After 40 years, I'm looking to get out of the rental game. I don't consider myself a pessimist, but looking at all the market and economic forces, although I think it will continue to be a money maker, I don't think it will ever be as good as the last 20 years have been. I manage my rentals and have good tenants. Unlike Robert J, I've never been to court for the rentals in 40 years.

I've always been thrifty and old habits don't change. I retired from what was a very lucrative engineering career and, as it turns out, the rentals were overkill...I don't need the money for me or the kids, and a lot of it will be going to charities. The kids aren't interested in the rentals and are doing very well on their own. Doing 1031's into commercial property doesn't appeal to me.

One option I hadn't heard of is DST's. I'm curious what people in the biz think about them. I'm skeptical.

My other option would be to just sell, pay all the tax and invest that money.

The properties are worth in the range of $600k to $700k each, so finding someone to carry a note for doesn't happen in my region very often.

There are articles, books and free seminars on DST and 1031 exchanges. Like property into like property. That does not mean SFR into SFR, but instead real estate (Land with a structure) for another type investment.

I've taken many Single Family homes INTO Units, Rentals into Strip Malls, property where people sleep over night to commercial office buildings.

But my favorite is residential income rentals into LAND WITH OIL DRILLING. For $100,000 you get 10 drills for oil wells. If two fail, then Noble gives you a producing well. So with 10 drillings you have a guaranty at 3 of 4 wells -- up to 10. Each one giving you 10-15% return on your investment. And you can 1031 out of it.

Tim - Congratulations !

Ya made it this far. I have no doubt you will

continue to make profitable decisions.

Welcome to the Sellers Club.

In an upward market, DST's are awesome Capital Preservation tools. Currently they are yielding only 3.8-5.9%. In a downward market place, you can get wiped out. Additionally, the DST sponsor will be telling you when the pull out time is so you will be doing another 1031 at their whim, not yours.

So DSTs have a spot in my holdings? Absolutely. I can use them to fill small voids left when you buy a replacement property in a 1031 but it isn't larger than the property that you are selling.

Are you asking about a Delaware Statutory Trust (DST) or a Deferred Sales Trust (DST)?

I have had great success with Delaware Statutory Trusts. The returns aren't as high as I would prefer but its 100% passive and I feel like as long as you vet out the sponsors they are safe. I've stuck to larger scale luxury housing projects with larger sponsors (Pasco, Cantor Fitzgerald, Carter Exchange, Capital Square, Inland and Blue Rock).

I had a large volume of less desirable properties that I thought were worth as much as they would ever be worth ($100K each). So I sold them to out of state investors, put the proceeds into a 1031 Exchange and reinvested into DST's.