delaware statutory trust
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delaware statutory trust (by Tom [MO]) Oct 16, 2020 12:02 PM
       delaware statutory trust (by Robert J [CA]) Oct 16, 2020 2:34 PM
       delaware statutory trust (by Ray-N-Pa [PA]) Oct 16, 2020 6:01 PM
       delaware statutory trust (by Jen [OH]) Oct 16, 2020 7:25 PM
       delaware statutory trust (by Tom [ME]) Oct 17, 2020 8:32 AM
       delaware statutory trust (by Ray-N-Pa [PA]) Oct 17, 2020 9:45 AM
       delaware statutory trust (by Tom [ME]) Oct 17, 2020 4:05 PM

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delaware statutory trust (by Tom [MO]) Posted on: Oct 16, 2020 12:02 PM

We are doing a 1031 tax exchange on most of our lower class C single family rental houses. After over 20 years in these neighborhoods we grew tired of the problems with these types of investments and thought it would be a good time to sell. Our intent is to replace them with class B type of houses or something similar. The other option would be a 1031 into a Delaware Stautory Trust Investment where the return might only be 5.5 percent. If we replace with Class B buildings in this market the return wouldn't be much better. Has anybody had any experience with the Delaware Statutory Trust Investments? Thanks in advance.

delaware statutory trust (by Robert J [CA]) Posted on: Oct 16, 2020 2:34 PM

These types of deals where investors pool their money and buy a large complex are at times risky. The sponsor is everything. Their track record and maintained ownership in one position is a must.

Unfortunately for the sponsor, this is a business transaction and all they want to do is make money. When I did the deep research on 1 of these investments this is what I found out.

The "sponsor" used an LLC and purchased a Hotel under a different name. The place lost the Sole Tenant who ran the Hotel and paid the owner rent. He sponsor got a temporary tenant, another of his LLC's, to run the place. Instead of it being empty and worthless, it was a going operation.

When the place was going to be empty he purchased it for 12 Million. Rented it to himself under another LLC and began fixing it up. A coat of paint, a few guests and then he found a real tenant to take over the management.

Once he had a signed lease he then purchased the Hotel again from himself to another LLC, but this time he paid himself 18 million dollars.

Then he advertised this as an Investment. He stated it cost 18 million, plus fee's. His finders fee, his put the deal together fee. His sales force to find investors making on top of that a commission. Final sales price sold in small lots, $21 million.

The guy make so much money pulling the wool over every one's eyes that he didn't care if this ever made anyone any money. It would take 10 years for the investors to break even and another 10 years to make some real money.

Then the sponsor sold out his position as retirement money investments at $25,000 per share, leaving him with no teeth in the game.

This was a bad deal.

One good deal, A long time sponsor purchased an apartment house in collage area. Managed it well and the investors tripled their money in 6 years. He got to from a company that was leaving the apartment market and wanted out...

delaware statutory trust (by Ray-N-Pa [PA]) Posted on: Oct 16, 2020 6:01 PM

There are dozens of companies for you to choose from and each has a dozen or more offerings going on at a single time.

I have seen returns run on apartments between 4.75 and 6% so your 5.5% sounds a bit more appealing. After you certify that you are a qualified investor, the OM will be emailed to you. In it they have to disclose the value of the asset that they are selling you. Study that carefully as they they maybe selling a $90,000,000 for shares equal to 100 million.

I have seen DST that specialize in storage units, hospitals, hotels, class A condos and class A multis along with malls.

Two weeks ago I did a $100,000 purchase of Oil Gas Mineral rights in a 1031 using a DST. I bought fractional ownership in some Chevron gas wells located in Fayette County in Western Pa.

I would not recommend a DST for strictly the growth aspect of it, but couple tax savings and with total hands off approach to passive income - and it looks pretty good after hearing so many folks complaining that they have someone who they want to boot out this year.

The OM will tell you when the holding company will selling - typically 5-12 years from your purchase date. At that time you will have to do anther 1031 exchange. The down side, you will have no save in how the investment is run.

delaware statutory trust (by Jen [OH]) Posted on: Oct 16, 2020 7:25 PM

Sounds like you're not enthusiastic about the five and a half percent return. I can understand that fully. Feel free to get in touch with me at mitmvs @ g mail . Com about a 22 unit portfolio in Northeast Ohio that would put that cap rate to shame.

Also the availability of property management to go with it so that you can enjoy the hands off aspect of investments.

delaware statutory trust (by Tom [ME]) Posted on: Oct 17, 2020 8:32 AM

Also look into upREIT.

delaware statutory trust (by Ray-N-Pa [PA]) Posted on: Oct 17, 2020 9:45 AM

You can't 1031 into a REIT though.

Taxes savings is why I doing 1031's. I don't like the idea of paying $380,000 of $650,000 to my Uncle who has not assisted me much lately in my business.

I am growing to dislike my silent partner (Uncle Sam) less and less lately

delaware statutory trust (by Tom [ME]) Posted on: Oct 17, 2020 4:05 PM



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