Finance Bites™
How Does a Qualified Opportunity Zone Work? Could I Benefit From It?
Wally Smith: What, five, six years ago now, they came out with something called a QOZ. What is a QOZ? Jeff Hertz: Qualified opportunity zones was an idea that an individual named Sean Parker, who was the founder of the Napster file sharing or music sharing service back when I was in college in the…
Read MoreI’m a Young Real Estate Investor and I Don’t Want to Manage My Own Rental Properties, Is a DST for Me?
Jeff Hertz: And I guess just to broaden that a second, we talk oftentimes about DSTs, especially like a 721 strategy as being very attractive for somebody in the later phase of life, baby boomers, whatever term you want to use. But what is our whole society trying to get towards? We’re trying to get…
Read MoreDoes a 721 UpREIT Help Me With Liquidity
Wally Smith: Well, to that point, let’s talk about the advent of the 721, the UPREIT, how that works. That’s really recognized now as being the answer for the liquidity solution, but whether it’s compulsory or not, whether it’s an option. I know some of the sponsors require it, but let’s go back, tell me…
Read MoreInstitutional Grade DSTs vs. Privately Owned DST Investments: Pros and Cons
Wally Smith: Okay. More institutional players seem to be getting into the space. I think we both saw a news clip this morning about one of the big companies opening up one of the $3 billion REIT that they were going to be doing. Can you talk about that a little bit? The difference between…
Read MoreWhat to Expect in Returns When a DST Goes Full Cycle
Wally Smith: When one of these things ends, we call it going full cycle, what should somebody expect? They have a DST, one of the pieces that we have is a resource for people to understand, okay, I bought it, now what’s the care and feeding of this thing? What do I have to do?…
Read MoreWhat is the Financial Time Commitment on a DST?
Wally Smith: And most of them are built on a 10 year chassis though, right? Jeff Hertz: Yeah. Exactly. Wally Smith: Is that statutory that it’d be a 10 year period? Jeff Hertz: It’s not. Really to me it’s all about the loan term, and that stems from the fact that when the IRS created…
Read MoreFinding the Right DST Sponsor
Jeff Hertz: The managers of the DST obviously are something you want to spend a significant amount of time researching and feeling comfortable with. Wally Smith: Well, what you said a moment ago about TICs having some element of control. With the DSTs you don’t have any control. Jeff Hertz: Correct. Wally Smith: So you…
Read More1 Advantage of a DST For a Real Estate Investor
Jeff Hertz: So trust law goes back hundreds of years, even pre the United States. So using a trust has a number of advantages for investors investing in a DST. Number one, I guess one advantage is much lower investment minimums. Most program sponsors have a minimum of maybe $100,000, but I’ve even seen DSTs…
Read MoreWhat Does a Delaware Statutory Trust Have to Do With Delaware?
Wally Smith: Absolutely. Let’s talk about DSTs then. That’s a focus of a lot of what we do, although we work with each of these tools out here, but the DSTs seem to have solved a lot of the issues that we’ve talked about there. So you said you’ve been in them just about since…
Read MoreThe Kinds of Tenant in Common Structures and Their Advantages
Wally Smith: We should talk about tenant in common, TICs. TICs have been around forever. There’s some big pros and cons about TICs. What’s good, what’s bad? Why don’t we see them as often anymore? Jeff Hertz: When I first got into the space and I got into the securitized real estate space right when…
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