We continue with our series of educational posts for January 2026 and one of the first questions we get from investors may be “am I the right investor for a Delaware Statutory Trusts (DST)”. As a brief introduction DSTs should not be a blanket recommendation for all investors.
January 22, 2026
By Al DiNicola, AIF®
1031 Tax Deferred Exchange Specialists & DST Advisor
NAMCOA® – Naples Asset Management Company®, LLC
Securities offered through MSC-BD, LLC, Member of FINRA/SIPC
However, for the right investor they could be a solution to a current our future problem they anticipate, and it may just be transformational.
So, the question may be how I know if I am an ideal investor and do, I actually fit the profile. For direct cash investors Delaware Statutory Trusts may be the only way that they could invest small sums of money and get the benefits of real estate investment. We will focus on the benefits of executing a §1031 exchange utilizing a DST. However, there are direct cash investors that will move into a DST for a number of reasons. We have investors that are looking and searching for where to put smaller sums of money, maybe as small as $25,000. Even this amount placed into a DST may provide the benefits of real estate investment along with a potential distribution on a monthly basis. Many of the DST require minimum investments of $100,000 for 1031 exchange participants. However, for direct cash investors that amount may be as little as $25,000. If the DST has any type of non-recourse debt, the investor would also be able to have tax favored returns from their investment. We will cover direct cash investment into DSTs in the future post.
So overall who would the ideal investor be and what would be their profile? We see real estate investors who have been landlords for numbers of years and now look at retiring from being a landlord. They would move from active management into passive management role. Many of these investors may be looking at executing a 1031 exchange to defer capital gains until future period of time. There’s another group of investors who are selling a business and the business has a value and many times the value may be bifurcated in the goodwill of the business as well as real estate that is owned. Investors in this position may elect to execute a 1031 tax deferred exchange on the real estate owned. The business owner through exit planning may seek other structures with the proceeds from the business sale. DSTs may also become a valuable estate planning tool that would focus on building generational or family wealth. There may be other investors who are looking at selling one large real estate investment and diversifying into smaller sized DST’s that may provide product mix or asset class mix as well as geographic diversification. DSTs are for accredited investors only. This does not mean that all accredited investors are suitable for DSTs. Advisors and representatives who deal on a daily and weekly basis with DSTs we’ll recognize this suitability issue and only recommend DST’s that align with investor’s goals and objectives.
Who Should Avoid DSTs
There are a group of investors who should not consider DSTs. These would be investors who are short-term investors and who may need liquidity. As we have reviewed in other posts, the sponsor or operating management companies control the DST. This may become an issue if trying to negotiate and exit prior to the anticipated sale of the property which is controlled by the sponsor.
There are many reasons why this could matter in 2026.
There are pros and cons on whether or not we will experience market volatility in 2020. There is a degree of uncertainty with regards to interest rates and how that will affect the acquisition and disposition of real estate owned by individual investors as well as institutional investors the demographics of the current landlord’s viewpoint into the direction of moving from active management to passive management. This may make DSTs increasingly relevant. In the past this may have been referenced as the baby boomer effect.
Conclusion
So, there may be many different types of investors who will seek out DST’s, perform due diligence, engage in constructive conversations with advisers and not move forward with the DST. However, fully understanding the benefits and drawbacks of the DST may help an investor determine if they are the right candidate for a DST. Based on our experience, The ideal DST investor values income, tax efficiency, and simplicity over control.
As always contact us for more information and a complimentary consultation.
NAMCOA® is a SEC registered investment advisory firm that provides comprehensive portfolio management, financial planning, and fiduciary decision-making services on behalf of retirement plan sponsors. Our Difference is summarized by our fiduciary approach which enables us to better meet portfolio and retirement plan objectives, resulting in stronger risk adjusted returns for investors and peace of mind for Clients. We also focus on alternative real estate investment. Many real estate investors are seeking tax deferred solutions utilizing §1031 exchanges or Opportunity Zones.
Alternative investments and DSTs are not for all investors. The acquisition of a certain alternative investments including DSTs is for accredited investors only. Contact your investment adviser for additional details on how a DST may be a solution to your §1031 Exchange and suited for your investment future. For more information on how to properly set up an IRC §1031Tax Deferred Exchange or if you are an accredited investor and would like additional information on a DST contact Al DiNicola at 239-691-8098 or email adinicola@namcoa.com.
This is not an offer to purchase or solicitation to purchase any security, as such be made only through an offering memorandum or prospectus. Investing in securities, real estate, or any investment, whether public or private, involves risk, including but not limited to the potential of losing some or all your investment dollars when you invest in securities. You should review any planned financial transactions that may have tax or legal implications with your personal tax or legal advisor. NAMCOA, LLC is a Registered Investment Advisor, regulated by SEC (Securities and Exchange Commission). Our company mailing address is 999 Vanderbilt Beach Road, Suite 200, Naples Florida 34108. Securities Offered through MSC-BD, LLC, Member of FINRA/SIPC. 5 Centerpointe Drive, Ste. 400 Lake Oswego, OR, 97035MSC-BD, LLC and NAMCOA are independently owned and are not affiliated.
Thank you.
