DST 1031 Exchange Example Case Study: Diversification Matters

By: Betty Friant, Senior Vice President

Recently a 1031 Exchange client, who was already working with another registered representative on his Exchange, reached out to Kay Properties to receive a second opinion on his 1031 exchange DST selection. This client had started to invest the entire amount from the sale of his property into one single DST. After discussing with his wife how at Kay Properties we believe diversifying* among multiple DST offerings and sponsors to be important, she suggested that diversification would make sense for them. As a result, we reviewed diversifying across many variables:

  • Geographic location to potentially lower the risk of concentration of any particular area of the country having economic problems, weather and climate issues, etc.
  • Asset classes such as multifamily, medical office, single tenant net lease retail, industrial, etc.
  • Tenants so that the leases were the obligation of multiple companies across multiple industries.

In the end, this client decided to diversify into multiple DST properties, as he and his wife were just not comfortable with the advice from the other registered representative and the concentration risk that a single DST property may pose.

But taking the time to really listen to the needs of the clients, we at Kay Properties try to understand what is important for each individual’s situation and then to respond to the client by focusing on what is important to them and to ultimately help our clients move in the direction that is right for them. We don’t just sell to our clients. We listen. We understand. We advise.

About Kay Properties and www.kpi1031.com

Kay Properties is a national Delaware Statutory Trust (DST) investment firm. The www.kpi1031.com platform provides access to the marketplace of typically 20-40 DSTs from over 25 different DST sponsor companies, custom DSTs only available to Kay clients and a DST secondary market. Kay Properties team members collectively have over 400 years of real estate experience, are licensed in all 50 states, and have participated in over 30 Billion of DST 1031 investments.

Diversification does not guarantee profits or protect against losses. All real estate investments provide no guarantees for cash flow, distributions or appreciation as well as could result in a full loss of invested principal. Please read the entire Private Placement Memorandum (PPM) prior to making an investment. This case study may not be representative of the outcome of past or future offerings. Please speak with your attorney and CPA before considering an investment.

There is a risk of loss of the entire investment principal. Past performance is not a guarantee of future results. Potential distributions, potential returns and potential appreciation are not guaranteed. For an investor to qualify for any type of investment, there are both financial requirements and suitability requirements that must match specific objectives, goals, and risk tolerances. Securities offered through FNEX Capital, member FINRASIPC.