Can I Use a DST as a Backup Replacement Property?
How investors use DSTs to protect an exchange when a deal falls through.
Yes, often
Under the three-property rule, you can identify up to three properties. Many investors list their target property plus one or two DSTs as fallbacks.
Why it works
DST offerings are already closed on by the sponsor, so if your primary deal collapses late in the 180 days, you may still be able to complete the exchange.
Caveat
DST offerings can sell out. Confirm availability close to your identification date and consider identifying more than one.
Have questions about your situation?
Book a complimentary strategy call with Creative Capital Wealth Management Group.
Schedule a Strategy CallEducational information only; not tax, legal, or investment advice. DSTs involve risk, including loss of principal, and are available only to accredited investors. Consult your own advisors.