FLEXIBLE-EQUITY INVESTMENTS IN COMMERCIAL INCOME PROPERTIES
Real Estate Investments with a simplified 1031-exchange solution through Delaware Statutory Trust (DST) ownership interests.
Delaware Statutory Trusts (DSTs) provide real estate investors with a way to invest passively in commercial real estate. Kingsbarn, as a sponsor of DSTs, acquires high-quality commercial income properties, places non-recourse financing on the properties, and retains a national, third-party property and asset management firm to manage the properties and make monthly distributions to all investors. Ownership in the Trust is based on a pro-rata share of the equity invested. For example, if a property requires $5 million of equity to acquire and an investor purchases $1 million worth of the Trust, they will own 20% of the Trust and, as such, will receive 20% of the cash flow distributions as well as 20% of the depreciation allocation in order to defer capital gains taxes.
DELAWARE STATUTORY TRUSTS
Kingsbarn has been recognized by Mountain Dell Consulting as a Top 10 DST Sponsor (2018) based on equity invested into our DST program. We acquire only California properties, are the only sponsor to offer California properties structured as DSTs, and the only sponsor to offer commissions to real estate brokers. We focus on acquiring properties leased to strong, publicly-traded tenants. Our goal is to provide consistent monthly income to our investors by providing 1031-exchange eligible DST ownership interests.
One Source to Manage and Execute the Entire Transaction
A Delaware Statutory Trust is a separate legal entity created as a trust under Delaware law. Delaware law provides great flexibility in the design and operation of the entity. However, to use a DST in a Section 1031 tax-deferred exchange program, it must comply with the requirements of IRS Revenue Ruling 2004-86, so that a beneficial interest in the trust is treated as a direct interest in real estate for tax purposes. The trust also must satisfy lender requirements, especially if the loan is to be securitized.
A Simplified 1031 Exchange Solution
Purchasers of DST-structured real estate investments typically enjoy monthly cash flow from high quality properties. A Kingsbarn DST investment affords purchasers an investment free of day-to-day management responsibilities, as Kingsbarn and its third-party management partners professionally conduct all property and asset management responsibilities.
Kingsbarn Facilitates The Entire Transaction:
- Acquisition of the real property
- Professional due diligence reports
- Securing financing (non-recourse to DST Investors)
- Coordinating with qualified intermediaries
- Providing all organizational and offering documentation
- Providing a legal tax opinion
- Professional third party property and asset management services
- Monthly check issuance to investors (by check or direct-deposit)
A DST-structure is a "pooled-equity" investment. DST purchasers realize significant benefits by acquiring larger commercial properties that are typically higher-quality assets than could be purchased individually. Investors looking for stabilized, core properties often favor a DST-structured investment.
- Provides investors with lower minimum equity requirements
- Provides a more simple and efficient closing process
- Provides investors protection against loan recourse liability
- Provides the ability to act quickly when 1031 exchange issues arise
- Eliminates shareholder voting responsibilities
- Provides a simple structure for investors
- Eliminates annual LLC fees to investors
- Eliminates need for investors to provide tax returns to lenders
- Provides management-free income