How I Look at a Trans­ac­tion — A 14-Part Investor Edu­ca­tion Series

By Al DiNi­co­la, AIF®
VP, Invest­ment Prop­er­ty Wealth Man­age­ment®
Real­ized Finan­cial, Inc
Co-author, DST Wealth Build­ing
Edi­tor, DSTNews.org
Novem­ber 11, 2026

From the Desk of Al DiNicola, AIF®

Over the years, one les­son has stayed with me: the most use­ful due dili­gence ques­tions usu­al­ly begin with the num­bers behind an offer­ing, not the num­bers high­light­ed on its cov­er. A pur­chase price, pro­ject­ed dis­tri­b­u­tion or expect­ed exit val­ue can be infor­ma­tive, but I want to under­stand what sits under­neath it, which assump­tions must hold true and what hap­pens when they do not. That is the idea behind DST Due Dili­gence Lab. We will fol­low one fic­tion­al trans­ac­tion, Har­bor Point Mul­ti­fam­i­ly DST, and exam­ine it as I would approach an invest­ment discussion—one ques­tion at a time. My goal is not to declare an offer­ing good or bad. It is to help investors under­stand what they own, what they are pay­ing for and what they still need to ask.

Our one fictional case study

Our fic­tion­al Har­bor Point case involves a sta­bi­lized 240-unit apart­ment prop­er­ty pur­chased for $40 mil­lion, with $2 mil­lion in acqui­si­tion, financ­ing and offer­ing costs and $1 mil­lion in ini­tial reserves. Total cap­i­tal­iza­tion is $43 mil­lion, fund­ed with $23 mil­lion of investor equi­ty and $20 mil­lion in mort­gage debt. Illus­tra­tive first-year NOI is $2.4 mil­lion; the fixed, inter­est-only bor­row­ing rate is 5.5%; recur­ring asset-man­age­ment and admin­is­tra­tive costs below NOI are assumed to be $230,000, leav­ing $1.07 mil­lion before dis­tri­b­u­tions and addi­tion­al con­tin­gen­cies. The teach­ing exam­ple assumes a $920,000 first-year dis­tri­b­u­tion (4% of equi­ty). These are invent­ed fig­ures, not a cur­rent invest­ment or a fore­cast.

All esti­mates and cal­cu­la­tions are illus­tra­tive, round­ed and sim­pli­fied. In actu­al offer­ings, own­er­ship allo­ca­tion, fee treat­ment, oper­at­ing cash flow and tax out­comes must be deter­mined from the con­trol­ling doc­u­ments. Noth­ing in this series describes a real spon­sor, offer­ing or secu­ri­ty.

The 14 articles

1. Pur­chase Price vs. Offer­ing Val­ue — Where Did the Investor’s Mon­ey Go?

2. Sources & Uses — Under­stand­ing Every Dol­lar in the DST

3. How Much of My $100,000 Invest­ment Actu­al­ly Buys Real Estate?

4. Under­stand­ing the DST Fee Stack

5. Cap Rate vs. Dis­tri­b­u­tion Rate — They Are Not the Same

6. Debt, LTV and the Investor’s Pro­por­tion­ate Share of Mort­gage Debt

7. Inter­est-Only Loans, Bal­loon Matu­ri­ties and Refi­nanc­ing Risk

8. Read­ing Occu­pan­cy, Rent Growth and Expense Assump­tions

9. Replace­ment Reserves — Is Enough Cash Being Set Aside?

10. Cost Seg­re­ga­tion and Depre­ci­a­tion

11. Spon­sor Track Record — What Should Investors Actu­al­ly Exam­ine?

12. Pro­ject­ed Sale Price and Exit Cap Rate — Test­ing the Assump­tions

13. DST-to-721 Exit — Option, Expec­ta­tion or Require­ment?

14. The Final Invest­ment Check­list

Impor­tant Dis­clo­sures

Sec­tion 1031 exchanges involve com­plex tax require­ments. Investors should con­sult qual­i­fied tax and legal pro­fes­sion­als regard­ing their cir­cum­stances. This arti­cle is for edu­ca­tion­al pur­pos­es only and is not an offer to sell or solic­i­ta­tion to pur­chase secu­ri­ties. Secu­ri­ties offer­ings are made through applic­a­ble offer­ing doc­u­ments.

DST invest­ments and oth­er pri­vate real estate secu­ri­ties involve sub­stan­tial risks, includ­ing illiq­uid­i­ty, financ­ing risks, mar­ket fluc­tu­a­tions, uncer­tain dis­tri­b­u­tions, and pos­si­ble loss of prin­ci­pal. Diver­si­fi­ca­tion does not guar­an­tee prof­its or pre­vent loss­es. Delaware Statu­to­ry Trust (DST) invest­ments involve risks asso­ci­at­ed with com­mer­cial real estate own­er­ship and are not suit­able for all investors. These risks may include, but are not lim­it­ed to, loss of prin­ci­pal, illiq­uid­i­ty, ten­ant vacan­cy, financ­ing risk, inter­est rate fluc­tu­a­tions, prop­er­ty val­ue declines, eco­nom­ic and mar­ket con­di­tions, and risks asso­ci­at­ed with spon­sor and prop­er­ty man­age­ment deci­sions. Please refer to the applic­a­ble Prop­er­ty Pri­vate Place­ment Mem­o­ran­dum (PPM) for a com­plete dis­cus­sion of the risks and con­sid­er­a­tions spe­cif­ic to that offer­ing.

Advi­so­ry ser­vices are offered through Fidu­cia­ry CM, an SEC-reg­is­tered advis­er. Invest­ments involve risk and are not guar­an­teed. Always refer to offer­ing doc­u­ments for full risk dis­clo­sures. Secu­ri­ties offered through Real­ized Finan­cial, Inc., mem­ber FINRA/SIPC. Fidu­cia­ry Cap­i­tal Man­age­ment is a sep­a­rate reg­is­tered invest­ment advi­so­ry firm and is not a sub­sidiary of Real­ized Finan­cial, Inc., or Real­ized.

Nei­ther the Reg­is­tered Rep­re­sen­ta­tive nor the Bro­ker-Deal­er can con­trol or guar­an­tee future deci­sions made by the DST spon­sor, asset man­ag­er, prop­er­ty man­ag­er, ten­ants, lenders, or oth­er third par­ties involved in the oper­a­tion of the prop­er­ty. Past per­for­mance is not indica­tive of future results. For edu­ca­tion­al pur­pos­es only; not tax, legal, secu­ri­ties, or invest­ment advice and not an offer or solic­i­ta­tion to buy or sell secu­ri­ties.