1031 exchange industry (of which DST’s represent 93% of the volume) raised nearly $3.5 billion in 2019, the second highest yearly volume on record.² That is a strong indicator that the 1031 exchange business is healthy, demand is growing, and that these tax-advantaged structures are not just for the big guys! 

We trust this discussion has been helpful, and we encourage you to find additional insights in our eBook, Top 11 Misconceptions About 1031 Exchanges, which you can download for free HERE. 

¹ https://magazine.realtor/news-and-commentary/commentary/article/2020/07/commercial-real-estate-needs-help-stabilizing  

² https://thediwire.com/1031-exchange-programs-raise-3-5-billion-in-2019/ 

This is for informational purposes only, does not constitute as individual investment advice, and should not be relied upon as tax or legal advice. Please consult the appropriate professional regarding your individual circumstance. Because investors’ situations and objectives vary this information is not intended to indicate suitability for any particular investor. 

 DST 1031 properties are only available to accredited investors (typically have a $1 million net worth excluding primary residence or $200,000 income individually/$300,000 jointly of the last three years) and accredited entities only.  If you are unsure if you are an accredited investor and/or an accredited entity please verify with your CPA and Attorney. 

There are material risks associated with investing in DST properties and real estate securities including liquidity, tenant vacancies, general market conditions and competition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial and multifamily properties, short term leases associated with multi-family properties, financing risks, potential adverse tax consequences, general economic risks, development risks, long hold periods, and potential loss of the entire investment principal.

Potential cash flows/returns/appreciation are not guaranteed and could be lower than anticipated. Diversification does not guarantee a profit or protect against a loss in a declining market. It is a method used to help manage investment risk.

Securities offered through Concorde Investment Services, Inc. (CIS), member FINRA/SIPC. Insurance offered through Concorde Insurance Agency, Inc. (CIA) Halston Pacific is independent of CIS and CIA.