DSTs have emerged as one of the most popular investment structures over the years. Statistics suggest a surge in the number of investors opting for DST investment in recent times. After all, DST investment brings so many benefits to the table. Believed to be one of the safest investment options, DSTs are private governing trusts that are responsible for buying, managing, administering, and selling real estate properties. DST shares can be purchased with the help of a real estate broker or agent.
On the other hand, the popularity of NNN investment has also been second to none. NNN investment is an ideal option for investors who want to get rid of the burden of property management. As a NNN lease requires the tenant to pay all operating expenses associated with the property they’ve rented, NNN investors are not exposed to any liabilities and enjoy a free flow of income.
Opportunity for cash investors –
The best thing with cash investors is that they don’t need to abide by any set of rules for investing. As long as you’ve enough cash, you can invest anywhere. Cash investors can directly buy DST shares and enjoy management-free income. When you invest in a DST, you don’t invest in the trust but in the real estate properties. That’s why DST investment is viewed as a real estate investment. DSTs generally have a large structure and a DST with a hundred or even more investors shouldn’t surprise you. Because of this, a DST investment may start from as low as $500k. For cash investors, there couldn’t be a better opportunity than this to diversify their portfolio.
Similarly, cash investors can also invest in NNN properties and enjoy no-liability-income. A triple net or NNN lease requires the tenant to pay all operating expenses including insurance fee, property taxes, and maintenance cost along with the base rent. Therefore, as a NNN investor, you’ll enjoy a regular flow of income without any liabilities. As the majority of NNN tenants are big established companies, the risk of default is also significantly low in this kind of investment.
Invest your 1031 proceeds in DST and NNN Properties Simultaneously…
As a 1031 investor, you can split your proceeds and invest them in DST as well as NNN properties. Once you’ve closed on the sale of your relinquished property, all you need to do is identify different DST and NNN investment options within 45 days. The only thing you need to keep in mind is the value of the replacement property or properties must be equal to or greater than that of the relinquished property. Once this requirement is fulfilled, you can acquire any number of replacement properties. For getting a clear insight, you can talk to a 1031 advisor.
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