Many Clients like to work with Kay Properties for the access to the 1031 DST Marketplace available at www.kpi1031.com, others like it because of the depth of real estate and DST 1031 industry knowledge Kay Properties is able to bring to the table, while still others value the extensive due diligence provided by the Kay Properties team of analysts – these Clients saw that immediately.
Alex Madden, Vice President with Kay Properties and Investments explained: “These Clients were a husband a wife who already had a completed a large exchange into DSTs prior to being introduced to Kay Properties and Investments. Due to significant appreciation of their original properties they had very low Loan to Values (LTVs). They completed their original DST 1031 exchanges with a local financial planner who never explained to them (possibly because he didn’t understand the concept) the long-term impact of taking on more debt in a 1031 exchange via DSTs with higher LTVs than the properties that they sold. The financial planner also only had access to one DST Sponsor and as a result, by the time we met them the Clients had taken on substantially more debt than their 1031 required, which greatly increased their risk, and they were over-concentrated in a single DST Sponsor’s offerings.”
Senior Vice President Chay Lapin went on to say “We evaluated their current DST portfolio and discussed the potential pros and cons of adding debt in a 1031 exchange and the risks of using too much leverage in an exchange. After extensive discussions our Clients determined they did not want to take on any additional debt as they did not want to further increase their risk. Over four subsequent 1031 exchanges with our Clients we have helped them diversify* into DSTs with 5 different Sponsors and 6 different asset classes – all while avoiding taking on any more debt than was necessary for the 1031 exchange. This is another example of a situation whereby our expertise in completing thousands of DST 1031 exchanges was able to bring extreme value to our clients.”
*Diversification does not guarantee profits or protect against losses.