After a real estate investor is unable to find a suitable replacement property for a 1031 exchange, DST 1031 Kay Properties & Investments specialists coordinate a successful DST 1031 exchange involving a DST “Zero Coupon” offer.

LOS ANGELES, October 05, 2021 (GLOBE NEWSWIRE) – Kay Properties & Investments recently announced a successful DST 1031 exchange that involved a tight schedule and a big debt replacement challenge. With literally only a few days left on their 45-day 1031 ID deadline, the real estate investor faced a significant tax consequence that would have had a permanent impact on their long-term investment strategy. However, after contacting Kay Properties & Investments, the investor was able to learn about DST 1031 exchanges and get outside advice from their tax lawyer and financial advisor. Simultaneously, Kay Properties’ team of DST 1031 exchange specialists began to create a strategic solution tailored to the customer’s exchange needs.

“One of the hallmarks of Kay Properties is that our registered representatives never consider any DST 1031 exchange to be ‘one size fits all’. Each situation is unique and with our in-depth knowledge of the subject, we can find workable solutions for just about any scenario. In this particular situation, we advised the client to consider with their CPA using a zero coupon DST to fully offset capital gains taxes on their sale of property over $ 1 million. While this is not the first time that we have had to advise clients to use a zero coupon DST as we have been helping clients use them for many years, this is an unusual situation and certainly the least. two evils compared to having to pay a lot of taxes. Said Dwight Kay, Founder and CEO of Kay Properties & Investments.

A zero coupon DST offer typically does not include monthly cash flow, as any rental income is used to pay mortgage principal, taxes, and interest each month. In addition, the average zero coupon bid typically has a loan-to-value ratio of between 70% and 90%, which allows the investor to place a small amount of equity in a DST bid to buy a much larger amount. significant amount of real estate with long leases and holding periods on buildings which generally have top quality tenants.

“In this situation, the client was a sophisticated real estate investor in New York who struggled to find 1,031 quality replacement properties. He had searched nationwide for replacement properties so as not to continue to find viable options. This scenario was exacerbated by the fact that he had a large debt component on the abandoned property that he needed to replace, so getting a mortgage on tight deadlines added to an aggravating problem, ”said Jason Salmon, vice-president. senior chairman and DST 1031. expert with Kay Properties & Investments.

Because he was unfamiliar with DSTs, the Kay Properties team helped educate him on the nature of DSTs, including their respective benefits and risks. Next, Kay Properties helped him identify several viable DST replacement properties that would work within his 1031 timeframe, including a mixed mix of real estate that involved placing a portion of his equity in a zero coupon DST all-in-one bid. by putting the rest of its product in a more moderate loan-to-value ratio of about 50%.

“We spent a lot of time analyzing and discussing options and risk factors with the client on how they might match the equity and debt components for their 1031 exchange. Using a mix of DST investments with varying degrees of leverage, the client was able to achieve their 1031 goals. The client was delighted to find that he could invest his hard earned trade dollars in quality, passively managed, institutional grade real estate investments. The only thing he said he would have liked to have done differently was to contact Kay Properties earlier, ”said Salmon.


Kay Properties is a Delaware Statutory Trust (DST) national investment company. The The platform provides access to the DST marketplace of over 25 different sponsor companies, custom DSTs only available to Kay customers, independent advice on DST sponsor companies, due diligence and full verification of each DST (typically 20 -40 DST) and a DST aftermarket. Kay Properties’ team members collectively have over 115 years of real estate experience, are licensed in all 50 states, and have participated in over $ 15 billion in DST 1031 investments.

* Diversification does not guarantee profits or protect against losses.
* This case study may not be representative of the experience of other customers. Past performance does not guarantee or indicate the likelihood of future results. Please consult your lawyer and CPA before considering an investment.

This document does not constitute an offer to sell or a solicitation of an offer to buy securities. Such offers can only be made through the confidential Private Placement Memorandum (the “Memorandum”). Please read the entire Memorandum, paying particular attention to the section on risks before investing. IRC Section 1031, IRC Section 1033 and IRC Section 721 are complex tax codes. Therefore, you should consult your tax or legal professional for more details regarding your situation. There are significant risks associated with investing in real estate securities, including illiquidity, vacancy, general market conditions and competition, lack of operating history, interest rate risks, general risks of owning / operating commercial and multi-family properties, financing risks, potential adverse tax consequences, general economic risks, development risks and long holding periods. There is a risk of losing all of the invested capital. Past performance is no guarantee of future results. Potential cash flows, potential returns and potential appreciation are not guaranteed. Securities offered through Growth Capital Services. FINRA / SIPC member. Kay Properties and Investments, LLC and Growth Capital Services are separate entities.

Media contacts for more information:
Cary Brazeman, 310-205-3590, [email protected]
Victoria Ozols, 310-205-3590, [email protected]

Leave a Reply

Your email address will not be published.