CASH-OUT 1031 EXCHANGE
THE DST STRUCTURE CREATES UNIQUE CASH-OUT OPPORTUNITY
This exchange strategy allows you to completely defer capital gains through a 1031 exchange that includes an option to elect a substantial non-taxable refinance distribution post-close. These DSTs have institutional, credit quality tenants with long-term, non-recourse, credit-based financing approaching 85% LTV and long-term NNN or NN leases. This strategy allows exchange investors to exactly match their required need and receive a cash-out distribution that is greater than the net after-tax amount that would have been received by paying the capital gains on a property sale outright. As the loan amortizes, investors are afforded the opportunity to grow their remaining equity position through the life of the investment.
Once received, the non-taxable refinance distribution can be re-deployed without restriction into the purchase of a new property with a new cost basis or any other type of traditional or non-traditional investment.
Due to the complex nature of this DST strategy, it is imperative that exchange investors consult their own accounting and tax professionals to discuss this strategy further as each investor's tax circumstances are unique.
Loan-to-Value (LTV) is a ratio that compares the amount of a loan to the appraised value or purchase price of a property. It is commonly expressed as a percentage.
Double Net (NN) lease is a lease structure in which the tenant typically pays property taxes and insurance in addition to base rent, while the owner generally remains responsible for structural and certain maintenance expenses, subject to lease terms.
Triple Net (NNN) lease is a lease structure in which the tenant typically pays property taxes, insurance, and maintenance expenses in addition to base rent, though responsibilities vary based on the specific lease agreement.
