As a very successful insurance agent, Tim had very little spare time. As a husband, he and Becky travelled together and I never attended a social gathering where I saw only one of them. Their names were almost always mentioned together separated only by the word “and.” A father of two, Tim rarely missed a school-sponsored event involving his children.
He served on various committees including the hospital board and his church finance committee. He was a past president of the Chamber of Commerce, the Rotary and his college alumni association. He served on the city council. Every year, he and his wife spent a week at the Million Dollar Round Table Conference where he, more often than not, received his well-earned top-producer award. He had not missed the opening weekend of deer season in 20 years.
Tim was a busy man.
One day, the opportunity to buy 100 acres of land on the outskirts of town came across his desk. He and Becky decided to invest in a place that, someday, might become their homestead. Miles from town, the property had frontage on a two-lane road leading to the smallest town in the county. It would be years, if ever, before urban sprawl reached them. Tim could hunt and Becky could enjoy her horses. It was a dream and together, as a family, they were working toward making it a reality.
It is the largest builder of retirement neighborhoods in the USA. Their neighborhoods are built with the senior citizen in mind. Sometimes referred to as “active adult” communities, they are, in reality, towns with cruise ship amenities. The builder begins buying hundreds of adjacent acres with the plan of constructing thousands of homes. Then, the company markets to retirees across the nation to move to their newly constructed modern “city.” It is a fast-paced process.
The plan revealed the main entrance to their subdivision would be located on the two-lane road. Of course, the two-lane would need to be expanded to five lanes and two shoulders, eventually. After all, over 13,000 residents would come to live there. The acquisition team discovered the owners of each parcel needed to create the “city.” Tim’s 100 acres sat where their planned entrance began.
Tim and Becky had owned the acreage for a while, but had not built on it. The company wanted and needed their land, so the offer was more than the couple dreamed possible…and they were big dreamers. They still lived in town, so selling to the planned development would be good for them financially and help their community grow. However, the taxes would be of great concern. Tim was already paying twice more in taxes than he and Becky made their first year of marriage. This land sale would bump up their tax bill even more.
There was enough money at closing to purchase their dream ranch. So, they used a portion of the proceeds to do just that. The birds, the deer, the horses and the rolling hills exceeded their expectations. It was a beautiful place. The boot (remaining money still sitting with Qualified Intermediary, in this example) would have been taxed. He thought, briefly, about buying a few rent houses. Too busy to add the title “landlord” to his resume, Tim sought and found a DST. The cash from the boot money that he and Becky placed into their Delaware Statutory Trust paid the taxes, maintenance and insurance on the ranch. Most importantly it helped them defer thousands of dollars in unwanted taxes. Tim returned to selling insurance while he and Becky enjoyed their ranch for years.
Google “Things Busy People Need” and about 741,000,000 results appear. Delaware Statutory Trust doesn’t even appear on the first few results pages. It is a profound reason we read, discover and inquire beyond the internet. We need the truth.
The truth is that suitable people who own land, which may not be producing income, are considering DSTs as a solution and they’re doing it at an increasingly popular pace1. These individuals are exchanging land into DSTs which defers taxes and has the potential to produce monthly income. Securitized real estate, like a DST, allows an investor to give up the headaches of being a landlord and move into a passive role. We encourage our investors to discover the truth about Delaware Statutory Trusts and how they work. We know we can help because it’s what we do professionally.
We understand your search for freedom. Educate yourself. Search for the truth about taxes. Search for the truth about DSTs. Search for the truth about passive real estate. Where you find the facts, the math and the truth, there you will find the knowledge. We’re only a phone call away and phone calls are free.
The client example provided is for illustration purposes only and does not guarantee the same outcome for all. Individual results may vary depending upon their siltation. Past performance is not a guarantee of future results.
Numerical figures are approximate and for illustration purposes. Names have been changed in this example.