Comprehensive Guide to DSTs - Delaware Statutory Trust

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I’M ON A DEADLINE! – The 45-day clock is ticking. Get help identifying replacement options now.

DST Strategy – Complete your 1031 Exchange through a DST for passive ownership in institutional-grade real estate.

QOZ Opportunity – Defer or eliminate capital gains by reinvesting through a Qualified Opportunity Zone fund.

Energy Investment – Explore oil, gas, and mineral rights strategies designed for current income and significant tax advantages.

Marketplace Inquiry – Talk through a specific property you’re considering or get strategy guidance on a current offering.

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**An accredited investor, in the context of a natural person, includes anyone who: a) earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR b) has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence). Click here for information, or details on Accredited Entities.

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Directory:

CHAPTER 01 What Is A Delaware Statutory Trust?

CHAPTER 02 The History and Legal Foundations of the DST

CHAPTER 03 How DSTs Work Within a 1031 Exchange

CHAPTER 04 The IRS Rules Governing DSTs

CHAPTER 05 The Tax Benefits of DST Investing

CHAPTER 06 Beyond Taxes: The Other Benefits of DSTs

CHAPTER 07 Who Should Consider A DST?

CHAPTER 08 Understanding the Risks and Considerations of a DST

CHAPTER 09 Types of DST Properties and Asset Classes

CHAPTER 10 The Parties to a DST Investment

CHAPTER 11 A Step-by-Step Guide to Investing in a DST

CHAPTER 12 DST Exit Strategies: When The Trust Sells

CHAPTER 13 The 721 Exchange and the UPREIT

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Step 1 of 3 – Step 1 of 3 – What Brings You Here Today?

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Step 1 of 3 – What Brings You Here Today?

Select your service*

I’M ON A DEADLINE! – The 45-day clock is ticking. Get help identifying replacement options now.

DST Strategy – Complete your 1031 Exchange through a DST for passive ownership in institutional-grade real estate.

QOZ Opportunity – Defer or eliminate capital gains by reinvesting through a Qualified Opportunity Zone fund.

Energy Investment – Explore oil, gas, and mineral rights strategies designed for current income and significant tax advantages.

Marketplace Inquiry – Talk through a specific property you’re considering or get strategy guidance on a current offering.

Not Sure Yet – I’d like Daniel’s expert guidance on which path fits my situation.

Step 2 of 3 – Schedule Your Call

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Step 3 of 3 – Your Information

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I am an Accredited Investor

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A Step-by-Step Guide to Investing in a DST

We’ve covered the what, the why, the risks, and the players. Now let’s put it all together and walk through what actually happens when you invest in a Delaware Statutory Trust, from the moment you sell a property to the day the income starts arriving.

Most investors reach a DST by way of a 1031 exchange, so that’s the path I’ll trace here. (If you’re investing cash directly rather than exchanging, your route is simpler — you skip the exchange-specific steps and pick up at due diligence — but the heart of the process is the same.)

1031 Exchange Masterclass - Provident 1031 - with Daniel Goodwin

Step 1: Sell Your Property — And Don’t Touch the Money

It begins with a sale. You sell your appreciated investment property, triggering the capital gain you’re seeking to defer.

But here’s the step that trips up the unwary: before that sale closes, you must have a qualified intermediary engaged and ready. The proceeds cannot pass through your hands — not even briefly. They must flow directly from escrow to the QI, who holds them on your behalf. Take receipt of the money yourself, even for a moment, and the exchange is dead on arrival. This is non-negotiable, and it’s why arranging your QI early is the true first step.

Step 2: Start the Clock

The moment your relinquished property closes, two deadlines begin ticking simultaneously: 45 days to formally identify your replacement property, and 180 days to close on it. These windows are rigid and unforgiving, as our 1031 Exchange Guide explains in detail. The good news, as we’ve seen, is that a DST is uniquely suited to these deadlines, because the property is already found, packaged, and waiting.

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Step 1 of 3 – Step 1 of 3 – What Brings You Here Today?

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Step 1 of 3 – What Brings You Here Today?

Select your service*

I’M ON A DEADLINE! – The 45-day clock is ticking. Get help identifying replacement options now.

DST Strategy – Complete your 1031 Exchange through a DST for passive ownership in institutional-grade real estate.

QOZ Opportunity – Defer or eliminate capital gains by reinvesting through a Qualified Opportunity Zone fund.

Energy Investment – Explore oil, gas, and mineral rights strategies designed for current income and significant tax advantages.

Marketplace Inquiry – Talk through a specific property you’re considering or get strategy guidance on a current offering.

Not Sure Yet – I’d like Daniel’s expert guidance on which path fits my situation.

Step 2 of 3 – Schedule Your Call

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Schedule

Step 3 of 3 – Your Information

First Name*

Last Name*

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Where are you in the 45-day window*

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I am an Accredited Investor

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Step 3: Confirm Your Eligibility and Explore Offerings

With the clock running, you’ll work with a properly licensed advisor to survey available DST offerings. Early here, your advisor will confirm that you meet the accredited-investor requirement (the threshold we covered in Chapter 7), since that determines whether you can invest at all.

From there, you review the DSTs on the market: different sponsors, property types, and strategies. This is where the anchor-and-buoy thinking from Chapter 9 comes into play, as you weigh income against growth and consider how a given offering fits your goals.

Step 4: Do Your Due Diligence

Before committing, you study the offering closely. Each DST comes with a private placement memorandum (PPM), a detailed document disclosing the property, the sponsor, the financing, the fee structure, the projected distributions, and the risks. This is the moment to apply everything from the earlier chapters: scrutinize the sponsor’s track record, understand the fees, examine the tenants and lease terms, and confirm the investment genuinely fits your objectives.

This is also when formal identification happens. To satisfy the 45-day rule, you and your advisor identify your chosen DST (or DSTs) in writing, delivered to your QI before day 45.

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Step 1 of 3 – Step 1 of 3 – What Brings You Here Today?

33%

Step 1 of 3 – What Brings You Here Today?

Select your service*

I’M ON A DEADLINE! – The 45-day clock is ticking. Get help identifying replacement options now.

DST Strategy – Complete your 1031 Exchange through a DST for passive ownership in institutional-grade real estate.

QOZ Opportunity – Defer or eliminate capital gains by reinvesting through a Qualified Opportunity Zone fund.

Energy Investment – Explore oil, gas, and mineral rights strategies designed for current income and significant tax advantages.

Marketplace Inquiry – Talk through a specific property you’re considering or get strategy guidance on a current offering.

Not Sure Yet – I’d like Daniel’s expert guidance on which path fits my situation.

Step 2 of 3 – Schedule Your Call

Untitled

Pick a Time*

Schedule

Step 3 of 3 – Your Information

First Name*

Last Name*

Phone*

Email*

Where are you in the 45-day window*

Untitled*

I am an Accredited Investor

Untitled*

I agree to all Provident 1031 Terms & Conditions

Step 5: Subscribe and Fund

Once you’ve chosen, you complete a subscription agreement, the paperwork by which you commit to purchasing a specific beneficial interest in the trust. Your QI then transfers the appropriate amount of your held proceeds directly into the DST, and you receive your beneficial interest in return.

Because DST interests are fractional and divisible, this is where the precision we discussed earlier pays off: you can direct exactly the right amount to absorb your full exchange proceeds — replacing both equity and debt — leaving no taxable boot behind. All of this must be completed within the 180-day window.

Step 6: Collect Income and Hold

With funding complete, your role returns to the passive one that drew you to a DST in the first place. You receive your share of the property’s income, often distributed monthly, with no management responsibilities of any kind.

At tax time, rather than a partnership’s K-1, you’ll receive a grantor trust letter reporting your proportionate share of income, expenses, and depreciation, which flows onto your own return. And then you hold, typically for five to ten years, while the sponsor manages the asset and you collect the income.

And Then, Someday: The Exit

A DST is not forever. At some point, the sponsor will sell the underlying property, the trust will wind down, and you’ll face a decision: pay the deferred tax, roll the proceeds into another 1031 exchange, or pursue one of the other exit routes available to DST investors.

That decision is important enough, and rich enough, to deserve its own chapter. In fact, the exit can matter even more than the entrance. So that’s exactly where we’ll turn next.

Previous Opportunity

The Parties to A DST Investment

Next Opportunity

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Step 1 of 3 – What Brings You Here Today?

Step 2 of 3 – Schedule Your Call

Step 3 of 3 – Your Information

Directory:

Step 1 of 3 – What Brings You Here Today?

Step 2 of 3 – Schedule Your Call

Step 3 of 3 – Your Information

A Step-by-Step Guide to Investing in a DST

Step 1: Sell Your Property — And Don’t Touch the Money

Step 2: Start the Clock

Step 1 of 3 – What Brings You Here Today?

Step 2 of 3 – Schedule Your Call

Step 3 of 3 – Your Information

Step 3: Confirm Your Eligibility and Explore Offerings

Step 4: Do Your Due Diligence

Step 1 of 3 – What Brings You Here Today?

Step 2 of 3 – Schedule Your Call

Step 3 of 3 – Your Information

Step 5: Subscribe and Fund

Step 6: Collect Income and Hold

And Then, Someday: The Exit

The Parties to A DST Investment

DST Exit Strategies: When the Trust Sells

Looking For A Qualified Intermediary

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Connect with a Qualified Intermediary

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