About the Guest: Warren Thomas

Warren Thomas is a distinguished expert in real estate taxation and investment, known for his extensive background and expertise in Delaware Statutory Trusts (DSTs) and 1031 exchanges. With a career that began as a CPA and auditor at Ernst and Young, he founded his own successful CPA firm in Southern California, focused on small business and tax matters. Currently, Warren is a co-founder of ExchangeRight, a leading firm in the DST space, known for its significant growth and robust investment strategies, managing a portfolio that spans across 47 states.

Episode Summary:

In Episode 125 of the Teaching Tax Flow podcast, hosts Chris Picciurro and John Tripolsky explore the intricacies of Delaware Statutory Trusts (DSTs) with special guest Warren Thomas from ExchangeRight. This episode delves into the mechanics of DSTs as a unique investment vehicle within the framework of a 1031 exchange, highlighting their inherent benefits for investors looking to defer capital gains taxes and reposition their real estate portfolios. Thomas brings his extensive expertise to the fore, discussing the evolution of DSTs and their current role in real estate investment strategies.

The discussion opens with Chris and John setting the stage by outlining the basics of DSTs and their relevance in modern real estate transactions. Warren Thomas provides a detailed explanation of how DSTs function as a viable option for investors, especially retirees or those seeking to simplify their real estate holdings. Throughout the episode, Thomas emphasizes the flexibility and tax advantages of DSTs, including the ability to exchange different types of property and the strategic use of debt and leverage within these trusts. Listeners gain insight into the practical applications of DSTs, learning how they can avoid the complexities of direct property management while still benefiting from real estate investments.

Key Takeaways:

* Understanding DSTs: Delaware Statutory Trusts are powerful tools for deferring capital gains taxes and are an excellent alternative for real estate investors looking for passive income without the hassle of direct property management.

* 1031 Exchange Mechanics: Investors can transition from active property management to a more passive role through DSTs, which offer pre-structured financing solutions that can accommodate various investment and tax strategies.

* Investment Flexibility: DSTs allow for diverse real estate investment opportunities, enabling investors to move between different asset classes and benefit from institutional-grade properties without personal liability for debt.

* Exit Strategies: Various options exist at the conclusion of a DST investment cycle, including cashing out, rolling into a Real Estate Investment Trust (REIT), or executing another 1031 exchange, offering investors tailored financial outcomes.

* Tax Advantages and Estate Planning: Investing in DSTs can provide substantial tax benefits, including depreciation opportunities and potential step-up in basis, optimizing estate planning strategies.

Notable Quotes:

* "We've never had a missed rent payment. That's a, that's pretty incredible." - Warren Thomas

* "You get that ongoing tax sheltering that can go on forever." - Warren Thomas

* "Most of the DST programs are going to have a stated minimum of 100,000." - Warren Thomas

* "An investor we believe should always be able to just cash out." - Warren Thomas

* "There are estate tax advantages we could cover on another podcast to both the DST and the 721 exit." - Warren Thomas

Stay tuned to the Teaching Tax Flow podcast for more insightful discussions on tax optimization strategies and real estate investment opportunities. Don't miss our future episodes where experts continue to unravel complex financial topics for all listeners.

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Episode Sponsor:
Strategic Associates, LLC
Roger Roundy
www.linkedin.com/in/roger-roundy-86887b23

(00:00) - Exploring Delaware Statutory Trusts for Tax-Advantaged Real Estate Investments
(04:29) - Exploring Opportunities With Delaware Statutory Trusts
(05:59) - Understanding 1031 Exchanges and Delaware Statutory Trusts
(12:18) - Debt Strategies for Retirees in DST Investments
(17:04) - DSTs as a Flexible Option for 1031 Exchange Investors
(22:53) - Exploring DST Exit Strategies and Tax Implications
(27:28) - Exploring Real Estate Investment Strategies and Tax Advantages

Ep. 125 | Delaware Statutory Trusts Explained

Teaching Tax Flow: The Podcast