DST-UPREIT.com

Archives: FAQs

  • What is Section 731 (a) gain?

    by

    Michael S

    A liquidating distribution is an actual or constructive distribution that terminates a partner’s entire interest in partnership. Generally, neither a partnership nor a partner recognizes gain or loss when the partnership distributes money or other property to liquidate the partner’s interest in the partnership. 731(a) Partners In the case of a distribution by a partnership…

  • What is a last dollar guarantee?

    by

    Michael S

    A bottom or “last dollar guarantee” does not result in liability for the guarantor unless the lender fails to receive a stated minimum repayment (e.g., on a $10 million loan with a $1 million bottom guarantee, the guarantor’s obligation to pay does not arise unless the lender fails to receive at least a $1 million…

  • What is a first dollar guarantee?

    by

    Michael S

    A top or “first dollar guarantee” assures the lender that the guarantor will pay the first dollars of debt that the partnership is unable to pay (e.g., on a $10 million loan with a $1,000,000 top guarantee).

  • What is a vertical slice guarantee?

    by

    Michael S

    A vertical slice guarantee obligates the guarantor partner to pay a fixed percentage of every dollar of the partnership liability to which such obligation relates or if there is a right of proportionate contribution running between partners or related persons who are co-obligors with respect to a payment obligation for which each of them is…

  • How do REITs and UPREITs impact my tax situation?

    by

    Michael S

    REITs lead to taxable dividends, whereas UPREITs can offer deferred tax benefits under certain conditions.

  • What are the risks involved with REITs and UPREITs

    by

    Michael S

    Both investment types involve market risks, but UPREITs also carry the complexity of managing and valuing contributed properties.

  • Can I invest in an UPREIT without owning property?

    by

    Michael S

    Yes, but it’s more indirect. You would typically invest in a REIT that participates in an UPREIT structure.

  • What occurs once a DST property is sold?

    by

    Michael S

    After the sale of a DST property, each investor receives their proportional share of the sales proceeds, aligning with their original investment and including any potential gains. Following this, investors have the choice to reinvest into additional DSTs, switch to a different investment property, pay taxes, or opt for a mix of these options.

  • Is there a guarantee on returns from DSTs?

    by

    Michael S

    Owning a DST is akin to directly owning real estate as an investment. Consequently, returns are not assured. Some offerings emphasize the predictability of possible income, like net lease offerings, because of the lease’s length and corporate guarantees on the leases. However, it’s important to understand that returns from DSTs are never fully guaranteed.