Owning rental properties can be very frustrating. Many real estate investors are sick and tired of the hassle of dealing with tenants, trash, toilets and numerous other frustrations that owning and managing apartments, homes and commercial properties bring.
Many real estate investors are now searching for a 1031 exchange property so they can leave the numerous headaches of property management behind them.
Property prices are definitely up and continue to rise, especially in highly desirable markets like New York and California. With higher selling prices comes the issue of capital gains. So investors are looking for a viable replacement property so they can possible use the section 1031 exchange to defer their pending capital gains taxes.
Dwight Kay is the founder and CEO of Kay Properties and Investments, LLC (KPI). The company’s website is www.kpi1031.com Dwight say, “Many of our clients had previously never heard of DST properties and how they can be used as 1031 exchange replacement properties.”
One intriguing option that 1031 exchange investors should be aware of is utilizing a Delaware Statutory Trust (DST) 1031 replacement property. But don’t worry, this program is not just for properties located in the state of Delaware. Mr. Kay explains his firm’s clients and properties cover all 50 states.
Dwight continues, “Whether it be, for example, a Costco in Utah, a Walgreens in New Jersey, a CVS in Florida, or a 300 unit multifamily apartment property in Texas, our clients are able to invest from as little as $100,000 to over $5,000,000 via a 1031 exchange into our Delaware Statutory Trust (DST) properties.”
Now curious what DST 1031 replacement property is? A 1031 exchange allows a person to defer their capital-gains taxes on a property sale, if they actually reinvest the proceeds in what is called a “like-kind” property. These properties can include apartment buildings, vacant land, farmland, office buildings and warehouses, plus other types of properties. A key issue is the seller only has 45 days to identify what property they are going to exchange into.
Kay believes in diversification. He says many real estate investors that he deals with are at a point in their life where they want to diversify their real estate holdings. He said, “Although diversification does not guarantee profit or guarantee against loss, they realize having a large portion of their net worth in a sin.”