Delaware Statutory Trusts (DSTs) have emerged as a preferred solution for 1031 Exchange investors seeking passive management, potential diversification, and access to larger properties that would otherwise be outside an investor’s price point. In addition, DSTs streamline the 1031 exchange process by providing prepackaged properties that are eligible for full tax deferral pursuant to the Internal Revenue Code Section 2004-86 and that often come with long-term non-recourse financing locked-in place for debt replacement purposes of the 1031 exchanges strategy.
However, there are many investors who are not sure how to find a real estate investment firm that specializes in DST investments, and what they should be looking for when they are researching DST firms.
Therefore, this article was written to help investors identify critical points when selecting a DST investment firm to assist them with their 1031 Exchange and explain why Kay Properties is often considered the preferred choice for 1031 Exchange DST investors.
How Did Kay Properties Emerge as a Leading Investment Firm in the DST Industry
As the Delaware Statutory Trust investment option gained traction among accredited investors, Kay Properties quickly emerged as a leading expert in the DST industry and often chosen by investors as the best Delaware Statutory Trust company in the nation.
In fact, the Kay Properties story began nearly two decades ago when founder Dwight Kay started personally investing in Delaware Statutory Trust properties. The Delaware Statutory Trust structure was relatively new and still being discovered by investors as a 1031 exchange option, and Dwight recognized quickly that investors needed help understanding the DST landscape. He quickly recognized that what was needed was a true specialist in the DST arena.
Back then, the landscape was barren for DST specialists, with only a handful of firms dabbling in DSTs alongside their management of stocks, mutual funds, and life insurance, handling only a couple of DSTs each year.
Dwight recognized right away that this was what he wanted to specialize in and started Kay Properties & Investments. Specifically, he believes investors searching for the best Delaware Statutory Trust company should consider at least three important points.
Point Number One:
Does the DST Firm Have a Robust Educational Library for DST Investors?
One of the areas Dwight immediately started developing as he formed Kay Properties & Investments as a DST specialty firm was to create one of the most robust educational platforms in the nation for 1031 exchange investors. Spending hundreds and hundreds of hours over the years, Dwight developed a library of educational information that included some of the following:
- Authoring (considered the first book ever written) on Delaware Statutory Trusts for 1031 exchange investors, which nearly 32,000 investors have read.
- Producing weekly conference calls that discuss various subjects surrounding the nuances and strategies of Delaware Statutory Trust properties.
- Hosting regular conferences and workshops for 1031 exchange Delaware Statutory Trust investors.
- Publishing a magazine chock-full of case studies, informative articles on DST strategies, and award-winning thought pieces describing sophisticated DST 1031 exchange topics.
Over many years of specialization and focus, Dwight and Kay Properties & Investments became recognized as one of the most sought-after DST real estate investment firms in the nation dedicated to professionalism, integrity, and hyper-focus on customized client investment strategies.
To this day, Dwight continues to write articles, record online presentations, and present live, in-person events to educate investors on such subjects as 1031 Exchanges, Delaware Statutory Trusts, and 721 Exchange UPREITs.
Point Number Two:
Does the DST Firm Have a Convenient Online Marketplace Where Investors Can See 20-30 1031 Exchange Eligible Properties from More than 25 Different DST Sponsor Firms?
Another area that really defines Kay Properties as an expert Delaware Statutory Trust specialist firm is the firm’s proprietary online marketplace for 1031 exchange and direct cash investors. This marketplace, created by Dwight many years ago, allows investors to explore a wide variety of 1031 exchange investment offerings across a multitude of asset classes and geographic locations.
For example, the Kay Properties DST 1031 exchange marketplace platform offers investors access to typically 20-40 DST offerings from over 25 different real estate sponsor companies. Within the marketplace, investors can review offering documents, business plans, research and analysis materials, and the risk factors of each 1031 investment. If you think this type of resource is only applicable to massive real estate investment firms, you would be wrong. Actually, when Dwight developed the www.kpi1031.com marketplace, he specifically designed it to appeal to investors of all sizes. While it is true that Kay Properties works with very large real estate investment firms that have placed from $10 to $100 millions of 1031 equity in Delaware Statutory Trust properties, it is also true that Kay Properties also works with many smaller “mom and pop” investors who have amassed sizeable real estate portfolios over the past couple of decades, and now want to move into a passive management structure with the potential for monthly distributions.
This very unique digital marketplace allows investors to both save money and expedite their 1031 exchange research because the kpi1031.com marketplace puts everything right into the hands of potential investors. By contrast, if an investor were to go out and independently purchase a piece of 1031 exchange eligible real estate, they very likely would have to spend thousands of dollars on legal fees and research reports (property condition reports, appraisals, environmental reports, surveys, zoning reports, etc.) to confirm no significant issues with the property. These research reports can take weeks to complete and can be very costly in both time and money.
The Kay Properties marketplace presents this information to accredited investors at no cost, providing investors an incredibly valuable resource for their 1031 exchange research needs. The amount of information investors can access in one place is astounding and creates an industry-leading resource for investors.
Point Number Three:
Does Your DST Firm Approach Your Investments with a Conservative, Risk-Averse Investing Philosophy?
Throughout his entire investment leadership career, Dwight Kay has recognized the importance of risk mitigation as a purposeful strategy aimed at protecting investors’ principal.
One of the ways he helps investors reduce potential risk is by sharing his deep knowledge of the DST sponsor universe with them. After personally investing in nearly 100 different Delaware Statutory Trust properties, Dwight has amassed valuable insights into these DST sponsor companies’ track records, including what they’re good at and what they’re not so good at. He takes pride in sharing his opinions and insights on these sponsor firms based on decades of experience personally investing with them. Although past performance does not guarantee future results, it is something that investors are encouraged to consider when thinking about investing in DST 1031 investments.
Another strategy that Dwight and Kay Properties emphasizes is the use of all-cash or debt-free Delaware Statutory Trust (DST) investments. By investing in debt-free DST properties, investors can potentially avoid some of the dangerous pitfalls and risks associated with leverage, including:
- Protection from lender foreclosure
- The avoidance of refinancing risks
- No lender cash flow sweep provisions
- No cross-collateralized loan risks
- No balloon mortgage maturity risks
- No exit loan costs or fees owed to the lender
For many investors, being and staying debt free when investing in DST properties makes the most sense, and the www.kpi1031.com marketplace has many debt free DST investments from numerous DST sponsor firms. For other investors that need to replace debt in their 1031 exchange, viewing a wide selection of DST investments with Loan to Values (LTVs) of between 30-85% is a way for them to choose the leveraged DST investments that make the most sense for them – all which can be done at the www.kpi1031.com platform.
In Summary:
As the economy evolves, so too will the Delaware Statutory Trust (DST) landscape. New asset classes will emerge, more investors will discover 1031 exchanges, and the need for a trusted DST expert investment partner will remain critical. Kay Properties remains the definitive resource for investors navigating the evolving DST and 721 exchange UREIT market and will continue to emphasize the three points that have made the firm so successful: expert education, the kpi1031.com online marketplace, and the emphasis on risk averse investment strategies.
About Kay Properties and www.kpi1031.com:
Kay Properties helps investors choose 1031 exchange investments that help them focus on what they truly love in life, whether that be their children, grandkids, travel, hobbies, or other endeavors (NO MORE 3 T’s – Tenants, Toilets, and Trash!). We have helped 1031 exchange investors for nearly two decades exchange into over 9,100 – 1031 exchange investments. Please visit www.kpi1031.com for access to our team’s experience, educational library and our full 1031 exchange investment menu.
This material is not tax or legal advice. Please consult your CPA/attorney for guidance. Past performance does not guarantee or indicate the likelihood of future results. Diversification does not guarantee returns and does not protect against loss. Potential cash flow, potential returns and potential appreciation are not guaranteed. There is a risk of loss of the entire investment principal. Please read the Private Placement Memorandum (PPM) for the offerings business plan and risk factors before investing. Securities offered through FNEX Capital LLC member FINRA, SIPC.
