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DST as A Backup Strategy for Your 1031 Exchange 45-Day Deadline

Bill and Amanda started their 1031 exchange with the intention of purchasing two investment condos in Florida.  Their search began to sour as they found the Florida condo market was much more expensive than they thought. Also, insurance costs were steadily rising there because of all the storms in recent years. Feeling less confident they would find and close on two condos within their 1031 time constraints, they turned to us for a DST backup strategy in case they failed in their search.

In fact, the DST works perfectly as a backup strategy for exchangers. There is no closing risk because the DST sponsor already owns the property. We take this strategy very seriously, because the DST quite often saves the exchange. In many cases, it even becomes the primary choice.

As their 45-day identification deadline was approaching, they had offers out on 2 condos, but they also prudently listed 2 of our DSTS’s as backups. We employed the 200% identification rule to satisfy the identification guidelines. (SEE MORE ON 1031 IDENTIFICATION RULES HERE)

In the end, they were thrilled they had the DST’s identified. One condo seller had remorse and started 11th hour negotiation for a higher price and the other took a higher offer. Bill and Amanda would wind up closing on both DST’s and couldn’t be happier.