Comprehensive Guide to DSTs - Delaware Statutory Trust

BOOK A STRATEGY CALL

"*" indicates required fields

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

**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.

Untitled*

I agree to all Provident 1031 Terms & Conditions

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

BOOK A STRATEGY CALL

"*" indicates required fields

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

The Parties to a DST Investment

A Delaware Statutory Trust may look simple from the investor’s seat — you contribute capital and receive income — but behind that simplicity sits a small ensemble of parties, each with a defined role. Understanding who does what will help you see how your investment is actually managed, and how it’s protected. Let me introduce the cast.

1031 Exchange Masterclass - Provident 1031 - with Daniel Goodwin

You, the Investor

Start with yourself. As a DST investor, you are the beneficial owner: technically both a grantor of the trust (because you contribute capital to it) and a beneficiary (because you’re entitled to your share of its income).

Your role is twofold and finite: to conduct thorough due diligence before you invest, and then to provide capital. After that, by design, you’re passive. You hold no title and cast no management vote.

The Sponsor: The Linchpin

If there’s one party whose competence and integrity will make or break your investment, it’s the sponsor. The sponsor is the real estate firm that does virtually all the heavy lifting: it sources and acquires the property, arranges financing, forms the trust, contributes the property to it, and packages the whole thing as a securities offering to be sold to investors. Throughout the life of the investment, the sponsor (or its affiliates) typically manages the asset as well.

Because so much rides on the sponsor, choosing the right one is the single most important decision you’ll make. I’ll return to how you vet a sponsor at the end of this chapter.

BOOK A STRATEGY CALL WITH DANIEL GOODWIN

CONTACT FORM

"*" indicates required fields

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

The Trustees: Delaware and Signatory

Every DST has trustees, and it helps to understand the two you’ll most often encounter.

The Delaware trustee exists to satisfy a legal requirement: Delaware law requires that the trust have a trustee who resides in, or maintains its principal place of business in, Delaware. This role, usually filled by a Delaware trust company, is largely ministerial. The Delaware trustee maintains a presence in the state and provides continuity, ensuring the trust survives even if something happens to the other trustee. It does not run the property.

The signatory trustee (sometimes called the managing trustee) is the one who actually administers the trust’s business affairs: making the mortgage payments, issuing distributions to investors, and exercising the limited, high-level oversight permitted by IRS rules. This role is typically held by the sponsor or an affiliate of the sponsor.

Remember from Chapter 4 that the signatory trustee’s hands are deliberately tied: it cannot re-lease the property, refinance, or make discretionary capital decisions, because doing so would jeopardize the trust’s tax status. (Some deals also include an independent trustee, whose narrow role is to protect the lender’s interests.)

The Master Tenant

Here’s where the structure gets clever. Because the seven deadly sins forbid the trustee from signing or renegotiating leases, a DST that owns a property requiring active leasing — an apartment community, say — needs another mechanism to handle the day-to-day. That mechanism is the master tenant.

The master tenant is a special-purpose entity, usually affiliated with the sponsor, that leases the entire property from the DST under a master lease. It then handles operations — signing subleases with actual tenants, collecting rent, managing maintenance, paying expenses — and pays a fixed rent up to the DST, which passes the income through to you.

This arrangement keeps the trust itself safely passive while allowing the underlying real estate to be actively run. (A single-tenant, triple-net property leased to one creditworthy company may not need a master-tenant layer, since that tenant handles everything itself.)

BOOK A STRATEGY CALL WITH DANIEL GOODWIN

CONTACT FORM

"*" indicates required fields

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

The Qualified Intermediary

If you’re arriving at a DST through a 1031 exchange, you’ll already know this party well. The qualified intermediary holds the proceeds from the sale of your relinquished property — you must never take receipt of them yourself — and facilitates the exchange into the DST. The QI’s role here is exactly the same as in any 1031 exchange, which our 1031 Exchange Guide covers in full.

Your Financial Advisor

Finally, because a DST is a securities offering sold through a private placement, it must be offered by a properly licensed professional, a representative of a broker-dealer, or a registered investment advisor. This is the party that helps you evaluate specific offerings, confirms that you meet the accredited investor requirement, assesses whether a given DST suits your circumstances, and places the investment. A good advisor is also your first line of defense in vetting sponsors and scrutinizing deal terms.

Vetting the Sponsor: The Questions That Matter

Since the sponsor matters most, it deserves the most scrutiny. Before committing to any DST, you and your advisor should be able to answer a few pointed questions about the firm behind it:

What is their track record? How long have they been sponsoring DSTs, and how much real estate have they managed?
Have they gone full cycle — through good markets and bad? A sponsor that has successfully acquired, held, and sold DST properties, ideally across different economic climates, has proven something a newer sponsor cannot.
Are the fees transparent and reasonable? You should understand every layer of cost before you invest, and how those costs affect your projected return.
How have their prior offerings actually performed? Past results never guarantee the future, but a candid look at them is revealing.

A sponsor who welcomes these questions is one worth considering. One who deflects them is telling you something too.

With the players introduced, we’re ready to walk through the process itself: how an investment in a DST actually happens, from realized gain to funded interest. That’s the next chapter.

Previous Opportunity

Delaware Statutory Trust Guide

Next Opportunity

BOOK A STRATEGY CALL

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

The Parties to a DST Investment

You, the Investor

The Sponsor: The Linchpin

Step 1 of 3 – What Brings You Here Today?

Step 2 of 3 – Schedule Your Call

Step 3 of 3 – Your Information

The Trustees: Delaware and Signatory

The Master Tenant

Step 1 of 3 – What Brings You Here Today?

Step 2 of 3 – Schedule Your Call

Step 3 of 3 – Your Information

The Qualified Intermediary

Your Financial Advisor

Vetting the Sponsor: The Questions That Matter

Delaware Statutory Trust Guide

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

Looking For A Qualified Intermediary

Schedule Consultation

Connect with a Qualified Intermediary

Schedule a Consultation

Subscribe to Provident 1031

Step 1 of 3 - What Brings You Here Today?

Step 2 of 3 - Schedule Your Call

Step 3 of 3 - Your Information