One might think that passive real estate investments are for the less sophisticated and smaller real estate owners and investors. They would be wrong.
Daniel P. Raupp and his team at Fortitude Investment Group, LLC have just set an industry record by facilitating an investment of $176,000,000.00 worth of real estate proceeds from the sale of a portfolio held by a very successful and real estate savvy family who needed to complete a complex 1031 Exchange.
This individual transaction had multiple moving parts and involved more than twenty entities and six branches within the family.
Fortitude Investment Group is discovering a trend in which the current economic environment has made quality replacement properties more difficult to find.
The platform built by Fortitude Investment Group, www.1031dst.com exposes even the most sophisticated investors to real estate in markets they otherwise may not feel comfortable or have experience in. The website is built to assist those searching for real estate investment solutions in finding quality replacement properties and the resources to do the necessary due diligence in such a market.
Concurrently with this transaction, and with the help of our proprietary website www.1031dst.com, our team of registered representatives simultaneously assisted other accredited investors find suitable replacement properties. These clients were able to meet their needs of completing their real estate exchanges into 100% passive institutional quality Delaware Statutory Trust (DST) real estate properties.
Advantages of Passive Real Estate Investing
Some major advantages of passive real estate investing in DST’s include but are not limited to:
- The ability to diversify into multiple institutional quality assets in many different sectors and geographic regions.
- Assist families with complex estate issues using unique and individualized allocations across multiple programs. There are unique ways to use DST and Tenant in Common (TIC) investments, that provide solutions and organization for some of these intricate issues.
- Non-recourse debt associated with leveraged DST investments potentially grants investors tax benefits from the leverage assumed by the program without needing to be underwritten or approved to acquire the debt.
- Delaware Statutory Trust’s passive nature allows investors to retire from the active management and daily duties of real estate ownership.
Shortly after the completion of this record breaking investment, Jeffery Alan Kiesnoski, Co-Founder & Partner of Fortitude Investment Group, LLC., stated, “The symphony that we completed as a team was composed by Daniel P. Raupp, Managing Partner & Co- Founder of Fortitude Investment Group, LLC. and conducted to completion by Roy Pfleger II, Chief Operating Officer at Fortitude Investment Group, LLC. This was an excellent fit for our firm, as we believe we have many more individuals with this type of expertise on our bench than any other firm of our type. I am extremely proud of this outcome and the client satisfaction that we provided to this ultra-high net worth family. Fortitude, with the help of our partners at Inland Private Capital Corporation, Passco Companies, and Bluerock Capital Markets, as well as many others, are able to react quickly for fire-drill type needs that often surface in the 1031 world.”
See What Our Industry Partners Had to Say About This Record-Breaking Transaction
Professionals that Fortitude Investment Group, LLC has worked with over the years in assisting clients with 1031 exchanges into Delaware Statutory Trusts, have weighed in on the level of professionalism, experience and customer service that Fortitude has been able to offer. These testimonials may not be representative of the experience of others. Past performance does not guarantee or indicate the likelihood of future results. These professionals are giving their opinions and were not compensated for their testimonials.
- “Fortitude’s experience, expertise, customer service, and in-depth understanding of all aspects of the 1031 exchange and DST programs are only some of the reasons as to why a transaction of this size was able to be completed.”
- Keith Lampi | Director | President | Chief Operating Officer | Inland Private Capital Corp
- “In my thirty plus years working with licensed investment advisors and securities licensees, it has been my pleasure to work with, meet, and make friends with many outstanding professionals among whom are the advisors and representatives at Fortitude Investment Group. It has been my good fortune to witness the efforts the people at Fortitude expend to assure that they present to their clients’ quality investment opportunities. It is a credit to Daniel P. Raupp and the other founders that their entire organization is committed to a culture of in-depth study of the needs of their clients, the benefits and drawbacks of each investment program, and the quality and reliability of the sponsors of programs Fortitude approves for presentation.”
- William O. “Bill” Passo | CEO | Founder | Passco Companies
- “Daniel P. Raupp and his team are amongst some of the industry’s top 1031 advisors across the nation and it was to no surprise that a successful outcome of such a large transaction was due to his and his teams experience, expertise, and customer service.”
- Nati Kiferbaum | Vice-President | Capital Markets | Inland Private Capital Corp
- “Asset Preservation, Inc. (API) has a long history with Daniel P. Raupp and his team at Fortitude Investment Group. Over the years they have proven to be some of the best in the business in assisting client’s in the identification and acquisition of DST properties in their 1031 Exchanges. In a recent, very large transaction, they performed flawlessly in placing our clients in not only many, but more importantly, the right assets to acquire and effectively complete the exchange, and defer millions of otherwise taxable dollars. API looks forward to working with Dan and the Fortitude team on many more such successful transactions.”
- Javier G. Vande Steeg | President | Asset Preservation, Inc
- “In the thirty years that I have been involved in various aspects of real estate and private equity investing, working with Daniel P. Raupp and Fortitude Investment Group was one of the most rewarding experiences from start to finish. Their knowledge and professionalism in this industry is impressive, as is the premier customer service that I witnessed was provided to our mutual client. I look forward to continuing to do business with Fortitude.”
- Ramin Kamfar | Founder | Chairman | Chief Executive Officer | Bluerock Real Estate
- “Watching Daniel and the team up north close such a complex exchange has elevated the Fortitude family to a whole new level of success. With the Florida real estate market surpassing its all-time highs from a few years back, we are positioned in a powerful stance to assist the astute investor who is seeking both active and passive solutions to successfully complete his or her exchange(s). The Fortitude family has flourished and excelled through multiple market cycles. I am proud to be part of such a powerful team and am eager to see what the future holds for us!”
- Jon Paul Cirelli |Co-Founder| South-East Director| Fortitude Investment Group
We, at Fortitude, pride ourselves on putting the client first as we attempt to prevent as much of the potential for loss in any investments we offer by partnering with some of the smartest and most diligent professionals in the tax and real estate space. We manage the robust assemblage of real estate and do business with sponsors that have the wherewithal to release high quality real estate offerings for the benefit of our clients. We look forward to serving the needs of future 1031 and 1033 exchanges in the years to come.
As with all investments there are pros and cons and risks to any investment and one should consult with their Real Estate attorney, CPA and Registered Representative to see if a 1031 exchange using a DST is the appropriate avenue to explore.
The acquisition or sale of a Delaware Statutory Trust (DST) for the purpose of a tax-deferred 1031 exchange qualifies for treatment under section 1031 of the Internal Revenue Code ("1031 Exchange"). Investors will be able to sell the existing investment property or beneficial interest in a DST and complete a 1031 exchange into another "like-kind" investment property or beneficial interest in a new DST.
There are risks associated with investing in Delaware Statutory Trust (DST) and real estate investment properties including, but not limited to, loss of the entire principal, declining market value, tenant vacancies and illiquidity. DST 1031 properties are only available to accredited investors (generally described as having a net worth of over $1 million dollars exclusive of primary residence) and accredited entities only.
The information herein has been prepared for educational purposes only, is not a direct recommendation, does not constitute an offer to purchase or sell securitized real estate investments, and is not meant to be interpreted as tax or legal advice. Because investors situations and objectives vary this information is not intended to indicate suitability for any particular investor. Please speak with your legal and tax advisors for guidance regarding your particular situation.
Diversification does not guarantee profits or guarantee protection against losses.
Securities offered through Concorde Investment Services, LLC (CIS), member FINRA/SIPC. Advisory services offered through Concorde Asset Management, LLC (CAM), an SEC registered investment adviser. Insurance offered through Concorde Insurance Agency, Inc. (CIA) Fortitude Investment Group is independent of CIS, CAM and CIA, all of whom are independent from Inland Private Capital Corp, Passco Companies, Capital Markets, Asset Preservation and Bluerock Real Estate.