DST – 1031 2020-06-01T15:59:33-06:00

Passive Real Estate Investing


What is a DST?

Delaware Statutory Trusts, (DSTs), allow owners of real estate to sell their rental properties and potentially defer capital gains taxes. DSTs are derived from Delaware Statutory law as a separate legal entity and formed as private governing agreements for the purposes of managing, administering, investing and or operating real, tangible and intangible property; or business or professional activities for profit that are carried on by one or more individuals who act as trustees for the benefit of a party who is entitled to a beneficial interest in the trust property.

Though Delaware Statutory Trusts are not new, in 2004 the IRS came out with an official Revenue Ruling detailing how a DST could be structured in such a way that it would qualify as property replacement vehicle for 1031 Exchanges. Well known to real estate investors, a 1031 like-kind exchange allows you to defer the capital gains tax on the sale of investment property by reinvesting the proceeds into a similar qualifying property.

As a result DSTs have become an investment vehicle for investors who want the benefits of owning real estate without becoming a “landlord”, as well as current real estate investors who no longer want the responsibilities of being a landlord.

How do DSTs work?

A property is identified and acquired under a DST by a sponsoring real estate investment firm. The same firm, also acting in the capacity as the master tenant, opens up the trust for potential investors to purchase a beneficial interest. In this realm an accredited investor would have an opportunity to own a beneficial interest in a property that would normally be out of reach to them from an investment standpoint. Additionally, they would also benefit from a professionally managed property without any of the associated landlord responsibilities.

What are the benefits of a DST?

  • Receive passive income from real estate minus the work
  • Own shares of major commercial real estate properties that currently produce income
  • Cash out the equity on your highly appreciated property into an income producing property AND potentially defer your capital gains with a 1031 exchange
  • Get the benefits of real estate ownership and income without the stress and hassles of property management
  • Create an easily dividable asset for your heirs

Are They Right For Me?

Do you own highly appreciated investment property?

  • Many people who own highly appreciated investment property feel trapped from cashing out due to the high tax bills they face on their gains.  A DST qualifies as a 1031 like-kind exchange.  That means you may be able to defer your tax bill AND still be invested in an income producing property without any property management responsibilities.

Are you interested in investing in income producing properties?

  • A DST can be a great addition to your portfolio whether you are a seasoned real estate investor or new to investing in real estate. The sponsoring firms make it easy to choose from a portfolio of properties to find one that best suits your investment strategy. There are also opportunities to invest in properties that are currently producing income.

Are you a current landlord tired of the responsibilities and dealing with the Terrible Ts?

  • A DST can be a great way to enjoy the benefits of real estate ownership without dealing with the Terrible T’s of being a landlord; Tenants, Trash, and Toilets.  As an investor in a DST you are not responsible for the property management. In fact, many of the properties have professional property management companies already in place so you no longer need to be involved in the upkeep and maintenance.

Are you looking for an easily divisible asset to leave your heirs?

  • Owning property can be a wonderful investment but challenging to split up amongst loved ones.  A DST is a real estate investment where you buy a fractional ownership interest that can be easily divided amongst your heirs avoiding potential family squabbles.

Did you just sell your highly appreciated investment property and can’t find a like-kind replacement?

  • A DST qualifies as a like-kind 1031 exchange so if you sold your property and are almost out of time to find a suitable replacement, you can invest in a DST and defer your taxes on the gains. When it comes to investing in real estate finding the right property is crucial, don’t rush into it just because you may be running out of time.  Invest in an income producing property that qualifies as a 1031 like-kind exchange.

What would be a reason not to invest in a DST?

  • Liquidity – if you want or need access to your funds invested in a DST, it may not be a good alternative for you. DST’s are illiquid assets and your funds are only available when the trust liquidates, which can take up to 10 years.


Exclusive WLS Interview

Tune in to hear Joe LoPresti present a new division of Arlington Capital Management called Chicago 1031 in this exclusive WLS interview! Chicago 1031 is dedicated to advising real estate investors on how to potentially defer the taxes on the sale of their highly appreciated income property with a Delaware Statutory Trust. Listen as he shares strategies to potentially create passive retirement income and defer the gains on your highly appreciated income property. If you are tired of being a landlord, click below to find out how DSTs can help potentially reduce or eliminate the responsibilities of property ownership.

This downloadable segment is only available for a limited time. Download your Exclusive Podcast Segment today!  


About Arlington Capital Management & DSTs

How Are We Different?

Arlington Capital Management was founded in 2000 based upon the principle of Proactive Wealth Management to help guide investors with the highest levels of information and experience. They utilize this same approach to help real estate investors take advantage of the many benefits of Delaware Statutory Trusts.

Arlington Capital Management partners with a team of CPAs to analyze DST investment opportunities. That means you can be confident that each DST opportunity recommended to you has been thoroughly vetted and specifically selected to meet your investment goals.

There are many benefits to investing in a DST but not all are created the same so it’s important to know who you are working with.

At Arlington Capital Management:

  • We partner with a team of CPA’s to analyze available DST opportunities and select ones specifically designed to meet your investment goals.
  • We are Fiduciaries and legally obligated to always act in your best interest
  • We are fee only advisors. You will not pay upfront commissions as you would when buying a DST through a broker.
  • We are experienced in delivering a thorough wealth management process and helping you make tax-smart investment decisions

You get access to the Proactive Wealth Management process:


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*To be an “accredited investor,” an individual must have had earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years and “reasonably expects the same for the current year.” Or, the individual must have a net worth of more than $1 million, either alone or together with a spouse, excluding one’s primary residence.

The information included in this material is for informational purposes only and should not be relied upon for any financial or legal purposes. Before you determine to proceed with a recommendation to invest in a Delaware Statutory Trust (DST), we urge you to read and understand the risks associated with such investment, as disclosed in that DST’s private placement memorandum.  ACM cannot and does not guarantee the performance of any investment, including DST investments.  ACM is a registered investment adviser with the SEC. Our registration with the SEC or with any state securities authority does not imply a certain level of skill or training, nor are we selling you any product.  Rather, we are seeking to provide you with advisory services. DST investments are only available to accredited investors and are offered solely through the offering documents provided by DST’s sponsor. The DST sponsor determines whether to accept any individual’s subscription documents.  DSTs are subject to the same risks as a direct property investment, as well as additional risks, such as regulatory, tax and execution risk.  Additional fees will be charged by the DST sponsor.  Please consult with your own tax and legal advisers before investing. 

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