Fortitude's Insights

The Delaware Statutory Trust: A Practical Solution for Legacy Planning

Posted by Roy Pfleger on Nov 29, 2018 4:31:17 PM

The Delaware Statutory Trust (DST) is gaining popularity as a viable solution for accredited real estate investors seeking replacement property for their 1031 exchanges. For those unfamiliar, a Delaware Statutory Trust is a legal trust structure under Delaware law recognized under Revenue Ruling 2004-86 that offers accredited investors fractional ownership of beneficial interests to satisfy their 1031 exchange needs.

A DST comes to accredited investors as a package program that offers them potential annual income, credit for any nonrecourse debt associated with the DST, the potential for appreciation or equity growth all while being managed by major real estate institutions within the United States. As the commercial real estate market continues to appreciate, real estate investors want to take advantage of their highly appreciated asset(s) but struggle to find replacement property.

This story is not just for the “mom-and-pop” real estate owners!

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Topics: Delaware Statutory Trust

1031 Exchange Utilizing the DST: Information For Real Estate Sellers

Posted by Jeffrey Kiesnoski on Oct 23, 2018 5:16:00 PM

In a time when property sales are beginning to heat up again in hot markets across the United States, many sellers are stuck with selling their properties only to make lateral moves for the sake of completing their 1031 exchange. What many sellers, along with their professional real estate attorneys, CPAs and Qualified Intermediaries, are not familiar with is the 1031 securitized real estate exchange utilizing the Delaware Statutory Trust (DST) that is available to accredited investors only.

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Topics: Delaware Statutory Trust, 1031 Exchange

Fortitude Investment Group, LLC Announces Another Successful 1031 Real Estate Exchange Utilizing the DST

Posted by Daniel Raupp on Sep 26, 2018 12:56:00 PM
Fortitude Investment Group, LLC Is Proud to Announce Another Successful Full Cycle 1031 Real Estate Exchange Utilizing the Delaware Statutory Trust, DST, for Their High Net Worth Accredited Investors 
Press Release - Sep 21, 2016 08:21 EDT

New York, NY, September 21, 2016 (Newswire.com) - Co-Founders Daniel P. Raupp, Jeffrey A Kiesnoski and Jon Paul Cirelli of Fortitude Investment Group successfully facilitated a Full Cycle 1031 Real Estate Exchange utilizing the Delaware Statutory Trust, DST, for a high net worth, accredited investor with the recent announcement from Inland Private Capital Corporation disposition of a FedEx ground facility in Zionsville, Indiana.

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Topics: Delaware Statutory Trust, 1031 Exchange

1031 Real Estate Exchanges & Alternative Options

Posted by Jeffrey Kiesnoski on Jul 12, 2018 10:25:00 AM

Simply put, in the real estate industry, a 1031 real estate exchange is a switch of one real estate asset for another investment property that is not personal (such as a primary residence).

If you have a profit on an investment property that you are relinquishing, you will most likely be subject to capital gains tax. Depending on what state you live in, this tax can be north of 30%. Under current policy there is no limit to the amount of 1031 exchanges you can facilitate. In other words, “Swap till you Drop”.

Fortitude Investment Group believes this is one of the greatest estate planning tools afforded to real estate investors due to the stepped-up cost basis on inherited assets.

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Topics: Delaware Statutory Trust, 1031 Exchange

Fortitude Investment Group, LLC. Executes Record Investment for a Family’s 1031 Exchange into a DST Real Estate Portfolio

Posted by Daniel Raupp on Dec 11, 2017 5:48:11 PM

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.

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Topics: 1031 Exchange, Delaware Statutory Trust

Condemned Property and a 1031 Exchange

Posted by Daniel Raupp on Jun 24, 2017 12:15:00 PM

If a property will be condemned in the future and the landlord will receive a condemnation award, should they do a 1031 exchange with the proceeds and buy a new property?

Keep in mind, the 1031 option may be restrictive. With the 1031 exchange, the landowner cannot take possession of the money; instead the money must go directly to a Qualified Intermediary (QI) to qualify for a 1031 exchange. If the condemnation award check is made out to the landowner, a 1031 exchange is no longer an option.

Additionally, once he gets the condemnation award, he has 45 days to identify a property. The landowner is locked into the subject property and then has 135 days to close. In other words, he has only 180 days to identify and close on a property.

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Topics: 1031 Exchange, 1033 Exchange, Delaware Statutory Trust

Why High Net Worth Real Estate Investors Are Choosing DST Investments for Their Real Estate Exchange

Posted by Daniel Raupp on Nov 7, 2016 4:36:00 PM

New York, NY, November 17, 2016 (Newswire.com) - Fortitude Investment Group, LLC. was founded by Daniel P Raupp, Jeffrey A. Kiesnoski and Jon Paul Cirelli.  Our firm is a fully independent alternative investment firm focused on educating our clientele in tax-advantaged and tax-efficient, asset-backed investment vehicles.

Our philosophy for accredited investors looking for 100% passive, institutional-quality replacement properties is based on preservation of capital and predictable tax-efficient income investment vehicles. 

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Topics: 1031 Exchange, Delaware Statutory Trust

What You Need to Know About 1031 Exchanges

Posted by Daniel Raupp on Nov 2, 2016 11:24:01 AM
While Section 1031 of the tax code is little known, it is starting to make its way into the lexicon of investors across the country.  Usually, they will say, "let’s 1031 that building." However, Section 1031 is not just for real estate – even though it is where it is most commonly used.  So, what is a 1031 and why do you need to know about 1031 exchanges?  This article will take a deeper look and try to give you some more insight on this fast-growing tax-free investment program.

In its simplest terms, a 1031 or a 1031 exchange is a swap of one asset for another. 

Unlike a sale, which is a swap for cash, a 1031 is a ‘"like-kind exchange" which is also known as a Starker. The beauty of these exchanges is that they limit the amount of tax due.  This means that under the eyes of the IRS, you will not recognize any capital gains from the transaction.  As you can see, this can be a powerful tool to defer taxes as you can roll the gains from one investment into another.  This can continue until you sell the final asset.

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Topics: 1031 Exchange, Depreciation Recapture, Delaware Statutory Trust

Delaware Statutory Trust (DST) Versus Tenant-In-Common (TIC) Ownership

Posted by Jeffrey Kiesnoski on Aug 5, 2016 3:49:15 PM

Investors desiring the tax deferral benefits of 1031 exchanges coupled with the advantages of fractional ownership are increasingly seeking the popular alternatives of Tenant-In-Common (“TIC”) or Delaware Statutory Trust (“DST”) co-ownership. Recently, DSTs have been gaining in popularity for a number of reasons including the ability to secure financing more easily and attract more investors with lower minimum investment threshold amounts.

Let’s look at some of the attributes of DST fractional ownership and how DSTs differ from TIC ownership.

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Topics: Delaware Statutory Trust, Tenant-In-Common

Fortitude Investment Group LLC Announces the Launch of Their New 1031 DST Website

Posted by Jeffrey Kiesnoski on Jun 1, 2016 8:56:01 PM

PORT JEFFERSON, N.Y., June 1, 2016 /PRNewswire/ -- Fortitude Investment Group, LLC, is proud to announce the launch of their new website www.1031DST.com that is focused on educating and partnering with accredited real estate investors, qualified intermediaries, real estate attorneys, and CPAs. These partnerships will help facilitate 1031 exchange transactions utilizing a Delaware Statutory Trust (DST) to defer taxes on the sale of investment real estate while becoming a passive investor.

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Topics: Delaware Statutory Trust, 1031 Exchange

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 or $200,000 income individually/$300,000 jointly of the last three years) and accredited entities only. If you are unsure if you are an accredited investor and/or an accredited entity please verify with your CPA and Attorney. There are risks associated with investing in real estate and Delaware Statutory Trust (DST) properties including, but not limited to, loss of entire investment principal, declining market values, tenant vacancies and illiquidity. Diversification does not guarantee profits or guarantee protection against losses. Potential cash flows/returns/appreciation are not guaranteed and could be lower than anticipated. The information herein has been prepared for educational purposes only and does not constitute an offer to purchase or sell securitized real estate investments. Because investors situations and objectives vary this information is not intended to indicate suitability for any particular investor. This material is not to be interpreted as tax or legal advice. Please speak with your own tax and legal advisors for advice/guidance regarding your particular situation. 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 products offered through Concorde Insurance Agency, Inc. (CIA). Fortitude Investment Group is independent of CIS, CAM and CIA.

About This Blog

With over 100+ years of combined experience facilitating 1031 exchanges, including the largest 1031 exchange utilizing DST’s in our industry, we are your trusted partners in helping you achieve success.  We believe that education and service matter, and we are committed to providing our clients with the resources required to facilitate the entire exchange process.

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