When you place a 1031 exchange into a Delaware Statutory Trust, you are not just buying a property — you are hiring a sponsor to acquire it, manage it, and eventually return your capital. The single most useful evidence of whether a sponsor can do that is a full-cycle track record: the list of deals the sponsor has taken from acquisition all the way through sale, with realized returns you can compare against the projections those deals started with. A track record that is mostly 'open' (still-held, marked-up offerings) tells you little; a full-cycle record shows what actually happened when the music stopped — did capital come back, did realized returns land near projections, were hold periods reasonable, and did any deals underperform or lose money? This guide explains what a full-cycle track record shows, how to read realized versus projected returns, what hold periods across deals reveal, how to interpret consistency and drawdowns, and how to use the whole record to vet a sponsor. DST interests are securities sold to accredited investors through a broker-dealer after a suitability review; past performance never guarantees future results, and projections are not promises. Verify current rules with your advisors — this is educational information, not investment, tax, or legal advice.
What a Track Record Shows
A full-cycle track record is the record of a DST sponsor's completed deals — offerings that have gone the full distance from acquisition, through the hold and operating period, to a final sale and return of capital. The word that matters is 'full-cycle': a deal that has fully cycled has a known, realized outcome, not an estimate. So a track record shows you how the sponsor's prior offerings actually ended, which is the closest thing you have to evidence that they can execute the same end-to-end process with your money.
Concretely, a meaningful full-cycle record discloses, deal by deal, what the sponsor projected at the outset (the cash flow and total-return expectations in the original offering) and what the deal actually delivered: the realized distributions investors received during the hold, the sale price and gain or loss at disposition, the total realized return, and the hold period it took to get there. Read across many deals, the record also reveals consistency (did most deals land near expectations?) and any drawdowns (did any underperform, suspend distributions, or lose investor capital?). A record that only shows still-open, marked-up offerings is not a track record — it is a portfolio snapshot.
So a full-cycle track record shows a sponsor's completed deals and their realized outcomes — what they projected versus what they delivered, how long each hold took, and how consistent the results were across the portfolio. It is the proof, rather than the promise, that a sponsor can take a deal from start to finish and return capital. A full-cycle track record — the documented list of a DST sponsor's deals that have gone from acquisition through sale, with realized returns, hold periods, consistency, and any drawdowns disclosed deal by deal — is the single most useful piece of evidence in sponsor due diligence. It shows what actually happened, not what was hoped. Understanding what the record shows frames everything else, because realized history is the best available signal of execution ability. A full-cycle track record shows a sponsor's completed deals and their realized results — the best evidence that the sponsor can execute end-to-end and return capital.
Realized vs. Projected Returns
The most revealing comparison in any track record is realized return versus original projection. Every DST offering launches with projected numbers — a projected annual distribution (often expressed as a cash-on-cash yield) and, sometimes, a projected total or internal rate of return that assumes a future sale price. Those projections are assumptions, not commitments. The full-cycle record lets you check the assumptions against reality: for each completed deal, did the realized distributions match what was projected, and did the realized total return (including the gain or loss at sale) land near, above, or below the original target?
Reading this comparison carefully matters because the two halves can diverge. A deal might have paid its projected distributions steadily for years yet sold for less than expected, dragging the total return below projection — or it might have paid below-projection income but sold strongly. You want to see whether the sponsor's projections have historically been conservative, roughly accurate, or persistently optimistic. A pattern of realized returns that consistently land near or above projection is a strong signal; a pattern of realized returns that consistently fall short suggests the sponsor's underwriting tends to be aggressive, and you should discount their current projections accordingly.
So realized-versus-projected is the heart of reading a track record: it tells you whether a sponsor's projections have historically been reliable, which is exactly what you need to judge the projections on the deal in front of you. Realized versus projected returns — comparing, deal by deal, the realized distributions and total return a completed offering actually delivered against the cash-flow and total-return projections it launched with — is the most diagnostic part of a full-cycle record, because it reveals whether a sponsor's underwriting has historically been conservative, accurate, or optimistic. A sponsor whose realized results consistently meet or beat projections has earned more credibility for its current numbers; one that routinely falls short has not. Understanding this comparison lets you weigh today's projections honestly. Realized-versus-projected shows whether a sponsor's projections have historically held up, which is the key to judging the projections on a current offering.
Projections are assumptions, not promises. The only way to know whether a sponsor's projections are worth trusting is to see whether their past projections came true.
Hold Periods Across Deals
Hold period — the time from a DST's acquisition to its final sale — is a second dimension the full-cycle record reveals, and it matters for more than patience. Most DSTs are marketed with an anticipated hold of roughly five to seven years, but the actual hold is determined by the sponsor's judgment about when to sell, market conditions, and the underlying business plan. Reading hold periods across many completed deals tells you how the sponsor's real timelines have compared to what was anticipated, and how much they vary from deal to deal.
Both unusually short and unusually long holds deserve scrutiny. A string of very short holds might reflect skilled opportunistic selling — or a sponsor harvesting fees by recycling investors through quick round-trips. A string of holds that ran well past the anticipated window might reflect patient value creation — or deals that could not be sold profitably on schedule, leaving capital locked up longer than investors planned. Because a DST is illiquid and you generally cannot exit early, the hold period is the period your capital is genuinely committed, so a sponsor whose realized holds have clustered near their stated expectations is easier to plan around than one whose holds have been erratic.
So hold periods across deals show whether a sponsor's real timelines have matched its stated expectations and how consistent they have been — information you need because a DST's hold period is the window your capital is locked up. Hold periods across deals — the realized time from acquisition to sale for each completed offering, read against the roughly five-to-seven-year hold most DSTs anticipate — reveal whether a sponsor sells on a reasonable, consistent schedule or whether its holds run unusually short (possible fee-churning) or unusually long (possible deals that could not be sold profitably on time). Because DSTs are illiquid, the realized hold is the period your capital is truly committed, so consistency here aids planning. Understanding hold patterns complements the realized-return picture. Hold periods across deals show whether a sponsor's real timelines have matched expectations and stayed consistent — important because the hold is when your capital is locked up.
Consistency & Drawdowns
Any sponsor can point to a few standout deals. What separates a credible track record from a cherry-picked one is consistency across the whole portfolio of completed offerings, and an honest accounting of the deals that went wrong. Consistency asks: did most of the sponsor's full-cycle deals land near their projections, or were the headline results carried by one or two outliers while many quietly underperformed? You want to see the full distribution of outcomes, not just the averages, because an average return can hide a wide spread of good and bad deals.
Drawdowns are the deals that underperformed — those that paid below-projection distributions, suspended distributions during the hold, sold at a loss, or returned less capital than investors put in. A track record with zero drawdowns across a long history and many deals is either genuinely exceptional or incompletely disclosed, so it warrants a careful look at how complete the record actually is. More important than whether a drawdown occurred is how the sponsor handled it: did they communicate transparently, take corrective action, and ultimately recover capital, or did they go quiet? How a sponsor behaves in its worst deals tells you more about how they will treat you in a downturn than how they behave in their best ones.
So consistency and drawdowns separate a real track record from a marketing reel: you want most deals near projection, the full distribution of outcomes disclosed, and an honest, well-handled account of the deals that struggled. Consistency and drawdowns — whether most of a sponsor's completed deals landed near projection (consistency) rather than being carried by a few outliers, and how the sponsor disclosed and managed the deals that underperformed, suspended distributions, or lost capital (drawdowns) — are what distinguish a credible full-cycle record from a cherry-picked one. The full distribution of outcomes, and the sponsor's behavior in its worst deals, matter more than the average. Understanding consistency and drawdowns rounds out the realized-return and hold-period analysis. Consistency and drawdowns reveal whether a track record is broadly solid or carried by outliers, and how a sponsor handles its worst deals — a key signal of how it will treat you in a downturn.
- A full-cycle track record shows completed deals and their realized outcomes — the best evidence a sponsor can execute end-to-end and return capital.
- Compare realized returns to original projections to judge whether a sponsor's underwriting has been conservative, accurate, or persistently optimistic.
- Read hold periods across deals for consistency, since the realized hold is the period your illiquid capital is genuinely committed.
- Look past averages to the full distribution of outcomes and how the sponsor disclosed and handled its drawdowns — past performance never guarantees future results.
Verifying the Record's Completeness
A track record is only as trustworthy as it is complete, so before drawing conclusions you need to confirm you are seeing the whole picture rather than a curated slice. Ask the sponsor for a full, deal-by-deal accounting of every offering that has gone full-cycle — not just the successes — including the ones that underperformed. Watch for selective presentation: a record that omits weak deals, blends still-open offerings into 'realized' figures, or reports only a single aggregate number rather than deal-level detail should prompt more questions, not fewer.
Pay attention to how returns are calculated and presented, because the same deals can look very different depending on methodology. Is a stated return an average across deals or weighted by capital? Does it include or exclude fees and load? Are projections being compared to realized results on a like-for-like basis? Reputable sponsors and the broker-dealers that sell their offerings present this data consistently and can explain their methodology; vague or shifting definitions are a warning sign. Where possible, cross-check the sponsor's figures against independent sources and the disclosures in the offering's private placement memorandum, and bring questions to the broker-dealer conducting due diligence on the offering.
So verifying completeness — getting every full-cycle deal, understanding the return methodology, and cross-checking the figures — is what turns a track record from a marketing claim into usable evidence. Verifying the record's completeness — confirming you are seeing every full-cycle deal (not a curated subset), understanding whether returns are averaged or capital-weighted and whether they include fees, ensuring projections and realized results are compared like-for-like, and cross-checking figures against the PPM and the broker-dealer's due diligence — is the step that makes a track record trustworthy. An incomplete or inconsistently presented record cannot be relied on. Understanding how to verify the record protects you from cherry-picked numbers. Verifying completeness and methodology turns a sponsor's track record from a marketing claim into evidence you can actually use.
A track record with no losing deals over a long history is either genuinely exceptional or incompletely disclosed — and you owe it to your capital to find out which.
Using It to Vet a Sponsor
Pulling the pieces together, a full-cycle track record is a tool for vetting a sponsor — proof that they can take a deal from acquisition through sale and return your capital, not just a list of impressive numbers. Used well, it answers the question that matters most in DST due diligence: based on what this sponsor has actually done, how confident should I be that they can do it again with my exchange? Realized-versus-projected tells you whether to trust their projections; hold periods tell you whether their timelines are dependable; consistency and drawdowns tell you how they perform across the full range of outcomes, including bad ones.
Just as important is what a track record cannot do: it cannot promise future results. Past performance does not guarantee future returns — markets, interest rates, tenants, and the deal in front of you are all different from the deals that have already cycled. A strong record raises your confidence but does not eliminate risk; a weak or short record should lower it. Treat the track record as one important input among several — alongside the sponsor's experience and team, the specific property and its debt, the fee structure, and the risk factors in the PPM — rather than as a stand-alone verdict. The track record narrows the field of sponsors worth considering; it does not pick the deal for you.
So a full-cycle track record is used to vet a sponsor — strong, complete, consistent realized results raise your confidence in their ability to execute, while gaps, short histories, or persistent shortfalls lower it — but it is one input, never a guarantee. Using a track record to vet a sponsor — reading realized-versus-projected to judge their projections, hold periods to judge their timelines, and consistency and drawdowns to judge their behavior across all outcomes, then weighing the whole record alongside the team, property, debt, fees, and PPM risk factors — is how you turn realized history into a confidence judgment. It narrows the field; it does not pick the deal, and it never guarantees future results. Understanding this puts the track record in its proper place. A full-cycle track record is used to vet a sponsor's execution ability, raising or lowering your confidence — but it is one input among many, and past performance never guarantees future results.
How Baker 1031 Helps You Read a Sponsor's Track Record
Baker 1031 Investments helps investors read a DST sponsor's full-cycle track record — understanding what the record shows, comparing realized returns to original projections, reading hold periods across deals, interpreting consistency and drawdowns, and verifying the record's completeness — so you can vet a sponsor's ability to execute before you commit your exchange.
DST interests are securities offered through the broker-dealer, Aurora Securities, Inc. (member FINRA/SIPC), to accredited investors after a suitability review and consistent with Regulation Best Interest. We help you obtain and interpret a sponsor's full-cycle results, ask the right questions about methodology and completeness, and weigh the track record alongside the specific property, its debt, the fee structure, and the risk factors disclosed in the private placement memorandum. Baker 1031 does not provide tax or legal advice; your CPA and attorney handle your specific tax situation and how a DST fits your 1031 exchange. We are candid that a track record is evidence of past execution, not a promise — past performance does not guarantee future results, projections are assumptions rather than commitments, and distributions and returns are never guaranteed. Our role is to help you read the record clearly, vet the sponsor honestly, and invest only when an offering is suitable for your goals and risk tolerance.
Frequently Asked Questions
What is a full-cycle DST track record?
A full-cycle DST track record is the documented list of a sponsor's offerings that have gone the full distance — from acquisition, through the operating and hold period, to a final sale and return of capital. The key word is 'full-cycle': those deals have known, realized outcomes rather than estimates. For each completed deal, a meaningful record discloses what the sponsor originally projected (the cash-flow and total-return expectations) and what the deal actually delivered: the distributions investors received, the sale price and gain or loss, the total realized return, and the hold period. Read across many deals, the record also reveals consistency and any drawdowns. A record that only shows still-open, marked-up offerings is not a track record — it is a portfolio snapshot. So a full-cycle track record is the closest thing you have to proof that a sponsor can take a deal from start to finish and return investors' capital, which is exactly what you are hiring them to do.
Why does a sponsor's track record matter for a DST?
When you place a 1031 exchange into a DST, you are not just buying a property — you are hiring a sponsor to acquire it, manage it, and eventually sell it and return your capital. A full-cycle track record is the best available evidence of whether they can do that, because it shows what actually happened on their prior deals rather than what they hope will happen on yours. It answers the central due-diligence question: based on what this sponsor has actually done, how confident should I be that they can do it again? Because a DST is illiquid and passive — you cannot manage the property or exit early — you are heavily dependent on the sponsor's competence and integrity for the life of the deal. So vetting that competence through a realized track record matters more than for many other investments. A strong record raises your confidence; a weak or short one should lower it, though no record guarantees future results.
What does realized versus projected return tell me?
Realized-versus-projected is the most diagnostic comparison in a track record. Every DST launches with projected numbers — a projected distribution yield and sometimes a projected total return that assumes a future sale price. Those are assumptions, not commitments. The full-cycle record lets you check them against reality: for each completed deal, did realized distributions match the projection, and did the realized total return (including the gain or loss at sale) land near, above, or below target? A sponsor whose realized results consistently meet or beat projections has earned credibility for its current numbers; one whose results routinely fall short has shown a pattern of aggressive underwriting, and you should discount its projections accordingly. The two halves can also diverge — strong income but a weak sale, or vice versa — so look at both distributions and total return. So realized-versus-projected tells you whether a sponsor's projections have historically been reliable, which is what you need to judge the projections in front of you.
How long is a typical DST hold period?
Most DSTs are marketed with an anticipated hold of roughly five to seven years, though the actual hold is determined by the sponsor's judgment, market conditions, and the property's business plan. Some deals sell sooner if conditions are favorable; others run longer if the sponsor cannot sell profitably on schedule. Reading hold periods across a sponsor's completed deals tells you how their real timelines have compared to what was anticipated and how much they vary. Both extremes deserve scrutiny: a string of very short holds might reflect skilled opportunistic selling or fee-driven churning, while holds that ran well past the anticipated window might reflect patient value creation or deals that could not be sold on time. Because a DST is illiquid and you generally cannot exit early, the realized hold is the period your capital is genuinely committed. So while five to seven years is typical, the realized hold can vary, and a sponsor whose holds cluster near expectations is easier to plan around than one whose holds are erratic.
What are drawdowns in a DST track record?
Drawdowns are the deals in a sponsor's track record that underperformed — those that paid below-projection distributions, suspended distributions during the hold, sold at a loss, or returned less capital than investors originally put in. Every honest, lengthy track record will contain some, because real estate carries real risk and not every deal goes to plan. What matters is not only whether a drawdown occurred but how the sponsor handled it: did they communicate transparently, take corrective action, and ultimately recover as much capital as possible, or did they go quiet and leave investors in the dark? A track record showing zero drawdowns across a long history and many deals is either genuinely exceptional or incompletely disclosed, so it warrants a careful look at the record's completeness. So drawdowns reveal both the downside the sponsor has actually experienced and, more importantly, how they behave in their worst deals — which is a strong signal of how they will treat you if your deal hits trouble.
How do I know a track record is complete?
A track record is only trustworthy if it is complete, so confirm you are seeing every full-cycle deal — not a curated selection of the wins. Ask the sponsor for a full, deal-by-deal accounting of every offering that has gone full-cycle, including the ones that underperformed. Watch for selective presentation: a record that omits weak deals, blends still-open offerings into 'realized' figures, or reports only a single aggregate number rather than deal-level detail should prompt more questions. Also understand how the returns are calculated — whether they are simple averages or capital-weighted, whether they include or exclude fees and load, and whether projections are compared to realized results on a like-for-like basis. Reputable sponsors and the broker-dealers that sell their offerings present this data consistently and can explain their methodology; vague or shifting definitions are a warning sign. Where possible, cross-check the figures against the offering's PPM and the broker-dealer's independent due diligence. So completeness plus consistent methodology is what makes a track record usable.
Does a strong track record guarantee future returns?
No. Past performance does not guarantee future results — that is not just a disclaimer, it is a real limitation of any track record. The deals that have already cycled played out in their own market, rate environment, and tenant conditions; the deal in front of you is different. A strong full-cycle record raises your confidence that a sponsor can execute and return capital, but it does not eliminate the risk that this particular property, in this particular market, underperforms. Likewise, a sponsor's projections for a current deal remain assumptions even if their past projections proved accurate. So treat a strong track record as meaningful evidence that improves your odds, not as a promise of any specific outcome. It should be weighed alongside the specific property, its debt, the fee structure, the team, and the risk factors in the PPM. A track record narrows the field of sponsors worth trusting; it never makes a future return certain, and distributions and returns are never guaranteed.
How does a track record fit into broader DST due diligence?
A full-cycle track record is one important input among several, not a stand-alone verdict. It tells you whether a sponsor has historically executed and returned capital, which is foundational — but it does not by itself tell you whether a specific offering is right for you. Round out the picture with the sponsor's experience, team, and assets under management; the specific property's location, sector, tenancy, and condition; the debt on the deal (loan-to-value, term, and whether the rate is fixed or floating); the fee structure and load; and the risk factors disclosed in the private placement memorandum. The track record helps you decide which sponsors to take seriously; the property- and deal-level analysis helps you decide whether a particular offering fits your goals and risk tolerance. So use the track record to vet the sponsor, then layer in deal-specific due diligence — and run the whole picture past your broker-dealer, who conducts independent due diligence, and your tax and legal advisors. The track record is the starting point, not the finish line.
What is the difference between an open and a full-cycle deal?
An open deal is a DST offering that the sponsor still holds and operates — it has not yet been sold, so its outcome is unknown and any return figure is an estimate or interim mark, not a realized result. A full-cycle deal is one that has completed the entire journey from acquisition through the operating period to a final sale and return of capital, so its outcome is realized and known. The distinction is critical for reading a track record: only full-cycle deals tell you what actually happened when the sponsor had to sell and return investors' money. A 'track record' built mostly from open, marked-up offerings can look impressive while proving little, because the hard part — exiting profitably and returning capital — has not yet been tested. So when you evaluate a sponsor, focus on the full-cycle deals for evidence of realized performance, and treat open-deal figures as provisional. The mix of full-cycle versus open deals also tells you how much realized history actually backs a sponsor's claims.
How are DST track-record returns usually calculated?
DST track-record returns can be presented in several ways, and the method changes how the numbers look, so it pays to understand the methodology. A realized return on a completed deal generally combines the distributions investors received during the hold with the gain or loss at sale, expressed either as a total return, an annualized return, or an internal rate of return (IRR) that accounts for the timing of cash flows. Across a portfolio, sponsors may report a simple average across deals or a capital-weighted average that gives more weight to larger offerings — and these can differ meaningfully. Returns may be shown gross or net of fees and load, which also changes the figure. Because of this variability, ask the sponsor or broker-dealer to explain exactly how a stated return is calculated and whether projections and realized results are compared on a like-for-like basis. So there is no single universal formula; understanding the specific methodology behind a number is essential to comparing sponsors fairly and judging realized-versus-projected honestly.
Should I avoid a sponsor with any losing deals?
Not necessarily. A sponsor with a long history and many deals that shows zero losing deals is either genuinely exceptional or has not disclosed the full record — so a spotless record can be a reason to dig deeper rather than to relax. Real estate carries real risk, and even skilled sponsors experience deals that underperform, especially across different market cycles. What matters more than the mere presence of a losing deal is how the sponsor handled it: did they communicate transparently with investors, take corrective action, and recover as much capital as possible, or did they go silent? A sponsor that has navigated a difficult deal honestly and competently may be more trustworthy than one whose record shows only wins. So rather than screening out any sponsor with a losing deal, evaluate the full distribution of outcomes, the proportion of deals that met expectations, and the sponsor's behavior in its worst situations. Honest disclosure of a few drawdowns, well-handled, is a sign of credibility, not a disqualifier.
How does a track record relate to the risk factors in the PPM?
A track record and the private placement memorandum's risk factors are complementary, not interchangeable. The track record looks backward, showing what has actually happened across a sponsor's completed deals — realized returns, hold periods, consistency, and drawdowns. The PPM's risk-factors section looks forward, disclosing the material risks that could affect the specific offering in front of you — market and tenant risks, financing and interest-rate risks, liquidity and sponsor risks, and tax and structural risks. Read together, they tell a fuller story: the track record shows how the sponsor has navigated risks like these in the past, while the PPM tells you which risks are most relevant to this particular deal. A strong track record does not erase the risk factors, and disclosed risk factors do not negate a strong record — both deserve careful reading. So use the track record to assess the sponsor's historical execution and the PPM to assess the specific deal's risks, and weigh them together with your broker-dealer and advisors before deciding whether an offering is suitable for you.
Where do I get a sponsor's full-cycle track record?
A sponsor's full-cycle track record is generally available from the sponsor itself and from the broker-dealer that distributes its offerings, which conducts independent due diligence on sponsors and their deals. Ask directly for a complete, deal-by-deal accounting of every offering that has gone full-cycle — including underperformers — rather than a summary highlighting only the wins. A reputable sponsor will provide this and explain the methodology behind the numbers; reluctance to share full detail, or a record that blends open deals into 'realized' figures, is itself informative. Your broker-dealer can help you obtain, interpret, and cross-check the data, and can compare a sponsor's record against others in the market. Where possible, also review the disclosures and risk factors in each offering's PPM. So you obtain the record by asking the sponsor and broker-dealer for complete, deal-level full-cycle results, then verifying completeness and methodology. The quality and transparency of what you receive is part of the due diligence itself — how a sponsor presents its record reflects how it does business.
Can two sponsors with similar returns differ in quality?
Yes, significantly. Two sponsors can show similar headline returns yet differ markedly in quality once you look beneath the average. One might have produced steady, consistent results across nearly all of its deals, while the other's average is propped up by one or two outliers masking a wide spread of good and poor deals — the full distribution of outcomes matters more than the mean. They may also differ in how they calculate returns (gross versus net of fees, averaged versus capital-weighted), how transparently they disclose drawdowns, how consistent their hold periods have been, and how they communicated and acted during difficult deals. Two sponsors with the same average return but different consistency, transparency, and downside behavior are not equally trustworthy. So do not stop at the headline number — examine consistency, the distribution of outcomes, methodology, and conduct during the worst deals. Often the way a sponsor handles its weakest deals and presents its record reveals more about quality than the average return itself.
How does Baker 1031 help me read a sponsor's track record?
We help investors read a DST sponsor's full-cycle track record — understanding what the record shows, comparing realized returns to original projections, reading hold periods across deals, interpreting consistency and drawdowns, and verifying the record's completeness — so you can vet a sponsor's ability to execute before committing your exchange. DST interests are securities offered through the broker-dealer, Aurora Securities, Inc. (member FINRA/SIPC), to accredited investors after a suitability review and consistent with Regulation Best Interest. We help you obtain and interpret a sponsor's full-cycle results, ask the right questions about methodology and completeness, and weigh the record alongside the specific property, its debt, the fees, and the risk factors in the PPM. Baker 1031 does not provide tax or legal advice; your CPA and attorney handle your specific situation. We are candid that a track record is evidence of past execution, not a promise — past performance does not guarantee future results, and distributions and returns are never guaranteed. Our role is to help you read the record clearly and invest only when an offering is suitable for you.
Glossary
- Full-Cycle Deal
- A DST offering taken from acquisition through final sale and return of capital.
- Track Record
- A sponsor's documented history of completed deals and their realized results.
- Realized Return
- The actual total return a completed deal delivered, including the sale.
- Projected Return
- The cash-flow or total-return expectation an offering launches with.
- Hold Period
- The time from a DST's acquisition to its final sale.
- Drawdown
- A deal that underperformed, suspended distributions, or lost investor capital.
- Consistency
- Whether most of a sponsor's deals landed near projection.
- Internal Rate of Return (IRR)
- A return measure accounting for the timing of cash flows.
- Capital-Weighted Return
- An average that weights deals by the capital invested in each.
- Cash-on-Cash Yield
- Annual distributions as a percentage of invested capital.
- Open Deal
- An offering still held and operated, with an unrealized outcome.
- DST Sponsor
- The firm that acquires, manages, and sells a DST's property.
- Suitability Review
- The process confirming a DST fits an investor's situation.
- Regulation Best Interest
- The SEC standard governing broker-dealer recommendations.
- Private Placement Memorandum (PPM)
- The disclosure document detailing a DST offering and its risks.
- Past Performance Disclaimer
- The principle that prior results do not guarantee future returns.
Sources & References
- IRS. Revenue Ruling 2004-86 — Delaware Statutory Trusts and Section 1031
- FINRA. Regulation Best Interest (Reg BI)
- FINRA. Real Estate Investments
- U.S. Securities and Exchange Commission. Regulation Best Interest
Disclosures
This article is published by Baker 1031 Investments, LLC for general educational purposes for accredited investors and is not an offer to sell or a solicitation of an offer to buy any security, nor is it tax, legal, accounting, or investment advice or a recommendation. Any securities offering is made solely through a sponsor’s private placement memorandum (PPM) following a suitability determination. Securities offered through Aurora Securities, Inc. (ASI), member FINRA / SIPC; Baker 1031 Investments is independent of ASI.
Oil & gas mineral and royalty interests and DST programs are speculative, illiquid securities sold only to verified accredited investors and involve substantial risk, including possible loss of principal, commodity-price and production-decline risk, lack of control, and the risk that an intended 1031 exchange fails to qualify for tax deferral. Whether a particular interest qualifies as like-kind real property is a fact-specific legal determination that varies by state and by the terms of the instrument. Tax results depend on your individual circumstances. Consult your own CPA and attorney before acting. Past performance does not guarantee future results.
