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Benefits of Triple Net Lease Properties
Current cash flow – Credit tenants with long term leases offer net lease investors the potential for a predictable income stream Inflation Hedge – Properties with rent escalations offer a hedge against inflation risk Passive Investment – In addition to lease payments, a triple net lease tenant is responsible for all operational aspects of the property (including maintenance, taxes, and insurance), thus making the property attractive to investors seeking relief from property management Estate Planning – Current cash flow, no management responsibility, and a potential step up in basis make triple net lease properties an attractive option to investors with estate planning...
read moreRisks of Delaware Statutory Trusts
General Real Estate RiskAs with any real estate investment DST properties may lose value. Various economic cycles can affect the performance and value of any property. Real estate investing is speculative and involves a high degree of risk; as such, investors should be able to bear the loss of their investment. No Guarantee of Income or PerformanceNeither 1031 Investment Services nor any of the Sponsors of DST or TIC properties guarantee income distributions or overall performance of any property. Non-LiquidA DST investment is an investment in real estate and considered illiquid. Although investors have the right to sell their interest at any time, there is no established secondary market. Investors should be prepared to hold their interests until disposition of the property. Fees and ExpensesThe cost of acquiring a DST may be more than purchasing a property entirely on your own. In some instances, costs associated with the transaction may impact returns and outweigh the tax benefits of the investment. Leverage Enhances VolatilityWhile DST and TIC properties are offered with varying degrees of financing, there are additional risks associated with leveraged properties including increased volatility and risk of principal invested. ControlInvestors in DSTs have limited rights and no control in the operation of the property. Conflicts of InterestConflicts of interest may exist that could adversely affect the investment. 1031 Exchange RisksThere are a number of significant tax risks and issues related to the purchase of a beneficial interest in a DST property. Investors should consult their tax advisors and legal counsel before investing. If an investor does not comply with the detailed requirements of Section 1031 they may lose the tax benefits of a 1031 exchange....
read moreBenefits of Delaware Statutory Trusts
Simplicity & Ease of OwnershipDST ownership provides simplicity and ease of ownership by eliminating active property management headaches for investors. Real estate investors who are tired of the day to day burdens of property management or who own land and would like to own income producing property may benefit from a professionally managed or triple net leased DST property. The Sponsors of DST properties source potential acquisitions, conduct extensive due diligence, arrange financing, manage the asset, negotiate leases, distribute income, and provide quarterly and annual reports for investors. Property tours and conference calls are typically offered to investors as well. Monthly Cash FlowOne of the primary benefits of owning DST properties is the potential to generate income. Cash flow from a DST is paid monthly and may be partially sheltered from taxes. As with any real estate, there is no guarantee of steady income, but investing in a diversified portfolio of quality DST assets may reduce the reliance on one or a few tenants. Higher Quality Real EstateDST ownership offers investors the opportunity to invest in a caliber of property that they may not be able to acquire on their own by allowing up to 99 investors in a property. Low Minimums and Flexible Investment AmountsMinimum investment amounts in DSTs are as low as $100,000. These low minimums enable investors to participate in the ownership of larger, higher quality assets in preferred locations with credit tenants and also facilitate diversification into a portfolio which may include different property types, locations, tenants, and industries. Flexible investment amounts enable investors to precisely match the equity and debt requirments of their 1031 exchange. DiversificationDST ownership enables investors to diversify their 1031 exchange proceeds, thereby potentially reducing the risks associated with investing in a single asset. It may be possible for an investor to own DST and TIC interests in multiple asset classes and locations such as: a 400 unit apartment complex, a medical office building, a triple net leased retail property leased to a credit tenant. It is important to note, however, diversification does not guarantee against loss, and income is not guaranteed and may fluctuate. Pre-arranged FinancingArranging for financing within the time constraints of a 1031 exchange can be difficult. Most DST properties are offered with pre-arranged, non-recourse loans making it easier to replace required debt in a 1031 exchange. For those investors seeking properties without leverage there are typically several options available. Real Estate TaxationLike any real estate investment, DST ownership offers the benefit of depreciation in addition to the capital gains deferral received from a 1031 exchange. Ready Inventory of Properties AvailableA ready inventory of DST (and TIC) properties allows individuals to easily identify properties within the 45 day identification period of a 1031 exchange. DSTs may also be useful as a “backup” property in case a preferred property fails to close. Extensive Due DiligenceThe quality of the property and its management determine in large part how reliable the investment will be in terms of preserving principal, cash flow, and long-term appreciation. Due diligence is performed on each property, surrounding market, and real estate provider (Sponsor) before a property is recommended to our clients. 1031 Investment services utilizes our own in-house due diligence in addition to that of our broker-dealer and highly regarded third party organizations to help ensure...
read moreRisks of Tenant In Common Properties
General Real Estate RiskAs with any real estate investment TIC properties may lose value. Various economic cycles can affect the performance and value of any property. Real estate investing is speculative and involves a high degree of risk; as such, investors should be able to bear the loss of their investment. No Guarantee of Income or PerformanceNeither 1031 Investment Services nor any of the Sponsors of TIC or DST properties guarantee income distributions or overall performance of any property. Non-LiquidA TIC investment is an investment in real estate and considered illiquid. Although investors have the right to sell their interest at any time, there is no established secondary market. Investors should be prepared to hold their interests until disposition of the property. Fees and ExpensesThe cost of acquiring a TIC may be more than purchasing a property entirely on your own. In some instances, costs associated with the transaction may impact returns and outweigh the tax benefits of the investment. Leverage Enhances VolatilityWhile TIC and DST properties are offered with varying degrees of financing, there are additional risks associated with leveraged properties including increased volatility and risk of principal invested. ControlWhile TIC owners do vote on major decisions related to the property, they do not have direct control of the day to day operations. Conflicts of InterestConflicts of interest may exist that could adversely affect the investment. 1031 Exchange RisksThere are a number of significant tax risks and issues related to the purchase of an interest in a TIC property. Investors should consult their tax advisors and legal counsel before investing. If an investor does not comply with the detailed requirements of Section 1031 they may lose the tax benefits of a 1031...
read moreBenefits of Tenants in Common Properties
Simplicity & Ease of OwnershipTIC ownership provides simplicity and ease of ownership by eliminating active property management headaches for investors. Real estate investors who are tired of the day to day burdens of property management or who own land and would like to own income producing property may benefit from a professionally managed or triple net leased TIC property. The Sponsors of TIC properties source potential acquisitions, conduct extensive due diligence, arrange financing, manage the asset, negotiate leases, distribute income, and provide quarterly and annual reports for investors. Property tours and conference calls are typically offered to investors to as well. Monthly Cash FlowOne of the primary benefits of owning TIC properties is the potential to generate income. Cash flow from TICs is paid monthly and may be partially sheltered from taxes. As with any real estate, there is no guarantee of steady income, but investing in a diversified portfolio of quality TIC assets may reduce the reliance on one or a few tenants. Higher Quality Real EstateTIC ownership offers investors the opportunity to invest in a caliber of property that they may not be able to acquire on their own. For example: a 400 unit Class A apartment complex with superior amenities located at a preferred location in a major metro would not be an option for an investor with $500,000. However, 30 investors with $500,000 each and financing are able to acquire the building through Tenant in Common ownership. Low Minimums and Flexible Investment AmountsMinimum investment amounts in TICs are as low as $100,000. These low minimums enable investors to participate in the ownership of larger, higher quality assets in preferred locations with credit tenants and also facilitate diversification into a portfolio which may include different property types, locations, tenants, and industries. Flexible investment amounts enable investors to precisely match the equity and debt requirments of their 1031 exchange. DiversificationTIC ownership enables investors to diversify their 1031 exchange proceeds, thereby potentially reducing the risks associated with investing in a single asset. It may be possible for an investor to own TIC interests in multiple asset classes and locations such as: a 400 unit apartment complex, a medical office building, and a triple net leased retail property leased to a credit tenant. It is important to note, however, diversification does not guarantee against loss, and income is not guaranteed and may fluctuate. Pre-arranged FinancingArranging for financing within the time constraints of a 1031 exchange can be difficult. Most TIC properties are offered with pre-arranged, non-recourse loans making it easier to replace required debt in a 1031 exchange. For those investors seeking properties without leverage there are typically several options available. Real Estate TaxationLike any real estate investment, TIC ownership offers the benefit of depreciation in addition to the capital gains deferral received from a 1031 exchange. Ready Inventory of Properties AvailableA ready inventory of TIC (& DST) properties allows individuals to easily identify properties within the 45 day identification period of a 1031 exchange. TICs may also be useful as a “backup” property in case a preferred property fails to close. Extensive Due DiligenceThe quality of the property and its management determine in large part how reliable the investment will be in terms of preserving principal, cash flow, and long-term appreciation. Due diligence is performed on each property,...
read moreExisting TIC & DST Owners
If you have questions or need assistance with an existing TIC or DST property purchased through another firm, 1031 Investment Services can assist you in the following ways: Answer questions you may have regarding your property, the surrounding market, or sponsor A Free Review of Quarterly Report and/or Annual Budget Arrange a Conference call with the Sponsor company If your TIC or DST property is being marketed for sale or under contract, 1031 Investment Services may be of assistance in the following ways: Review your options and help determine which may be right for you Source Potential Properties: DST, TIC, and/or Triple Net Lease Develop strategies and source properties which may assist with High Leverage 1031 Exchange Requirements Review 721 Exchange or UPREIT options if applicable 1031 Investment Services offers Free Consultations, where we can review your existing property and potential options. Call us at 877.255.1031 or submit your information, and we’ll contact you...
read moreDeferred Commission Option
1031 Investment Services is committed to providing investors with the highest quality 1031 exchange property at the lowest cost possible, so you can keep more of your hard earned equity working for you. That is why with select Delaware Statutory Trust (DST) and Tenant in Common (TIC) properties, we offer to waive our portion of the up front commission and apply it to your investment. Traditionally, a DST or TIC sponsor company pays brokers a commission based on equity invested. Though investors don’t pay the commission out of pocket it is included or built into the offering price paid by investors. By our waiving the commission this amount will be applied to your investment. Under this option, 1031 Investment Services will receive a “Deferred Commission” on an annual basis from cash flow generated by the Delaware Statutory Trust or Tenant in Common property. If you don’t get paid, we don’t get paid. While your net cash flow may not be all that different, the difference in equity retained and overall return may be substantial. We believe this structure keeps more of your equity working for you and better aligns our interests with yours over the long term. EQUITY INVESTED FINANCING(LOAN TO VALUE %) VALUE OF PROPERTY AQUIRED WITH COMMISSION VALUE OF PROPERTY ACQUIRED WITHOUT COMMISSION $1,000,000 NONE $1,000,000 $1,070,000 $1,000,000 50% $2,000,000 $2,140,000 $1,000,000 66% $3,000,000 $3,210,321 *This example is hypothetical and does not represent any specific investment. Actual results will vary. The above illustration is for information purposes only. You should consult with your attorney and accountant for legal and tax advice. Please call us at 877-255-1031 for addtional details. The Deferred Commission Option may not be available for all...
read moreProperty & Market Research
At 1031 Investment Services we believe the best investment decisions are based on solid information and analysis. We seek to thoroughly understand the underlying fundamentals of a property and surrounding market before we make a recommendation to our clients. In addition to the information provided by the seller/sponsor of a property, we utilize the following in evaluating each property: Market research and forecasts from industry leading research firms Review of tenant(s) financial strength and credit rating Due diligence reports from third party legal counsel Our broker-dealer’s due diligence Sponsor review – which include a review of the sponsor’s track record, management experience and capabilities, and our own direct experience with a sponsor (we have done business with 25 different TIC & DST sponsors) Our own experience in a market (properties in 60 markets throughout the U.S.) On-site property inspections – our firm generally performs on-site inspections of a property and recommend clients do the same before investing Tenant in Common & Delaware Statutory Trust Industry Research As part of our ongoing research efforts, 1031 Investment Services has compiled a database of over 1200 existing TIC and DST properties from 97 different sponors. Since 2004, we have gathered data from initial offering materials, real estate sponsors, TIC and DST investors, public record, and people within the industry. Analysis of this data offers valuable insight into the performance of individual properties, property types, markets, and sponsors. Sources include: REIS, Inc. CoStar CBRE Econometrics Commercial Brokerage Firms Industry Associations Industry Articles & News Commercial Listings 1031 Investment Services Client Portfolio: Monitoring over $2.9 billion of real estate in 60 markets nationwide Proprietary TIC and DST Property Research and performance data on over 1200 existing...
read morePrivacy Policy
At 1031 Investment Services, we are committed to protecting your privacy. As an integral part of our providing quality services to you, we collect certain personal information about you. We will not sell, trade or rent your personal information to others. This information is for our private records only. We disclose this information only as absolutely necessary to provide the services you have come to expect from us. Personal information is not available to any third party via our website or through any other means. We make every effort to minimize the amount of email correspondence you receive from us. We do not share or sell your email address to any third parties. Our privacy policies will continue to apply even after you cease to have any customer relationship with us. If you wish to discuss further the details of our policies, do not hesitate to contact us via email info@1031investmentservices.com or by phone at (877)...
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