Monthly Archives: August 2017

Fractional real estate ownership: What are the benefits?

Fractional real estate ownership: What are the benefits?

A lot of individual investors prefer growing their portfolios by selling and buying investment real estate. One of common needs of these investors is to increase the investments quickly. More often than not, the amount they possess is not sufficient for achieving the growth they expect.

This is where fractional co-ownership appears in the picture. Through this process, an individual gets a chance to get the ownership of a profitable real estate asset, which is otherwise not possible for an individual to do with his/her own resources.

Fractional ownership also lets the investor diversify the portfolio. Delaware Statutory Trust (or DST) is one such form of fractional real estate ownership where the individual can get a hold of institutional-grade by investing only $100,000.

It is also popular among those investors who want to defer the taxes related to capital gains on investment property. This is done via 1031 real estate exchange, in which DST investments act as replacement property.

Tenants-in-common (TIC) is also quite popular among investors, but a lender underwrites multiple borrowers in the TIC structure. In the DST, only a single borrower is underwritten by the lender. A DST can have an unlimited number of investors, whereas the limit is 35 in the case of TIC.

These factors show that fractional ownership especially that of DST is quite beneficial for those who want good results through real estate investments.

You can contact the representatives from FAI Exchange to help you find DST properties that suit your budget.

The role of due diligence in DST investments

While investing, every investor wants to be sure that his or her money into safe hands. This becomes more crucial when we are talking about complex real estate transactions. When you are investing in DST (Delaware Statutory Trusts) for 1031 exchange, due diligence is quite necessary.

Here we discuss how to do a proper inspection in this type of investment.

Structural review

You must get the assistance of an experienced attorney for reviewing documentation for the transaction. An attorney will make sure they are no errors in the documents. You will also come to know about any clause that might affect you at later stages.

Analysis of sponsors

You must go through the financial condition, performance record, experience, and backgrounds of the sponsors involved in the property.

Property inspection

Check the physical condition of the property before making an investment. All make sure that the performance of the property is similar to that of other properties in the region.

These inspections make the Delaware Statutory Trust-related real estate investments successful. One needs to understand some market risks are always associated with DST.

If you are planning for a 1031 exchange, contact the representatives from FAI Exchange to know more about the process. Apart from helping you find the DST investments for this process, you can take the support of the company for finding a qualified intermediary. We will also guide you through the entire process.

Find out more about this company here. You can email your queries on wlm@snetinvest.com or give a call on (888) 669-3332. You need to register on the website to get access to latest DST offerings.