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  1. Unlike a TIC transaction, there is no need under the DST structure to set up an LLC for each investor. Instead, each investor owns a beneficial interest (BI) in the DST, which is the bankruptcy remote entity. The DST itself shields the investor from any liabilities with respect to the property. This saves the investor substantial money in formation costs and annual maintenance fees. It also provides a less complex structure for the investor.
  2. Unlike a TIC transaction, which requires that co-owners vote unanimously on all major decisions, a BI holder in a DST is not permitted to vote. Therefore, the concern over the "rogue investor" is eliminated.
  3. Because the DST (and not each investor) is the borrower, there is no need for the lender to obtain tax returns, financial statements, and credit authorizations from each investor for loan qualification.
  4. In a DST the trust owns 100% of the fee interest in the real estate, so unlike TIC's, there is only one loan and one borrower.
  5. There is no restriction on the number of investors in a DST, as opposed to a TIC which is limited to 35 investors. As a result, larger properties can be purchased without causing investment minimums to rise to unacceptable levels.
  6. DST is an acceptable structure for 1031 exchange transactions (within the conditions set forth by Internal Revenue Ruling 2004-86).
Please refer to The Seven Deadly Sins for a discussion of risks associated with DST's.		  
   
   
   
     
 

Resources
Overview
TIC Limitations
Investor Benefits
Lender Benefits
The Seven Deadly Sins
The Springing LLC

  
 
 
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The material contained in this website does not constitute an offer to buy or sell securities or real estate. Such an offer can only be made by a sponsor's private placement memorandum or prospectus, which fully describes the offering, including risks and expenses. Turner Financial Group, Inc. and Lighthouse Capital Corporation are not affiliated. (See Additional Disclosures)