There are articles written on the subject, alternative investments for landlords. In short, any managed investment in real estate can go south because of a shifting economy. The sponsors try to leverage the investment with only a few percentage points away from loosing money or going bankrupted. Here is one example of a common DST or TIC:
Sponsor finds a poorly performing asset, such as a large apartment complex, strip mall or offices. They buy it under a shame corporation. They tidy up the place and quickly get new tenants paying higher rents to justify a higher price.
They they sell the asset to themselves under their real Corporate name in the form of a DST or TIC. Now they look for investors.
The original purchase price was $10,000,000. Then after a quick face lift they DST buys it from themselves for $12,000,000.. They now get 10% of the income for being the Sponsor and managers of the asset. Their sales forces gets a 7-9% commission when they sell shares to each investors.
So it will take the next 4 to 5 years in appreciation just so if sold, you will break even with all of the load and costs. Now you have to hold the property for 10 years to make money. But wait, every 10 to 15 years we have a down cycle. So if the timing isn't right, you will loose everything, or at best, hold it for a total of 20 years to get your money out of it.
Real Estate now is way over priced. Any DST or TIC is bound to have issues unless the Sponsor is a saint and good at what they do....The cream of the crop, or only 20% of them out there will give you a fair shake.... --47.156.xx.xx