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Kay Properties & Investments Helps Investors Achieve Passive Management and Diversification Through a Delaware Statutory Trust 1031 Exchange

Kay Properties & Investments was recently contacted by a real estate investor couple who needed help completing a 1031 exchange into Delaware Statutory Trust (DST) investments across multiple property types and geographic locations. While the couple were experienced investors with decades of real estate experience, they contacted Kay Properties in order to access the firm’s full DST marketplace of all-cash/debt-free real estate investment options, and the firm’s nationally recognized expertise in DST investments.

“This was more than a successful DST 1031 exchange transaction. It represented a growing trend we’ve been seeing more and more within our investment community. There is a real need for our investors to have solutions for their investment real estate needs once the time comes for them to step away from active management. I was incredibly proud that our Kay Properties team of DST experts was able to help these two impressive and experienced investors achieve their objectives,” said Dwight Kay, Founder and CEO of Kay Properties and Investments.

According to Kay Properties Vice President and DST 1031 investment expert, Alex Madden, when the couple reached out to Kay Properties, they were in a conundrum, and needed a firm who could help advise them on Delaware Statutory Trusts 1031 exchanges. They were looking for someone with the patience and resources to educate them on specific strategies while always enlightening them on both the potential risks and benefits of DST investments.

“They had worked hard their entire lives and had acquired a portfolio of eight well-located condominiums that had appreciated phenomenally over the years. It was a big point of pride for them that they were able to pay off the mortgages on all their properties,” said Madden.

Because the couple were first-time DST investors, Madden explained that he spent a significant amount of time in the beginning educating them on how to use DST investments as a 1031 exchange vehicle, and how the unique structure of the DST could potentially help them achieve their unique set of financial and nonfinancial goals. We also spent considerable time and energy discussing the potential risks of DST investments and going through these risk factors in detail.

“They had been active and hands-on real estate investors for so long, so we understood there was going to be a learning curve. But they regularly attended and participated in our conference calls and our webinars, along with reading just about everything we had including the detailed offering memorandums business plans and risk factors, so that when they consulted with their CPA, they were prepared and had all of the right questions to ask. The main thing they wanted was to be completely hands off from active management as well as to defer associated taxes utilizing the 1031 exchange,” said Madden.

Madden explained that while they had considered some triple net lease (NNN) properties at first, they also felt it was too late in their life to learn a whole new business model. They also felt that after making all the sacrifices over the years to become debt-free on their condominiums, it didn’t make sense to take the risk of investing in a leveraged DST. Kay Properties has access to many leveraged DSTs for those needing to replace debt in a 1031 exchange as well as many debt-free DSTs for those not needing to replace debt nor wanting to take on the risk of leverage in their replacement properties.

So, with the help of Kay Properties team of DST experts, the couple invested in a multifamily apartment DST, a corporate headquarters DST, a dialysis medical building DST, and a self-storage DST. Each property was in a different geographical location, and each tenant represented a different industry.

“Everything went well, and in the end, they were very pleased and appreciative of the Kay Properties business model. We spent the necessary time with them to understand their objectives, goals and risk tolerances and worked tirelessly with them and their CPA to build a 1031 exchange DST solution that would potentially achieve those objectives,” said Madden.

About Kay Properties and
Kay Properties & Investments is a national Delaware Statutory Trust (DST) investment firm. The platform provides access to the marketplace of DSTs from over 25 different sponsor companies, custom DSTs only available to Kay clients, independent advice on DST sponsor companies, full due diligence and vetting on each DST (typically 20-40 DSTs) and a DST secondary market. Kay Properties team members collectively have over 115 years of real estate experience, are licensed in all 50 states, and have participated in over $21 Billion of DST 1031 investments.

*NOTE: Past performance does not guarantee future results and DST investments may result in a complete loss of investor principal. This is an example of the experience of one of our clients and may not be representative of the experience of other clients. These clients were not compensated for their testimonials. Please speak with your attorney and CPA before considering an investment.

Diversification does not guarantee profits or protect against losses. All real estate investments provide no guarantees for cash flow, distributions or appreciation as well as could result in a full loss of invested principal. Please read the entire Private Placement Memorandum (PPM) prior to making an investment. This case study may not be representative of the outcome of past or future offerings. Please speak with your attorney and CPA before considering an investment.


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