DST 1031 Exchange Services
Retiring from being a landlord is difficult and potentially expensive. To ease the transition, we offer no-load Delaware Statutory Trusts (DSTs). DST’s qualify for tax-free exchange under section 1031 and are available to accredited investors through broker dealers and registered investment advisors who are qualified to offer them.
Instead of paying the tax, consider a 1031 exchange into a professionally managed property where rid yourself of landlording duties but continue to enjoy the tax advantages of owning real estate. DST’s available through Encore Retirement Planning offer the following benefits over DSTs offered through broker dealer channels:
- No-Loads–When a traditional real estate security is purchased by the client of an RIA, any embedded commission is rebated back to the account in the form of additional interests or shares, depending upon the investment structure.For example, Encore Retirement Planning will not collect the 6% selling commission or the 1.25% dealer fee that are incorporated into a DST offering. Instead, the 6% selling commission and 1.25% dealer fee will be combined resulting in a “gross up” of the investment by a total of 7.25%. So, an investors initial investment amount of $100,000 would have $107,250 in equity on the closing statement.
Higher beginning values also translate into improved distribution rates too. A 5% annual distribution rate on a $100,000 investment becomes the equivalent of 5.36% because the 5% distribution is calculated on the “grossed up” $107,250 starting value instead of standard $100,000.
That large commission is replaced by a more reasonable due diligence/placement fee paid by the investor to Encore Retirement Planning directly according to the schedule below.
- Enhanced Estate Planning–Real estate is notoriously chunky which makes it difficult to pass smoothly to heirs. In a DST program, you purchase a % of a trust which can be further subdivided when it’s time to transfer those assets to heirs. Additionally, upon passing, your DST investment is eligible for a step-up in basis, just like a traditional property. That means less burden on those handling your estate, while retaining the benefits owning a captial asset.
What it costs
- 1% of the allocated equity; subject to a minimum fee of $5,000.
Buying a private placement without a fee typically means the financial professional is being paid a sizable commission which will impact the performance of your investment. Consider a no-load placement to enjoy higher distribution rates and improved returns over commissionable investment products.
Optional support is available for the duration of the investment program. These services include:
- Review of quarterly reports;
- Periodic on-site property inspections;
- Participation in investor calls/webinars with sponsor;
- Annual review of investment performance;
- Procurement of tax documents to investors and their tax professionals.
Support services are offered at a flat fee, initially set at 0.50% of the equity allocated to the 1031 exchange or alternative investment program(s). Support services are only available for clients who also utilize our investment management services.
If additional work is needed above and beyond the normal level of service, hourly charges may be assessed. In the event of early termination by the client, any fees for the hours worked will be due.
Get Started
Schedule a no-obligation call to discuss your options. Additionally, we offer a 1031 exchange analysis for $175 which will help you determine if a 1031 exchange is right for you.
This material is neither an offer to sell, nor the solicitation of an offer to buy any security in any program. Investors may only be presented with investment options that come available after a bonefide relationship is established with Encore Retirement Planning unless an a reccomendation is made by your qualified professional tax, legal, or real estate advisors. All offers will be made only by the Private Placement Memorandum (PPM). Any representation to the contrary is unlawful.