Due Diligence
Striving to Unlock Wealth Through Strategic Tax Deferral
We take immense pride in our comprehensive due diligence process. To explore our detailed analysis, we invite you to book a meeting with us. Here are some of the key elements we meticulously evaluate:
Available Offerings
We track over 300 variables per 1031 offering on our platform. We are constantly analyzing the commercial real estate landscape looking for trends and value by location, asset class, Sponsor etc. Some of the many variables we track are:
Management
- Of both the property manager and Sponsor (/asset manager), for the asset class(es) & location(s)
Financial Pro Forma
- Projected rent, expense, and NOI growth vs submarket projections
Appreciation potential
- By evaluating potential NOI growth & future cap rates – utilizing tools such as CoStar for better projections
Purchase Price
- Compared to the Submarket average / COMPS, vs appraised value, per renter/unit, per square foot, purchase timing
Loan Analysis
- Interest rates, fixed or adjustable, IO or amortizing, assumable or not, etc.
Property(/ies) Specific
- Property Condition Reports, Phase I Environmental, Natural Disaster Hazards, etc
- Location analysis – population growth, household incomes, crime statistics
Past Offerings
With a comprehensive monitoring system for over 1,100 closed DST offerings, including 250+ “Full Cycle” and 850+ “Operating” 1031 offerings, we provide unparalleled insights into sponsor performance and investment outcomes. This extensive data analysis, focusing on key metrics such as average annualized returns, total return on equity, hold times, and projected vs. actual performance, empowers our clients to make informed decisions. By leveraging this detailed performance data, investors can confidently navigate their 1031 exchanges and maximize their investment potential.
250+ “Full Cycle” 1031 Offerings
“Full Cycle” means the Sponsor
- Purchased the asset(s)
- Raised equity from 1031 investors,
- Operated the property & paid investors distributions
- And then sold the asset & returned money to investors
Most useful data for analyzing a Sponsors’ ability to perform. Looking at variables such as:
- Average annualized returns – cash flow + appreciation on equity
- Total Return on Equity
- Hold Time – often 4-7 years
- Asset Class, Location, Business Plan, Leverage, etc.
850+ “Operating” 1031 offerings
“Operating” means the Sponsor
- Purchased the asset(s)
- Raised equity from 1031 investors
- And is currently in the process of operating the asset(s) for investors
Most useful data for analyzing a Sponsors’ ability to perform. Looking at variables such as:
- Sponsor projected distribution rate vs actual
- Sponsor projected Net Operating Income (NOI) vs actual
- By…Asset Class, Location, Business Plan, etc.
Sponsors
With over 50 active sponsors in the DST space, our comprehensive analysis provides investors with critical insights into each sponsor’s operations, financial health, and track record. By examining high-level data such as headquarters, founding year, investor base, and business plans, along with balance sheet strength and real estate-specific metrics, we ensure our clients are well-informed. This detailed evaluation of sponsors’ historical capabilities to manage assets, withstand economic downturns, and deliver consistent returns empowers investors to make confident, strategic decisions in their 1031 exchanges and real estate investments.
High-Level Data
- Headquarters & office locations
- Year founded, first real estate, and first 1031 program
- Number of Investors & Employees
- Past & future business plans
Balance Sheet
- Size in Billions
- Diversification by business line
- Ability to step in for 1031 investors during down-turns (“demand notes”)
Real Estate Specific
- Current real estate assets under management
- 1031 track records – full cycle & operating, by asset class, location, business plan, etc.
- Other real estate fund track records – business plans, average hold time, annualized rate of returns
- REIT track record – distribution rates, redemption terms, and 2-step plans now or in the future
- Forward looking business plans – thoughts/projections on the real estate space, likely plan going forward
