Property Paths
Passive real estate income appeals to Fort Worth, Texas investors who want the tax advantages and cash flow of real estate ownership without the day to day responsibilities of managing tenants and ...
Passive real estate income appeals to Fort Worth, Texas investors who want the tax advantages and cash flow of real estate ownership without the day to day responsibilities of managing tenants and maintenance. A triple net leased property, where the tenant covers property taxes, insurance, and maintenance in addition to base rent, is one common path to passive income through direct ownership, since the landlord's role is largely limited to collecting rent and monitoring lease compliance. Direct ownership of a triple net property remains fully eligible for a 1031 exchange, since it is a direct interest in real property held for investment purposes.
A Delaware Statutory Trust, often referred to as a DST, offers an even more passive path to real estate income. In a DST, a professional sponsor manages a portfolio of properties, and investors hold a beneficial interest in the trust rather than direct title to the underlying real estate. The IRS confirmed in Revenue Ruling 2004 86 that a beneficial interest in a properly structured DST is treated as a direct interest in real estate for purposes of Section 1031, which means an investor can exchange out of actively managed property and into a DST interest to defer capital gains tax while eliminating landlord responsibilities. DST structures are subject to a set of restrictions sometimes called the seven deadly sins, which limit the trust's ability to raise new capital, renegotiate leases, or reinvest sale proceeds once the offering closes, and investors in Fort Worth considering this path should understand these restrictions before committing funds.
Because DST interests are securities, any specific DST offering discussed with an investor involves a securities transaction, and we do not sell securities directly. We provide introductions to licensed providers who can offer specific DST opportunities and handle the securities side of a transaction, while our role is limited to helping investors understand how passive structures fit into a broader 1031 exchange strategy for their portfolio near Fort Worth and across the Dallas Fort Worth metroplex.
Explanation of triple net lease ownership as a path to passive income
Overview of Delaware Statutory Trusts and their 1031 eligibility under Revenue Ruling 2004 86
Discussion of the operating restrictions that apply to DST structures
Clear disclosure of the securities nature of DST interests and our introduction only role
Fort Worth, TX investors nearing retirement who want to reduce hands on property management
Investors considering an exchange from an actively managed rental into a passive DST interest
Investors comparing triple net lease ownership against DST structures for passive income
A Delaware Statutory Trust, or DST, is a structure in which a professional sponsor manages a portfolio of real estate and investors hold a beneficial interest, allowing them to receive real estate income without direct landlord responsibilities.
Yes. Revenue Ruling 2004 86 confirmed that a beneficial interest in a properly structured DST is treated as a direct interest in real estate for Section 1031 purposes, allowing investors to exchange into a DST to defer capital gains tax.
DST structures are subject to a set of operating restrictions, often called the seven deadly sins, which generally prevent the trust from raising new capital, renegotiating major leases, or reinvesting sale proceeds once the offering has closed.
Yes. DST interests are securities, and we do not sell securities. We provide introductions to licensed providers who can offer specific DST opportunities and handle the securities aspects of any transaction.
Yes. Direct ownership of a triple net leased property, where the tenant covers taxes, insurance, and maintenance, remains a direct interest in real property and is fully eligible for a 1031 exchange.
Example of the type of engagement we can handle
Service Type
Passive Income Structure Education
Location
Fort Worth, TX
Scope
Educational overview of triple net lease ownership and Delaware Statutory Trust structures as paths to passive real estate income within a 1031 exchange
Client Situation
An investor in Fort Worth, TX was tired of managing tenants directly and wanted to understand passive alternatives that would still allow a 1031 exchange to defer capital gains tax.
Our Approach
We explained how triple net lease ownership and DST interests both preserve 1031 eligibility, discussed the operating restrictions that apply to DST structures, and outlined that any specific DST offering would involve a licensed securities provider.
Expected Outcome
The investor understood the passive structures available within a 1031 exchange and the securities related considerations before pursuing next steps with a licensed provider.
Contact us to discuss your situation in Fort Worth, TX. We can share references upon request.
These paths often pair with Passive real estate income appeals to Fort Worth, Texas investors who want the tax advantages and cash flow of real estate ownership without the day to day responsibilities of managing tenants and maintenance. A triple net leased property, where the tenant covers property taxes, insurance, and maintenance in addition to base rent, is one common path to passive income through direct ownership, since the landlord's role is largely limited to collecting rent and monitoring lease compliance. Direct ownership of a triple net property remains fully eligible for a 1031 exchange, since it.
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Identification rules
These rules protect exchange buyers in Fort Worth, TX. Each option is valid when you follow the written delivery requirements outlined by your Qualified Intermediary.
Three property rule
Name up to three properties of any value. Provide full legal descriptions and keep backups of delivery receipts.
Two hundred percent rule
Name more than three properties as long as aggregate fair market value stays under 200 percent of the relinquished price.
Ninety five percent rule
Identify any number of assets and close on at least 95 percent of the total value you listed.
Educational content only. Not tax, legal, or investment advice. If a DST or TIC structure is discussed, note that we do not sell securities. We provide introductions to licensed providers only.
Our team is ready to help you navigate the 1031 exchange process with confidence.
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