The 1031 Exchange Institute

Welcome to The 1031 Exchange Institute™. The 1031 Exchange Institute is your complete online resource for 1031 exchange, 1033 exchange, 1034 exchange, 721 exchange, 453 installment sale and 121 exclusion information.  Information will also be provided regarding Self-Directed IRAs, including Traditional IRAs, ROTH IRAs, SEP-IRAs and SIMPLE IRAs. 

The 1031 Exchange Institute is dedicated to educating and informing real estate investors and their advisors on the benefits of 1031 tax-deferred exchanges and other tax deferred and tax exlcusion strategies so they can make better informed investment decisions.

Negative Aspects of the DST Investment

There are certainly many, many positive benefits from selecting and investing in a Delaware Statutory Trust, which are frequently referred to as just DSTs or DST investments.  However, there are also negative aspect with the Delaware Statutory Trusts or DST that a prospective investor should be aware of. 

The Delaware Statutory Trusts do not make suitable investment vehicles for all 1031 Exchange investors, so care should be taken when evaluating the DST investment property structure.  Here are just some of the potential negative aspects that investors should consider.

The fact that the Delaware Statutory Trusts or DSTs are pre-packaged with the Delaware Statutory Trust structure, property financing and property management operations already in place provides the DST investor with no say and little flexibility in the investment transaction.

No Property Management with a DST

The Delaware Statutory Trust or DST is not designed for a real estate investor that likes to roll up his or her sleeves and get their hands dirty (i.e. property management), so if you like to be deeply involved in the operations of the property the DST investment structure is probably not appropriate for you.

No Control Over the Property Management

DST investors have no control over the management of the investment property, so it is important that you also carefully do your due diligence not only on the property but also on the Delaware Statutory Trust Sponsor or Syndicator. 

DST investments are designed for a holding period of two (2) to ten (10) years.  Real estate investors receive their share of the proceeds when the property is sold.  A Delaware Statutory Trust or DST is not appropriate for any investor that wishes to temporarily "park" his or her 1031 Exchange money for a few years while waiting for another investment that might be more suitable.