12 Reasons to Consider Debt Free DST Properties*

Image of Cove Capital Investments LLC 12 Reasons to Consider Debt Free DST Properties
  • No risk of a lender foreclosure.
  • No refinancing risk.
  • Eliminates the risk of taking on equal or greater debt in future 1031 exchanges
  • Provides 1031 investors the ability to diversify a portion of their exchange dollars into an all-cash/debt-free property in an effort to reduce potential risk.
  • Please note diversification does not guarantee profits or protect against losses.
  • Flexibility to hold through any potential market downturns, credit crunches, recessions and/or depressions.
  • No cross-collateralized loan risk found in certain leveraged DSTs.
  • No cash flow sweep risk as found in certain DST properties with debt.
  • Oftentimes, an all-cash / debt-free DST can have a higher projected cash flow than leveraged DSTs due to there being no monthly debt service that needs to be paid to a lender.
  • Allows investors to protect themselves from the financial catastrophe of a complete loss of their principle due to a lender foreclosure.
  • No “balloon mortgage maturity” which is typically found in most leveraged DST properties.
  • No lender prepayment penalties, defeasance costs and/ or yield maintenance.
  • Lower fees – Oftentimes, all-cash / debt-free DSTs can have lower fees/commissions than leveraged DSTs.