The Realized Due Diligence Process

The Realized Due Diligence Process


There are material risks associated with investing in DST properties and real estate securities including liquidity, tenant vacancies, general market conditions and competition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial and multifamily properties, short term leases associated with multi-family properties, financing risks, potential adverse tax consequences, general economic risks, development risks, long hold periods, and potential loss of the entire investment principal. Past performance is not a guarantee of future results. Potential cash flow, returns and appreciation are not guaranteed. IRC Section 1031 is a complex tax concept; consult your legal or tax professional regarding the specifics of your particular situation. This is not a solicitation or an offer to sell any securities. Such offers can be made only by the confidential Private Placement Memorandum (the “Memorandum”). Please read the entire Memorandum paying special attention to the risk section prior investing._

This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor.

Realized does not provide tax or legal advice. This material is not a substitute for seeking the advice of a qualified professional for your individual situation.

No public market currently exists and one may never exist. DST programs are speculative and suitable only for Accredited Investors who do not anticipate a need for liquidity or can afford to lose their entire investment.

Past performance is not a guarantee of future results. There is no guarantee that the investment objectives of any particular program will be achieved.

The actual amount and timing of distributions paid by programs is not guaranteed and may vary. There is no guarantee that investors will receive distributions or a return of their capital. These programs can give no assurance that it will be able to pay or maintain distributions, or that distributions will increase over time.

Costs associated with a 1031 transaction may impact investor’s returns and may outweigh the tax benefits. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities.

Full Transcript

Research and analysis are integral parts of any investment strategy, but it takes experience to fully understand the complex markets and tax implications associated with real estate, 1031 Exchanges and DST investments. A 1031 Exchange can be a major financial decision to make on a relatively short timeline. We believe that access to a timely and robust research and due diligence process is an important, though often overlooked, component to a DST investment decision.

The rigorous research and due diligence process at Realized is centered around leveraging third-party research, our proprietary technology, and our team’s experience to help guide investors through this process.

Realized evaluates four key factors when reviewing an offering:

  • The Sponsor
  • The underlying real estate
  • The deal's investment structure, and
  • How suitable the deal is for the investor.

The first step in our process is reviewing the Sponsor, which includes vetting the Sponsor’s prior real estate experience and past performance, reviewing the Sponsor’s financials, regulatory or legal disclosures associated with the Sponsor, and more.

Next, we perform due diligence on the real estate, which entails reviewing the property’s physical condition, the tenant credit and lease terms, its performance history, and comparisons to similar properties. Market and sub-market factors are also considered to assess geographic risk and growth opportunities.

Once the Sponsor and property have been evaluated, we consider the offering’s upfront and ongoing fee structure; projected investor returns versus projected sponsor compensation; the offering’s assumptions and projections against third-party data; and more to analyze the deal’s investment structure.

Finally, we review an offering’s fit relative to a client’s specific investment objectives, goals, and risk tolerance.

At Realized, we’re committed to finding investment solutions that are built with the customer in mind. Our experienced team of professionals is here to help you manage your investment property wealth with the same tools and sophistication as other forms of wealth management.

Investment Property Wealth Management, from Realized. Designed with your future in mind.