Passive Real Estate Ownership
For accredited investors who want to own real estate and defer tax without the work of being a landlord, and an honest picture of the risks involved.
Many investors want the same thing: capital working for them, producing potential income, without a second job managing tenants and repairs. Income-producing real estate can pursue that goal, but no investment is free of risk, and understanding the trade-offs matters as much as the potential upside. This page explains how passive real estate investing works, what it can and cannot do, and where the risks are.
How passive real estate investing works
You own real estate, not a second job
Through a Delaware Statutory Trust (DST) you own a fractional beneficial interest in larger, professionally managed property. A sponsor handles tenants, financing, maintenance, and the eventual sale, and you have no day-to-day management role. You also have no say in those decisions.
Income comes from rent, not a promise
Any distributions a DST pays come from the property's rental income. They are potential distributions, not guaranteed payments, and they can vary, be reduced, or stop with occupancy, expenses, and market conditions.
Diversification instead of one big bet
Because interests are fractional, an investor can spread capital across several DSTs that differ by asset class, geography, and sponsor, rather than concentrating everything in a single building. Diversification does not assure a profit or protect against loss.
Tax deferral keeps more capital invested
When the capital comes from selling appreciated investment real estate, a 1031 exchange can defer capital gains tax by reinvesting into like-kind property, including DST interests. The tax is deferred, not eliminated, and it can become due when the replacement property is later sold outside an exchange.
What it can offer, and what it can't
Structures like Delaware Statutory Trusts are designed to offer potential distributions, professional management, diversification, and, for investors coming from a property sale, the ability to defer capital gains tax through a 1031 exchange. What they cannot offer is any assurance of results. Distributions depend on the underlying property's performance, interests are illiquid and not traded on an exchange, fees reduce returns, and investors can lose some or all of their investment. These are long-term investments, not savings products, and they are generally considered as one part of a diversified plan.
DST interests are offered only by private placement memorandum to accredited investors. They are speculative and illiquid, distributions are not guaranteed, fees reduce returns, and investors can lose some or all of their investment.
Is it right for you?
Passive real estate investments such as DSTs are securities offered under Regulation D and only to accredited investors. Suitability depends on your income, net worth, time horizon, and objectives. This page is general educational information, not tax, legal, or investment advice. Talk with your own tax and legal advisors before investing, and read each offering's private placement memorandum and risk factors in full. Specific offerings are never shown publicly. They are discussed only one to one, after Toni has established that you are an accredited investor and that a DST may be suitable.
Common questions
How can I own real estate without being a landlord?
Fractional, professionally managed structures such as Delaware Statutory Trusts let accredited investors own a beneficial interest in real estate and receive any pro rata distributions without handling tenants, repairs, or day-to-day management. In exchange you give up direct control and easy liquidity, and distributions and returns are not guaranteed.
Are the returns on passive real estate investments guaranteed?
No. Distributions and appreciation on real estate securities are not guaranteed. Income can fall or stop, and you can lose some or all of your investment. Any projection in an offering document is an estimate, not a promise, and past performance does not indicate future results. Review each offering's risk factors before investing.
Who can invest in a DST?
A DST interest is a security. DST interests are offered by private placement memorandum under Regulation D, and only to accredited investors, broadly those meeting income or net-worth thresholds set by the SEC or holding certain professional licenses. Whether a DST is suitable depends on your financial situation and objectives.
How much money do I need to start?
DST minimums are fractional compared with buying a whole property, and they vary by offering. The exact minimum and terms are set out in each offering's private placement memorandum.