Securing Listing Agreements:
Many brokers have expressed that their investors want to do a 1031 exchange but are afraid of not being able to locate and close on their replacement property within the 1031 exchange timeframe. The Delaware statutory trusts have been secured and pre-packaged prior to being available to investors, and therefore potentially reduce closing risk. Delaware statutory trusts can typically be identified and closed on within 24-72 hours. This helps with the sale of the property because investors feel comfortable knowing they have a readily available solution. In our experience, clients are often more willing to award a broker a listing if he knows that there is a solution like DSTs to help reduce their closing risk.
Back Up Identification:
As a broker, it can be very harmful to be responsible for a failed exchange for your investors. As mentioned above, in the majority of cases properties in the DST have been previously closed on before investors are able to invest. This allows brokers to utilize Kay Properties and Investments DSTs as a backup option for a client’s primary solution. In the event that the primary solution is no longer an option an investor can seamlessly transition into purchasing a DST, this would prevent a failed exchange, which is a taxable event. We have seen on many occasions’ properties fall out of contract for due diligence reasons (Bad property condition reports, environmental reports not coming in clean, appraisals, financing terms changing on investors) The due diligence has been completed on the DSTs we decide to work with, which allows investors to review a full package immediately. Of course, we encourage investors to conduct their own due diligence as well.
Covering an Exchange:
Brokers many times have contacted Kay Properties & Investments to cover an exchange. As a broker you may find you client the perfect property that meets their criteria but does not utilize all of their 1031 exchange proceeds. The left-over proceeds are considered taxable “boot”. In order to avoid further 1031 exchange tax consequences investors can utilize their left over “boot” to invest into DSTs and have a full tax deferral. The DSTs financing is pre-packaged and investors do not need to qualify for the financing. DST financing is typically fully non-recourse. (*Every investors tax situation is different, and we cannot provide tax or legal advice. Investors should inquire with their CPA/Accountant to verify their 1031 requirements) Please remember that each investors situation is on a case by case basis. It is important to contact Kay properties in an ample amount of time before your client’s deadline. This will give them enough time to understand the risk and business plan of each offering. We are always available for conference calls and or in-person meetings with your clients.
*It is important to note that all investors/entities considering DSTs as a 1031 Exchange Option need to be a considered an accredited investor. Please contact us for further question and or qualifications
About Kay Properties and Investments, LLC:
Kay Properties and Investments, LLC is a national Delaware Statutory Trust (DST) investment firm with offices in Los Angeles, San Diego, San Francisco, Seattle, New York City and Washington DC. Kay Properties team members collectively have over 114 years of real estate experience, are licensed in all 50 states, and have participated in over $9 Billion of DST real estate. Our clients have the ability to participate in private, exclusively available, DST properties as well as those presented to the wider DST marketplace; with the exception of those that fail our due-diligence process. To learn more about Kay Properties please visit: www.kpi1031.com This material does not constitute an offer to sell nor a solicitation of an offer to buy any security. Such offers can be made only by the confidential Private Placement Memorandum (the “Memorandum”). Please read the entire Memorandum paying special attention to the risk section prior investing. This material contains information that has been obtained from sources believed to be reliable. However, Kay Properties and Investments, LLC, WealthForge Securities, LLC and their representatives do not guarantee the accuracy and validity of the information herein. Investors should perform their own investigations before considering any investment. IRC Section 1031, IRC Section 1033 and IRC Section 721 are complex tax codes therefore you should consult your tax or legal professional for details regarding your situation. This material is not intended as tax or legal advice. There are material risks associated with investing in real estate, Delaware Statutory Trust (DST) properties and real estate securities including illiquidity, tenant vacancies, general market conditions and competition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial and multifamily properties, short term leases associated with multi-family properties, financing risks, potential adverse tax consequences, general economic risks, development risks and long hold periods. There is a risk of loss of the entire investment principal. Past performance is not a guarantee of future results. Potential cash flow, 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 WealthForge Securities, LLC. Member FINRA/SIPC. Kay Properties and Investments, LLC and WealthForge Securities, LLC are separate entities.