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Just because an investment is fundamentally sound or offers a positive return, doesn’t necessarily make it a good one. There’s an element of “fit” that must be considered any time a potential investment is evaluated. From time horizon to risk tolerance, return expectations, and income requirements, every investor has different needs, and the key to finding a good investment is to find one that meets most or all of those needs. For a certain segment of the investing public, an investment in a Delaware Statutory Trust has the potential to be a good fit and is worthy of consideration. What is a DST? A Delaware Statutory Trust is a “legally recognized entity that is set up for the purpose of conducting business. They are formed using a private trust agreement under which real property is held, managed, invested, administered, and/or operated for the purpose of profit.” Translated casually, a DST is a corporate entity, set up for the purpose of acquiring a specific real estate asset. Potential investors purchase shares in the entity, which entitle them to a proportionate share of the potential cash flow and profits produced by the underlying asset. Pros and Cons of Investing in a DST Like any investment, there are pros and cons to consider when evaluating a DST opportunity. On the positive side, DSTs provide individual investors with a passive investment opportunity in institutional quality assets that they wouldn’t otherwise be able to invest in. It’s passive because the properties are managed by institutional-quality property management with significant experience and a favorable track record. Additionally, DSTs are available in all asset classes, including some of the most popular ones like multifamily, industrial, and office and they can be used as a useful estate planning tool. Lastly, and maybe most importantly, DSTs can provide significant tax benefits when purchased in conjunction with a 1031 exchange . While the DST benefits are impressive, there are some downsides to consider. To start, DSTs are illiquid. They require a holding period of 5-10 years and the market can change significantly over that time. In addition, DST’s can’t raise new capital once they’re closed, which means that: (1) the properties require higher than usual reserves; and (2) an unexpectedly large capital expenditure like a new roof can erode years of profits. Further, DST investors have no say in property management decisions. They’re passive investors only and will almost certainly come out on the losing side of a dispute with the property manager. As these are just some of the cons to consider, investors should ensure they are familiar with all risks before investing. Between the pros and cons, there’s a lot to consider, which brings us back to the idea of “fit.” What Types of Investors are DST s a Good Fit For? Generally speaking, an investment in a DST may be a good fit for an individual that falls into one or more of the following categories: 1. Individuals seeking to be passively involved with their investment 2. Individuals looking for exposure to institutional quality assets with professional management 3. Individuals who have experienced a recent gain on the sale of an asset and are looking to defer the gain from taxes 4. Income investors with a 5-10 year time horizon Who are these individuals? For the most part, they may be, but are not limited to, business owners, successful investors, executives, doctors, lawyers, and accountants who tend to be a little bit older and established in their careers. Do You Think a DST Might be a Good Fit for You? I specialize in helping my clients identify and select real estate investments, including DSTs, that are suitable for their risk tolerance and time horizon. I’d like to invite you to set an appointment or to attend our next seminar. You can do so by calling me at 650-282-0477 or by sending an email to amit@get1031properties.com I look forward to hearing from you. This is for informational purposed only and does not constitute an offer to buy or sell any securitized real estate investments. There are risks associated with investing in Delaware Statutory Trust (DST) and real estate investment properties including, but not limited to, loss of entire principal, declining market value, tenant vacancies and illiquidity. Diversification does not guarantee profits or guarantee protection against losses. Potential cash flows/returns/appreciation are not guaranteed and could be lower than anticipated. DST 1031 properties are only available to accredited investors (typically have a $1 million net worth excluding primary residence or $200,000 income individually/$300,000 jointly of the last three years) and accredited entities only. If you are unsure if you are an accredited investor and/or an accredited entity please verify with your CPA and Attorney. Because investors situations and objectives vary this information is not intended to indicate suitability for any particular investor. This information is not meant to be interpreted as tax or legal advice. Please speak with your legal and tax advisers for guidance regarding your particular situation. Securities offered through Concorde Investment Services, LLC (CIS), member FINRA/SIPC.

Delaware Statutory Trusts: Who Should Invest? Just because an investment is fundamentally sound or offers a positive return, doesn’t necessarily make it a good one. There’s an element of “fit” that must be considered any time a potential investment is evaluated.