General Real Estate RiskAll forms of real estate investing are speculative and involve a high degree of risk. Investors should be able to bear the complete loss of an investment. All real estate is generally subject to the risks of increased and ongoing vacancy, problematic tenants, economic downturns, physical damage or loss, unexpected repairs and maintenance, eminent domain, negative rezoning, blight, environmental damage and liability, and overall valuation fluctuations that may be outside of the owner’s control.
Specific 1031 Exchange Risks1031 Exchanges are highly complex and failure to comply with the stringent requirements may result in a complete loss of the desired tax deferral. Investors should carefully consult with independent tax and legal counsel prior to initiating, and while performing, a tax-deferred exchange.There are numerous section 1031 rules and requirements including, but not limited to: seller cannot receive or control the net sales proceeds, replacement property must be like-kind to the relinquished property, the original replacement property must be identified within 45 days from the sale of the property, the replacement property must be acquired within 180 days from the sale of the original property, and the debt placed or assumed on the replacement property must be equal or greater than the debt encumbering the relinquished property.
IlliquidityThere is no significantly established secondary market for syndicated, fractionalized TIC and DST ownership interests. The transfer of these interests may also be legally restricted. Investors should carefully consider both their ongoing liquidity needs and estate planning goals prior to investing in such an interest.
Limited DiversificationMost offerings are for ownership interests in a single property, and any desired diversification must be achieved with other real estate investments.
No Guarantee of PerformanceTCFG Wealth Management, LLC, 1031 Financial, and DST Sponsors do not guarantee ongoing distributions or overall investment performance.
Sponsor-Related FeesThere are significant fees related to the acquisition, syndication, ongoing management, and eventual disposition of any DST real estate offerings. These fees could materially impact the performance of an investment and should be carefully considered prior to any such investment. Fees and expenses are outlined and disclosed in the private placement offering memorandum that is required to be presented prior to any offer of securities.
Leverage-Related VolatilityThe use of leverage in real estate investments may increase volatility and the overall risk of loss.