How Tired Landlords Are Escaping $1M Tax Bills Using DST 1031 (Without Buying Another Property)

David Wiener: Imagine you're a tired landlord with $800,000 in gains and $300,000 in depreciation recapture staring you in the face. Instead of writing a seven-figure tax check, you 1031 into a Delaware Stautory Trust get institutional grade passive income, and later UPREIT into a fully liquid ⁓ Have I lost you? Stay tuned because today K properties vice president Tommy Olson is going to walk us step by step through exactly how real investors are doing this in 2026 using DST 1031 exchanges and 721 upreach strategies as part of their tax plan. Welcome back to the Tax Strategy Playbook. I'm your host David Wiener and this show is where real estate investors and business owners learn how to legally reduce taxes, protect their cash flow, and build lasting wealth. On a recent episode we broke down how to use 1031 exchanges and smart deal structurings so you never lose a transaction to depreciation recapture again. But there's a specific kind of listener who reached out after that episode. The tired landlord who wants out of active management altogether. They're done with tenants, repairs, 2 a.m. phone calls, but they're terrified of the capital gains and recapture bill that comes along with selling. So today we're going to unpack the strategy that's exploded over the last couple of years using Delaware Statutory Trusts or DSTs as a passive 1031 alternative. And then for some investors, taking the next step into 721 UPREITs to unlock liquidity. The DST market raised billions in equity last year. And that growth tells us investor demand for these structures is only accelerating. So to break it all down, I've brought on a guest who spends his days helping real estate investors execute their transitions out of hands-on property into institutional quality passive income vehicles. My guest today is Tommy Olson, Vice President at Kay Properties and Investments, one of the leading Delaware statutory Trust advisory firms in the United States. Kay operates the KPI1031.com marketplace and gives investors access to DST offerings from more than 25 sponsor companies nationwide. Tommy is a registered representative who has helped build out Kay's marketing and operations and now works directly with 1031 exchange clients, guiding them from actively managing real estate into carefully underwritten DSTs. is also a regular voice on Kay's DST Essentials content. where he co-hosts sessions on liquidity, exit strategies, and real investor case studies. Tommy, I've been looking forward to this one. Welcome to the Tax Strategy Playbook.

tommy olsen: Thanks David, glad to be here.

David Wiener: Some of my listeners are, I have found, what I call tired landlords. They own appreciated rentals, but they're exhausted by what one advisor called the three T's, taxes, tenants, and toilets. When one of these investors first calls you at Kay, what does their typical situation look like in terms of property type and age and frustration level?

tommy olsen: Mm-hmm. Mm-hmm. Yeah, yeah, you named it really, a lot of them are tired. so they typically we have a lot of clients who are approaching retirement or near retirement age, and they're trying to plan for how to take their foot off of the gas pedal, their hands off of the steering wheel, and take more of a passenger seat. But a lot of them actually don't know about these passive options when they first reach out. And so they're just mostly scared that if they do sell They've owned their real estate so long, they have actually seen the value grow, which is great. It's a great problem to have, but they could owe tremendous taxes and they want to avoid those. And now they're looking for a way to sell their properties, get out of active management, but not have to pay the taxes and if possible, keep their money working for them in income producing property.

David Wiener: Makes sense. ⁓ I'm a cost segregation provider. And so I talk to a lot of people about what happens when I decide I'm going to get out of this property. Many times they're going to just 1031 exchange it into another property. The DSTs are new to me. The UPREITs are fairly new to me. So ⁓ as to learn as anybody on this. Let's put some rough numbers to it. ⁓ If landlord has around 800,000 in capital gains and maybe 300,000 of depreciation recapture.

tommy olsen: Mm-hmm.

David Wiener: What kind of combined tax bill could they be staring at if they just sell out right and don't use a 1031 exchange?

tommy olsen: Yeah, it's a great question. for our clients, we work with a lot of clients in high tax states, California is where we're based, as well, you we have clients across the country. But in California, particular, you could be facing a tax bill that amounts to about half up to half of what you receive from the sale of the property. Yeah, so 50 % of the money you receive when you sell the property, you know, from the buyer, it just

David Wiener: Wow.

tommy olsen: goes to Uncle Sam and then also ⁓ California State Franchise Tax Board and, you know, et cetera. It can be very expensive.

David Wiener: There's a lot of et ceteras in California, isn't there?

tommy olsen: Yeah, yeah. And, and you know, other states are less expensive, but that depreciation recapture, you know, can still come back to get you the net investment income taxes, which is 3.8 % tax seems small, but on a million dollar sale, or million dollar gain 3.8%, that is $40,000 almost. So that's not a small amount of money. Yeah, yeah.

David Wiener: That's a good chunk of change. Yeah. So from what you're seeing, what's changed in the last couple of years? Interest rates, rent growth, regulations that have pushed more of these landlords to say, you know what, I'm done with active management, but I can't afford the tax hit.

tommy olsen: Yeah, there's a few things that have changed and it is the regulatory environment in which many people find themselves and their properties. It's great to own real estate in California. The values continue to go up. There's a lot of it is very densely ⁓ built out. There's no more room to expand. And yet there's ⁓ laws that are mostly in favor of tenants and less so in favor of landlords. And so landlords have a tough time. They'll try to work together, know, lobby the local municipalities to work things more in their favor, but continually on, you know, the city, the county, the state, and even times in the past, there have been federal initiatives that try to tilt things more in favor of tenants and not in favor of the landlords. The interesting thing is we find that some of the larger institutional owners of real estate have the scale to actually sometimes take advantage of this difficulty in managing real estate. And they'll not have the same problems that many of our clients do with their own problems, or they have ways to deal with them and actually sort of tilt things in their favor because they have a competitive advantage.

David Wiener: And active real estate management is not for the faint of heart. It's not for sissies. And it's got to be tiring after years and years of doing it.

tommy olsen: ⁓ no. Right. Yeah, and that's the case is people go on vacation and they're getting calls, you know, you might hire a property manager, and that property manager is just not going to do it the way that you would yourself because it's not their property. It's not their money that they're spending. And it might be some very simple fix, you know, you might have a small plumbing problem that all it takes is a plunger and you know, five minutes, but instead you spend hundreds of dollars on a plumber. who can, it's not your money. So that's the thing with trying to go passive. There are steps that can be taken and we encourage clients to consider those first before they sell a property that especially if it's very close to their heart to hold on to that property. Try going passive, try property manager. We have some good ones that we've ⁓ heard from and worked with in the past, but in general, they're gonna end up having the same problems and sometimes even more so.

David Wiener: So, for the investor who's heard the words Delaware Statutory Trust or DST 1031 but they don't really know what that means, how do you explain a DST in plain English like you were talking to a client at your first meeting?

tommy olsen: Yeah, Delaware Statutory Trust, it's a mouthful. And the properties do not have to be in Delaware. It's just a business friendly state that the IRS approved this structure. So a Delaware Statutory Trust, just a way to hold title to real estate, sort of like some people use in LLC. But this one is unique. It's 1031 exchange qualified. And if you want to know how the 1031 exchange works, you know, we have literature and materials on that. And also, David did just record. ⁓ episode on that. So go back to that. But the ⁓ way you think about these trusts is it's like a family Trust, you could say. Like if you looked at the home that my wife and I own, he looked up the title, you wouldn't see our names on it. You would see the name of our Trust. And if you were to pull the Trust documents, you'd see who owns that Trust, who are the grantors of that and the beneficiaries. The same thing is true with these Delaware statutory trusts. It's a way to hold title to the real estate. And then it makes it eligible for various different investors to buy just a piece, some percentage ownership of it, and then still participate in all of the potential benefits of owning real estate, income, appreciation, ⁓ diversification, as well as ⁓ the write-offs that you can take advantage of from real estate as well.

David Wiener: So it's not buying another physical asset. It's selling the one and using the basis carryover to invest in the DST. Is that more like it?

tommy olsen: Yeah, you still doing the 1031 exchange, but instead of buying another property that you would own directly and manage yourself, you can actually take your proceeds and diversify it amongst a number of different DST properties, Delaware Statutory Trust properties that have been prepackaged. They've already been purchased, and they're already stabilized cash flowing properties that you step into day one, start accruing your pro rata portion of the income. And even more importantly, for 1031 exchange investors is It eliminates that closing risk that someone can have with a very short timeframe for a 1031 exchange. If you don't get things done in the right amount of time, you may owe those huge tax bills that we talked about before. Instead, if you do the DSTs, it's a very quick process can be done in about a week.

David Wiener: that's quick that's great so in social media we're in the age of social media there's all kinds of opinions floating out there about tax hacks and things just did a an episode on seven Tiktok tax hacks that are likely to get you audited

tommy olsen: Mm-hmm.

David Wiener: What are one of the two of the biggest misconceptions you hear from investors or even their CPAs or attorneys about DSTs and 1031 exchanges, things you find yourself correcting over and over and over?

tommy olsen: That's a great question. So one of the misconceptions would be that this can just be a parking spot for a couple of years, that you want to do a 1031 exchange and buy a property, but you want time basically to do it. So you're going to put money into a DST, hold on to it for a couple of years, and then take the money out and go buy your own property at that point. These aren't parking spots, unfortunately. They are real estate investments. And if you're going to have the most successful profitable outcome, you're going to let that full plan unfold for that specific investment, which the business plans for these are typically geared toward more like a five to seven year hold, and then selling when the market timing is right. Not when whenever you want to be able to push some sort of liquidity button to go do another exchange. We could talk about the 721 later, but that's, that's actually one of the other misconceptions people have. is that ⁓ the 721 UPREIT DSTs are cure-all for ⁓ only ⁓ own property management woes, but also solving liquidity in a way that we've actually noticed some risks regarding the liquidity within 721 UPREITs that we have to point out to our investors just so that they don't end up getting surprised down the road. when it may not be there for them or it may not be at the value that they are hoping for.

David Wiener: And I definitely do want to touch on the risks and potentialities in a little bit, but ⁓ walk through a real world DST 1031 case. you share an anonymized example of ⁓ tired landlord who sold, had a large capital gain and depreciation recapture exposure, and then decided to move into a Delaware statutory Trust instead of another hands-on property?

tommy olsen: Yeah, sure. Yeah. So, you know, we have clients like this that reach out to us every day and we've helped ⁓ over 4,000 of them here at Kay Properties do these types of investments. And yeah,

David Wiener: specific example, what were the approximate numbers like sale price, equity going into the 1031 and how did you allocate those?

tommy olsen: Yeah, so we have a client who actually owned in this case, it wasn't residential as a commercial property that she managed for number of years. And she had a few different tenants there. She had to deal still with the same terrible T's with tenants, but it wasn't the place where people live this place where they did their business. it's know, tenants toilets and trash still exists on commercial properties as well. And then vacancies ⁓ can be even more challenging on those types of properties. So she had this property. It was a multi-tenant sort of office type property. She had an accounting firm in there, ⁓ nice folks. And then I think there was going to be a new tenant moving in to do some medical office as well. But she was tired of having to deal with it. And she actually tried to sell it to one of her tenants. And that was a big debacle. actually was really personally taxing on her just to go through all those negotiations. And then finally she's like, okay, I'm done. Sold it for $3 million and she owned it debt free. So she had a mantra in her life that her father had taught her. Interest is only good when you're the one collecting it. She doesn't like to pay interest on anything, credit cards or mortgages or anything like that. that's her mantra. And so she came to us saying, hey, I wanna, find some diversified options for my 1031 exchange. And she's actually completed exchange with six different DST properties. So she took the 3 million, she split it six ways $500,000 allocations in each. And we have exposure to industrial and other net lease properties ⁓ the overall portfolio, as well as some multi tenant retail, which you know, they're buying at really fantastic prices today. then, you know, different exit strategies as well included amongst the diversified geography, diversified asset classes and sponsors of the DSTs. We also have diversified exit strategies where some may offer a 721 UPREIT where others will be more traditional and offer a 1031 exchange at the end so she can continue to defer the taxes and we call it, you know, swap until you drop.

David Wiener: There you go. I can only imagine what her day to day life looked like compared to being a landlord after the DSTs closed. But what about her income going from her rental income and her active income there to her passive income? Do you know what the was there a huge change there?

tommy olsen: Yeah, yeah, I mean Yeah, so the reality was in a commercial property for the property that she sold, she's replacing her income in a little bit more. In residential, a lot of the times there's a significant increase just because we've seen values go up so quickly, but rents haven't kept up with them. But for her, the main difference would be the stability of that income or at least you know, what we anticipate will be the stability since she's got six different streams of income from very high quality tenants, most of the tenants being these like Fortune 50 type companies with investment grade credit, and they're on long term triple net leases. And so her ⁓ reliability, that stability of the income stream increases pretty significantly as opposed to a commercial property where there's three small business owners that are paying the rent. If one of those companies doesn't renew their lease, or they just they have to close shop altogether, then that could be a significant hit to the income. Not only the rental income is lost, but then also they're prorated a portion of the expenses she's responsible for as well. So your volatility of income ⁓ can be sort of mitigated against by moving into a more diversified approach of something that's completely passive. A DST.

David Wiener: I would think her involvement level went way down. Her peace of mind had to go way up.

tommy olsen: Yeah. Yeah, and that's the main thing is you don't have to do anything and you're actually never going to be asked to contribute more money in a DST versus your own property where hopefully you have a rainy day fund set aside for your own properties. But if you need to spend money on a roof or a parking lot or well, depending on the type of property and what it is, these come out of your pocket. You're the one responsible for it. You borrow against the property, whatever it is. A DST is already ⁓ set up for all that in advance. And so they can't go to the investors and say, hey, send us more money or do some sort of surprise curveball like that.

David Wiener: Were you able to introduce this entire idea to her?

tommy olsen: She heard about it online, reached out to us, actually came with us in our office here in Torrance near LA, Southern California. And we walked her through everything. And it was a long process of getting her comfortable with the process and the structure of DSTs and also different types of properties and the different asset classes or the sponsors that we work with as well. to make sure that she understood their track record, what they'd done before, what they were capable of doing. Past performance doesn't guarantee future results, but she got to a place where she was comfortable moving forward. And we walked it through A to Z. It wasn't only me. I work closely with our founder, Dwight Kay. ⁓ ⁓ our CEO and meets with clients all the time as well. And then also we have a really strong support team here. to help along through the education and transaction process.

David Wiener: had to be a great aha moment for her. You know, when she realized what this was capable of doing for her. But anytime we talk about DSTs and anytime we talk about 1031 exchanges, there's a tendency to focus only on the tax deferral and the passive income part of it. When you're sitting with a sophisticated landlord, how do you explain the real risks and trade-offs of investing in a DST?

tommy olsen: Yeah, so the thing that people need to remember with the DST is its property just like they are selling and they're managing their own property. ⁓ Anytime you have real estate, it does come with some risks. Tenant vacancies, know, illiquidity are commonly recognized risks, but there's also oncoming supply and what that can do to the potential income you're going to receive from that property and anything that we would perceive of risk. will be actually fully disclosed to the investor the offering documents for the DSTs We encourage our clients to read this. It's called a private placement or PPM for short. But really what we want to do at Kay Properties is ⁓ see in given what are the most likely risks that this property might face? Is it a single tenant property? What if that tenant goes out of business? What if they just don't renew at the end of the lease? then what and what are the chances that's going to happen and how will they work through it if it does and talk through those items with our client. You can't eliminate all risk but you can control the controllables and there are certain ways that we avoid higher asset higher risk asset classes. There are some out there and people will chase returns but we have to remember why this exists in the first place. We're trying to go into wealth preservation mode, whereas most people when they own real estate were a lot of the times in wealth accumulation mode. They're buying and selling real estate and 1031 exchanges are a powerful tool for that. But in the DST, this is not the time and place to take the same types of risks that you may have in the past. This is the time to control the downside and then provide for upside, but not chase those yields, chase those home runs because that's when you might lose it all.

David Wiener: How do you help them decide whether the trade-offs are acceptable for them?

tommy olsen: it's really just saying, if this is what happens, you know, if 2008, 2009 happens again, if the pandemic happens again, you know, some of these black swan events, these curveballs, but real estate is cyclical. And the world, you know, does history repeats itself, things will happen. And if that happens, and this gets tested, how will it respond? And are you comfortable with that? You know, if it's 2008, 2009, and you're in a FedEx distribution facility with a long term lease, Well, they kept paying the rent then. No guarantee they will in the future, but they paid all through the pandemic and they actually, their business exploded and grew even more with the e-commerce boom. And so most of our clients feel pretty strongly about, you know, an industrial property on a long-term lease with a FedEx or an Amazon or some other large company like that. And they feel good about that, it provides stability and helps them to sleep at night. But...

David Wiener: So it's mostly just transparency and making sure that they realize there are risks, but here's what the risks realistically are.

tommy olsen: Here's what they are and can you live with that? You're not going to avoid all risk. The best way to invest in the lowest risk possible would be take your money, pay those giant taxes, put it into treasuries, 30-year treasuries. You get your 4 5%. But you had to give up 30%, 40%, 50 % of your equity to start with in order to do that.

David Wiener: So a lot of investors are hearing now about the 721 UPREITs and wonder they connect to Delaware Statutory Trust. at a high level, what is it and how can a DST investor eventually move into an operating partnership unit or ⁓ REIT

tommy olsen: So you've heard of the 1031 exchange, obviously, that's what you had a discussion a couple weeks ago on the 1031 exchange part of our section 1031 of our Internal Revenue Code. Section 721 allows for tax deferral or avoidance when you move from owning real estate, owning property, into being a partner, an operating partnership unit holder in a REIT or other LLC or some other fund like that. And why this is relevant to a DST investor is most of us don't own properties that would be the acquisition criteria for a REIT. So most REITs aren't coming out and like trying to buy a single family home here in Los Angeles or, you know, whatever the property is that you own. But a lot of these DSTs may actually be candidates to be contributed to a REIT down the road. And so it can be a two-step process. Two-step process whereby someone does a 1031 exchange into a DST property. And later on, that DST property offers those investors the chance to 721 exchange, which is another tax-deferred exchange, into a REIT. And that REIT is a diversified portfolio of similar properties to what they had been in, say, a single property in that DST.

David Wiener: and they move in as an operating partner.

tommy olsen: That's the technical term for it. if they're moving in a 721 exchange from owning real estate through a DST into the REIT, it's operating partnership units. If they wanted to liquidate out of the REIT, and that's one of the potential benefits of the 721 up REIT, is that it may offer investors a quicker and more immediate, so to speak, path to liquidity, then they will convert their OP units into common shares. Now common shares in a REIT are just like cash basically in the eyes of the IRS that's no longer considered property. And that conversion would be the taxable event when you would recognize those gains and then have to pay taxes on whatever it is that you convert. But those common shares are able to be redeemed or liquidated depending on whether it's a private non-traded REIT or ⁓ even a publicly reporting but non-traded REIT or a public REIT. There are some DSTs that have gone into public REITs and it's very easy. Once you do that conversion, you just can sell at the click of a button versus making a, we call it redemption request to the sponsor on those non-traded REITs.

David Wiener: So do you have like a simple example like with round numbers? So let's say an investor has say 1 to 2 million in DST equity. The underlying properties are sold into a REIT and they receive OP units or REIT shares. What does that mean? I get the OP units are very liquid. ⁓ I think that's what you said. What does it mean for their liquidity and their tax position, at least in concept?

tommy olsen: Yeah, so there's a couple of different considerations with the OP units compared to DST interests. A REIT can pull different levers in terms of tax reporting. In terms of the value, they're going to evaluate the property when they do the up REIT. They'll use third party appraisals or they use appraisal software, and that will assign some sort of value. We've seen it in favor of the investors in certain cases. We've seen it ⁓ fairly neutral in other cases, and we've seen it negative at certain times depending on the market cycle. And meaning we've seen some investors who they put a million dollars into a DST. And then ⁓ when the two years later when they're going into the REIT, that value was actually at a reduction to what they had This is real estate. And because they're on a tight timeline to do it, it's normally only 24 to 36 months or two to three years from the time the DST is fully subscribed to it going into the REIT that ⁓ we don't know which way real estate values will go in that time frame. But once they're in the REIT, they're normally expected to hold for one year before converting to common shares and redeeming anything. In the meantime, as an OP unit holder, They actually have, in most cases, to taking out ⁓ or choosing for their distributions, their dividends in the REIT to be treated as return of capital. So if you have basis remaining, when you did the 1031 exchange originally into the DST, if you had any basis remaining, then when that carries forward into the REIT, that basis can be the basic of the source of your distributions for tax purposes. Now, hopefully, there's still rental income behind all that to support it so that the REIT's not just paying you out of your principal, which is something we wouldn't want to see. But for tax purposes, it can make that income more tax efficient or even tax free.

David Wiener: make sense. Who's a good candidate for a 721 up-read and who might be better off just staying in a DST and using another 1031 exchange in the future instead of going the up-read route?

tommy olsen: So we see the perceived ⁓ potential for the liquidity, which again, I say perceived because some of these REITs have shut down liquidity. The very largest non-traded REIT in the world a few years ago, they had to gate liquidity, gate the redemptions because they had a run on the bank and they can't allow that to happen. So that's why they have the ability to shut it down. And we wouldn't want someone reliant upon it. But for estate planning, It can be a powerful tool. For estate planning, if someone's 95 years old and they don't expect to live past 100, if they're going to live to 120, this might not be the way for them. But if they don't expect to live many more decades, then maybe it makes sense to go this route. And then when they do pass away, if their heirs want to stay put and continue to receive the income potential from that REIT, then they can. But if they'd like to take some money out, They have that ability to now with the step up in basis. those capital gains taxes have been erased. I would though caveat that I'd still say to diversify, you you don't want to just put all your eggs in one basket with one REIT with one business plan and one sponsor. It's it may not work out and you wouldn't want to leave that to your heirs where, you know, all of a sudden they're locked up in something, you know, their inheritance is locked up in this thing that, you know, We've seen some reeds really challenged recently. And so you just still want to practice that diversification mantra.

David Wiener: Absolutely, that's good advice. For the landlord who's listening to this and saying, you know what, this sounds like me. What does the process look like from the very first call with K properties to actually closing a DST 1031? What are the main steps, kind of the timeline?

tommy olsen: Yeah, the first step is really education ⁓ to understand, you know, based on your situation and, you know, your timing, how long do you have to learn about how 1031 exchanges work? What options are there available to you within a 1031 exchange? And then if you're looking to go passive, the DSTs, there are a number of different types of DSTs, different exit strategies. And we really like to learn more about someone's goals and objectives, their exchange situation. Do they have a mortgage on the property that they're selling? will they need to replace debt in their 1031 exchange? DSTs are very easy to do that with, but we need to know their situation so that we can offer the best recommendations and then get feedback. And that's what we do through a lot of things like this. People watch podcasts or webinars or they... ⁓ listening to conference calls that we have on a weekly basis to learn more. And they have one-on-one conversations with people like myself so that we can make recommendations and find out really what they're trying to accomplish. then based on what's out there, what will be the best way for them to do that.

David Wiener: can definitely see that. Is there kind of a common time frame from the time they first talk with you to the time they're able to actually close a DST-1031?

tommy olsen: For us, the earlier is the better. mean, because we have people call us on their 45th day. that's not the, it's not the worst time to call. The 46th day would be, but the 45th day is a very short time window to learn about it and decide if you're even comfortable putting anything down on your identification sheet. The reality is we have helped people do that. And then after they've identified something, they can learn about it and decide if they're comfortable before they move forward.

David Wiener: Yeah.

tommy olsen: at all. the nice thing about a DST being prepackaged, ready to go, is a lot of people, the first encounter they have with it is more as a 1031 exchange insurance policy. They don't want to pay the taxes, but they're not certain they'll be able to close on the property that is their primary option. So they list a DST as a backup. Or maybe they have some leftover exchange funds, they don't want to pay taxes on that boot, so to speak. and they will list a DST to cover the difference between the property that they're purchasing and the property that they sold. So, you know, they can get their feet wet with a test like that. And then later on, they might truly desire to be passive and go with DSTs on the next exchange.

David Wiener: And from what you've said, I can see from the investor's point of view, I know on the KPI 1031 style marketplace, they can see all kinds of different sponsors. And I could see the benefit to them of being able to access a lot of DST sponsors in one place instead of just going to one single sponsor and talking to them about it.

tommy olsen: Yeah, and most of the sponsors, if you would to go to them directly, they're just real estate people, they're in charge of buying real estate, ⁓ managing it and selling it on behalf of investors, but they rely on K properties to educate the clients and to advise them on their situation. So if you go to one of them, they're going to send you back to us. It's just the reality of how it works. And that's also what the regulators require. You have to have someone to represent you in the transaction because There are risks. And if you just talk to the one selling the property, they might not tell you about all those risks themselves.

David Wiener: I kind of feel like maybe they wouldn't. But before somebody calls you, what would be the top two or three questions you wish they would ask before they invest, but they rarely do?

tommy olsen: Yeah. That's a great question. I would say that as someone before they consider DSTs, they should ask themselves, do I need any money right now? If they're selling a property, you don't have to do a full exchange. You could take money out. So think about that early on. Do I have liquidity needs? Do I have a large enough rainy day fund myself? Don't want to go on a vacation and just pay a little bit of tax as the cost to throw myself a party or send myself on vacation or. Do whatever. So ask that first. And then also, would encourage them to ask, who else should be involved in this decision making process? Do I want to include my children? Are they getting to the point where they're helping me to make investment decisions? And would it be helpful for them to learn about this? Since they don't want to inherit my real estate, I realize now. They don't want to help me to manage it. So I know they don't want to inherit my directly owned real estate. But if they're going to inherit the DST properties, Is that something that they should understand beforehand? So I would say that's another really important one to ask as well. Who else should be included in these conversations? Your CPA, real estate attorney or broker, anyone else like that.

David Wiener: I would bet most CPAs who aren't very heavily involved in real estate really don't understand DST 1031s 1031s at all ⁓ definitely not the 721 UPREITs So you would want to get your CPA involved in this. Maybe they can learn some things too. If somebody...

tommy olsen: Yes. Absolutely. Yeah, brainer. Get your CPA involved early and often if you're considering a 1031 exchange. And some of them, they need help. And so ⁓ we have resources that ⁓ I think you could listen to this podcast and learn more about what you might do with your property even before you sell it, tax wise, cost segregation study wise, ⁓ and then for an exchange. But if you're not talking to your CPA before you sell, I think you're making a potential large mistake. You want to get them involved early and often.

David Wiener: And as I always say, you really need to do tax planning, not just tax preparation. Too many real estate investors I know use somebody who just collects their reports at the end of the year, puts the numbers in the right boxes, files the taxes, and that's as far as they go. A tax strategist or a tax planner is going to be looking forward with you to see what's happening. one of the guys that I was talking to said, you know, tax strategy is not about making your tax bill zero this year. It's making the least amount of taxes over the rest of the course of your lifetime. And some people don't realize that they don't think about that. If somebody wants to educate themselves more before they even ever talk to somebody, ⁓ what are the resources, webinars, articles, podcasts? Would you recommend they start to understand these things at the deeper level? ⁓

tommy olsen: Mm.

David Wiener: maybe something that Kay provides that they could get access to.

tommy olsen: Yeah, so we're big on education and we've been able to provide a lot of free education. We house a lot of it on our website because it's just easy one place to go kpi1031.com. That's kpi1031.com. And you go into resources, you'll find previously recorded webinars about all sorts of topics 1031 DST, 721 UPREIT and more. As well, we do have a podcast on Apple and whatever other podcast platforms there are nowadays that you can listen while you're driving or biking or walking or whatever it is you're doing. ⁓ And then, you know, if you wanted to actually dig into the current offerings, you would want to talk to us just so we can understand your situation, make sure that ⁓ these are potentially suitable fit for you. And then we'll get you set up with access to view what's what's available.

David Wiener: And can they schedule a call with you right from the website?

tommy olsen: ⁓ yeah, that's a, you just click schedule a call. That's the way to go.

David Wiener: super and i will put i will have tommy's contact information in the show notes at taxstrategyplaybook.com so if you ⁓ didn't it down or you forget to get in touch with with Kay properties or tommy himself ⁓ we'll have that information for you if all of this sounds uncomfortably familiar ⁓ big gains, big recapture, totally burned out on being a landlord. Pause for a second. Send this episode to your CPA or your attorney or your business partner or your kids. This is the conversation you want to have before you list your property, not after you're already under contract. And I've got two action steps for you. First, if you're a tired landlord or advisor and you want more deep dive content like this, make sure you're subscribed on YouTube, Spotify, Apple Podcasts, and all the major podcast platforms and leave a quick rating so we know this is the kind of material you want more of. Secondly, if you're sitting on a real property with a real tax problem, don't make decisions in a vacuum. Take what you heard today, loop in your CPA and your legal team, and start mapping out whether a DST 1031 and potentially a 721 UPREIT strategy could be your path from active headaches to real passive income. And if you want me to cover another advanced tax or deal structure on the show, drop it in the comments or send me a note. Your question just might become our next episode. This is David Wiener, Mr. Cash Flow, and this is the Tax Strategy Playbook. business owners with these kind of tax strategies. I'll see you on the next episode.