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Make Your Equity Generate Cash Flow You Can Live On.

Jack grew up in Suffolk County, New York on a farm. Fortunately, that farm was directly in the path of growth as the suburbs grew after World War II.  When we met he was 60 years old and still living in the house he grew up in on that farm. He was a small-town lawyer getting by, but he owned this farmland with an estimated value close to $60 million and with no debt. He had decided that he was never going to sell his property because it has been in the family for so many years, yet he knew he could do something to improve his standard of living given his illiquid net worth.

Over the course of two years, we continued to speak with Jack about the possibility of spinning off a few pieces of the land at the edge of his property.  We talked about the pros and cons and showed him how he could augment his income substantially and still control most of his land for future generations.

Ultimately, Jack decided to sell a few acres for $10 million and we put together a portfolio for him that netted him about $450,000 per year. He quit his job and started enjoying his life much more.

This is an unusual case, but it demonstrates how an exchange into DST’s can unlock equity turn it into cash flow.  In this case, it was raw land, but in some cases, we have found that clients have become equity rich while cash flow poor. Sometimes property increases in value much faster than the cash flow it can generate. By doing an exchange, you can often release the value of the equity and give yourself a ‘raise.’