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How To Evaluate DST

What How To Evaluate DST In Your 1031 Exchange

Learn How To Evaluate DST And What To Look Out For

When you make the decision that a Delaware Statutory Trust is the best option for you in your 1031 exchange, you need to start reviewing PPM's. What is a PPM and how do you evaluate it? A PPM is a private placement memorandum. These are legal documents that disclose everything about the DST property, fees, appraisal value, debt servicing, locations, demographics, and many more. The PPM's from Delaware Statutory Trust companies can be 200-400 pages long. If you do not know how to review or evaluate the DST PPM, you may be missing out on important things to review in these legal documents. Our team constantly evaluates DST PPM's and does reviews on offerings that are available. We like to evaluate the DST PPM's for our clients so they know exactly what they could be investing in. If you do not know How To Evaluate DST, that's what we are here for! We can show you How To Evaluate DST, or we can do the full review for you. We offer our advisory services to teach you How To Evaluate DST, what to look out for, and how to see if the DST is a suitable investment. We also review how many properties are in the DST, your tax implications, true yield, and the cost of getting into a Delaware Statuary Trust. In this article we will teach you How To Evaluate DST. If you prefer to have one of our representatives evaluate a DST for you, please fill out the form below, or call our office directly at 805-583-2720.

What Look For When Evaluating a DST

If you are speaking to multiple Delaware Statutory Trust companies, they may send you a brochure on the available property, the PPM, or both. If you only receive the brochure on a DST property, you are missing out on reviewing the full PPM, fees, cash on cash returns,  acquisition costs, etc.  When you evaluate a DST based on the brochure, they will only show you what the property looks like, what the offering price is, location, and some demographics of the market the property is on. You will not see the forecasted cash on cash returns, fees, or how the property was acquired in the brochure. In order to do a full evaluation of the DST portfolio, you need to carefully read through the entire PPM. This could take hours to read the entire 300+ page PPM. We evaluate many DST portfolios, we have for years! We know what to look out for, red flags, and key data that would deem the DST investment too high risk for our clients. One of the biggest things to evaluate in a DST portfolio is the cash on cash returns, and the fees. Some high risk DST companies are trying to bait potential investors with high cash on cash returns. Some DST companies have erroneous DST fees in order to justify the high cash on cash returns. In the next paragraph we will review How To Evaluate DST when it comes to looking for high fees and high cash on cash returns. We work with only the top DST companies in the United States, and we evaluate all of the offerings and PPM's prior to offering these properties to our clients. If you would like us to evaluate a DST for you, please fill out the form below or call our office directly at 805-583-2720 and we can give you a review on the offering for you! 

How To Evaluate DST For Fees and Cash On Cash Returns 

If you want to evaluate a DST for Fees, you need to look at the PPM and there should be a bracket that will outline all of the fees in the DST portfolio. Some high risk DST companies will list all of their fees but not give you a sum of the total of fees. If you add up all of the fees, some DST companies can have 10-15% fees if you truly add up all the individual fees within the PPM. When you evaluate a DST from a top company, they will sum and outline all the fees and they will be typically lower than 10%. If you evaluate a DST when it comes to fees, you have to load the DST with higher fees in order to justify a high cash on cash return. These inflated fees will have an impact on your potential appreciation return. If the DST company is offering the portfolio with 15% fees, that means you have to have the property sell at 15% appreciation just to break even. This could have an impact on your subsequent DST when it comes to cash on cash returns. When you learn How To Evaluate DST, you can notice that some Delaware Statutory Trust sponsors are promoting high cash on cash returns to start, but reducing the year income to stabilize at market conditions. When you evaluate the DST PPM you can see the forecasted cash on cash returns. If you see declining cash on cash returns, this could be a direct impact on your overall yield. When you evaluate a DST you can learn how the Delaware Statutory Trust company acquired the property, and how they financed the property. We have evaluated DST portfolios and found some companies are purchasing sub par asset classes, and financing these properties with bridge loans. These are big red flags if you do not know what to look for for when you evaluate a DST portfolio. We take the guess work out of evaluating a Delaware Statutory Trust, and we do the review for you. If you would like one of our representatives evaluate a DST for you, or review some of our available offerings, please fill out the form below or call our office directly at 805-583-2720.


This website is neither an offer to sell nor a solicitation of an offer to buy any security which can be made only by a prospectus, or offering memorandum, which has been filed or registered with appropriate state and federal regulatory agencies, and sold only by broker dealers and registered investment advisors authorized to do so.

Additionally, we cannot offer any of our open offerings unless we have a pre-existing relationship with a customer.  Once we have obtained sufficient information to perform an evaluation of our new customers’ financial circumstances and sophistication in determining his or her status as an accredited investor, we would be able to discuss future offerings once they become available.

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Delaware Statutory Trust Evaluation Team