3122 Consulting – Investment Sourcing and Due Diligence

For the Wealth Advisor that wants to provide an

Institutional Approach...

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Institutional Structure...

...for the Individual Investor client

AFFILIATIONS

EXPERTISE

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Kurt J. Tesh, CFA

Kurt has over thirty years of experience in the investment industry. He has served in analyst, investment officer and portfolio manager roles in broker-dealers, registered investment advisors, institutional consulting firms, and bank trust companies.

Mr. Tesh is a Charterholder member of the CFA Institute, and has served as an officer and director of two of its constituent chapters. He has served in leadership roles in industry organizations, and been recognized as one of the top DDOs in the country by industry publications. He also participates in FINRA’s dispute resolution program. Kurt is a graduate of Stetson University where he was recognized as an Outstanding Scholar and guest lecturer in the Roland George Investment Program.

At Your Service

3122 Consulting can assist with a variety of investment sourcing and due diligence needs for your clients.

1031 Sourcing

& Replacecment

White Label

Investment Funds

Co-Investment

Opportunities

Investment

Due Diligence

Industry Affiliations

3122 Consulting is affiliated with these institutions to facilitate the origination and execution of your client investments.

Visit Crescent Securities Group

Visit Chatham Realty Group

Visit FrontStage Capital

Industry Partners

These industry partners make us proud to be working with them!

Focus Sectors

Real Estate

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Energy

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Private Equity

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Tax Advantaged Investing

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Fee Simple vs DST vs TIC

Comparing 1031 Replacement Properties

Feature	Fee Simple	DST	TIC
IRS Guidance	Rev. Proc. 2002-69	Rev. Rule 2004-86	Rev. Proc. 2002-22
Maximum number of Investors	1	Up to 499	Up to 35
Ownership	100%	Percentage of Beneficial Ownership	Fractional Ownership up to 35 Investors
Closing Costs	Usually $0	Usually $0	Between $2500 and $5000
Diversification	Yes, 100% Control	Generally Single Property	Generally Single Property
Investor Receive Property Deed	Yes	No	Yes (fractional)
Investors Form Single Member LLC	Yes	No	No (Yes if SM LLC is used)
Major Decision Approval	Yes, 100% Control	No voting rights	Yes, equal rights with all other investors. Typically requires 100% Approval
Number of Borrowers	Typical 1 desired	1, the DST	Up to 35
Ability to Leverage Transaction	Yes	Yes through DST	Yes through each LLC or Interest holder
Bankruptcy Remote	Yes	Yes	No, unless SM LLC used
Tax Deferral	Yes	Yes	Yes
Control over Property	Yes	No	Partial requires 100% Approval
Average Cap Rate	4-5%	3-4%	4.5-5%
Average Property Value	$110,000	$9 Million	$6.5 Million
Geographic and/or Property Diversification	Yes	Generally, No	Generally, No
Investment Commissions	Yes	Yes	Yes
Property Management Fee	Owners Decision	Yes	Yes
Organizational and Offering Fees	None	Yes	Yes
Ability to Cash Out Refinance Asset(s)	Yes	No	No
Closing Timelines	15 Business Days	3-5 Business Days	30-60 Business Days
Summary	This structure gives you total control of the property(ies) include being able to refinance, cash out re-finance, refinance self-manage the properties, or sell the properties. Archon SM LLCs typically have much smaller assets than TICs or DSTs with lower credit, shorter term tenants (Residential Leases instead of Commercial).	DSTs generally have larger assets than A SM LLCs or TIC with durable, brand name tenants, but have higher fees, less control, virtually no liquidity, less diversification and lower yields.	TICs generally have larger assets than A SM LLCs with durable, brand name tenants, with smaller fees, diversification, and yield to a DST. Both DSTs and TICs have limited or no liquidity, but a TIC owner does, along with the other 34 investors have fractional control of the property.

Comparison reconstructed with permission from Archon Investments' website, viewed May 2022. https://www.archon1031.com/sm-llc-vs-dst-vs-tic

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MORE THAN DST for 1031s

When the IRS acknowledged the Delaware Statutory Trust (DST) as a direct investment in real estate as opposed to a security, it became the vehicle of choice for advisors and their clients executing a 1031 exchange. The DST offered relatively small ...

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