How to Choose a DST Advisor | DST Investments

Choosing a reputable DST advisor is crucial when it comes to investments and navigating the exchange process.  A DST advisor will provide assistance and resources throughout the whole process for the investor’s peace of mind. While the cost for such assistance is typically paid by the individual, expert knowledge and professional guidance can help to maximize tax savings.  It is recommended to ask for references from friends and family in order to find a reputable advisor. There are additional steps one can take when searching for a DST Advisor, which you can read more about through this article.

How to Identify a Reputable Advisor

One of the first steps is to ensure that the advisor is experienced in 1031 exchanges. Every year, more than 1 million investors make use of 1031 exchanges to defer taxes on capital gains when selling investment property. A large number of these investors engage with impartial DST advisors, who will help navigate the exchange process for property owners who are interested in reinvesting proceeds into new properties.

An experienced DST advisor will be able to provide investors with an estimate of the net after-tax proceeds that they can expect to receive on exchange. The 1031 exchange process is complex, and the language can be confusing. A reputable DST advisor should always work in the client’s best interest, helping them understand their options and offering guidance to maximize tax savings.

A DST advisor should also help identify new investment properties that can be used in an exchange and provide assistance with identifying new financing. A 1031 exchange only applies to the purchase of a replacement property; therefore, purchasing a property before selling the old one is critical so as not to lose the benefit of the deferral. A reputable advisor will provide guidance throughout the entire process to ensure that clients are making informed decisions.

Choosing a Reputable Advisor

An investor should always get written confirmation of any estimated tax savings before engaging an advisor, especially when it comes to more complex 1031 exchanges involving multiple replacement properties or “boot.” Determining how much money to leave in the seller’s pocket will play a large role in determining how much cash an investor can reinvest into a new property.  

A reputable DST advisor should always provide clients with written estimates and, upon request, proof of the actual deferral amount. The estimate should include:

  • The estimated initial equity in the replacement property
  • The estimated net after-tax proceeds of the sale
  • The estimated initial equity in the replacement property

The estimate should also include the actual deferral amount.  A reputable advisor will be able to provide clients with documentation that supports these amounts in order to help maximize tax benefits.

 When it comes time to implement a 1031 exchange, the exchange process can be confusing and overwhelming for investors. A good DST advisor will help walk clients through the steps of an exchange, including preparing any necessary documentation. They should also provide guidance on how to complete both partial exchanges and multiple property exchanges.

 A 1031 Exchange is complex, but with proper support, it isn’t difficult to understand. A reputable advisor can provide written confirmation of tax benefits and offer guidance throughout the process.

Different services that a DST Advisor provides:

DST Advisors provide assistance with securing a replacement property and help navigate through all the rules and regulations associated with these types of investments.

  • Assistance with identifying replacement properties
  • Guidance on completing partial exchanges
  • Guidance on completing multiple property exchanges
  • Proof of actual deferral amount upon request

Is a 1031 Exchange The Best Option For You?

When considering whether or not you should use a 1031 exchange, it is important to remember that the main benefits only apply if you are selling an investment property.  A 1031 Exchange can be used with some types of investment property, including land and homes. However, there are scenarios and certain factors that make some situations ineligible for this type of investment. This is why it’s always recommended to work with a reputable DST Advisor to determine eligibility.

A 1031 Exchange isn’t for everyone. They can be complicated and are not always ideal for everyone. However, when done correctly, they can be very advantageous for investors looking to maximize their profits.

If you are ready to learn more about if a 1031 Exchange is the best choice for you, reach out to us and receive a complimentary consultation.

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