Retire off your Real Estate!

1031 DST Exchange
Opportunity Zones
1031 Rescue Plans

How Can i Help?

Real Estate / 1031 DST Exchange


GDF Financial can help their clients produce passive income and defer capital gains from the sale of their real property.

How do you retire from owning investment properties?

If you sell, you can owe a huge check to the IRS. A 1031 exchange into a new property can open a new can of unfamiliar worms!

If you could sell your property without paying taxes, keep an income, and never manage people or properties again, would you do it?

If you have over $100k in gains from any investment property, farm, or business would you want to shield those gains from the reach of the Internal Revenue Service?

Would you want better control of that money?

Helping you and your family protect and control these gains is our mission. How?

What if you were to own a small piece of a large industrial or commercial property in the United States?

What if you could select from properties from across the country, all professionally managed, producing income, with a team of experts behind you to walk you through the entire process?

A-rated properties with A-rated tenants professionally managed. If you want to protect your hard-earned gains that you created from your farm or business, or are just tired of tenants, toilets, and trash then contact us.

If you could sell your property without paying taxes, keep an income, and never manage people or properties again, would that make sense for you?

1031 Exchange

A 1031 Tax Deferred Exchange is where real property held for productive use in a trade, business, or for investment, is exchanged solely for real property of like kind which is also real property to be held for productive use in a trade, business, or investment. Properties such as commercial properties, rental properties, industrial properties, farmland, oil rights, timberland, or essentially any real property used for generating income would be considered eligible property. The Exchange allows any gains or recaptured depreciation to be transferred into the new property and taxes deferred until such time as the new property is sold.
DST 1031 Exchanges

A DST, also known as a Delaware Statutory Trust, is a trust protected through Delaware law. It is a securitized investment which allows investors to own fractionalized shares in investment grade real estate with other accredited investors. The fractional ownership can allow for the nonrecognition of capital gains taxes and recaptured depreciation under section 1031 of the Internal Revenue Code while providing the benefits of Real Estate ownership.


Close Quickly – Closings can occur in a couple of days if needed though most occur within a few weeks.

Backup Plan – If an investor’s primary property fails to close a DST can be a quick alternative to preserve gains.

Retirement Income – Many DSTs are designed to provide an additional source of income, often tax advantaged.

Passive Investment – A professional trustee is the single decision maker on behalf of the investors.

Protection– The investor is protected from creditors and legal liabilities.

Restart Depreciation – Restart the clock on depreciation, possibly for a larger amount.

Estate Planning – Fair and even ways to distribute assets to beneficiaries quickly and help preserve family unity.

Diversification– Ability to invest in multiple properties in multiple states among multiple commercial sectors

Tax Sheltered Cash Flow – Direct ownership in real estate keeps all tax deductions which include depreciation and loan interest.

Access to institutional-quality real estate – DSTs might allow investors to acquire partial ownership in properties otherwise out of reach.

Low flexible minimums – Investments of $100,000 and above can protect all your gains and leave nothing on the table.

Step up Basis – All the gains and depreciation owed to the IRS disappear when you pass the properties to your beneficiaries.

Why Not?

The property is typically sold in five to seven years in a good market.

Most loans on the property are for 10 years and sponsors try to get the highest valuations but are subject to market fluctuations.

There is no developed secondary market for DSTs making them completely illiquid.

Once the Equity is raised for a DST no more contributions can be made.

Adequate reserves for maintenance and repairs can be held but all other proceeds must be distributed to the beneficiaries.

The existence of various conflicts of interests between the master tenant and property managers.

Reliance on a master tenant.

Properties can lose value.

There are costs and fees associated with these transactions.


Rules Since an investor may not take constructive receipt of any funds during a 1031 Exchange a Qualified Intermediary (QI) must be used. The QI escrows the proceeds from the relinquished property’s sale and funds the replacement property.

1031 Exchange Timeline

Day 1 –The day your property sells.
Day 45 –Identify replacement properties no later than this date.
Day 180 –Acquire replacement property.  

Everything must have been completed by this 180-day mark. All days are calendar days, no exceptions.


The benefits for each investor depend on their situation and location but the following hypothetical may highlight the potential impact and advantages of a1031 DST Exchange. With Capital Gains and other taxes deferred your post-closing investable net proceeds may be much greater. Potentially generating a higher current yield, future gains, or possibly greater after-tax retirement income.

Sale of Property

Purchase Price
Adjusted Cost Basis
Sales Price
Total Taxable Gain

Federal Long Term Capital Gains Liability (20% of $800,000)
State Tax
Net Investment Income Tax
Depreciation Recapture
Total Taxes Due
Net Proceeds for Investment

Pays Taxes




1031  DST Exchange





An accountant friend of mine had a client who owned a small apartment complex which he ran and maintained. Twenty-three units may not seem like a lot, but it kept him busy six days a week. In his early 60’s he wanted to retire but wasn’t sure how.

If he sold the property, he would get his time back. He could travel to Minneapolis to see his daughter and two grand-kids more often, travel with his wife, and do what he liked. The issue with selling was that he still needed to generate an income. Selling the property and investing the money would mean paying taxes on gains and depreciation recapture. That would add up close to 25%, or $250,000 off $1,000,000. Generating income off 75% of his assets made it difficult. His financial advisor told him to invest the money in a portfolio of stocks and bonds and not to take more than a 4% distribution. Many in the academic community such as Wade Pfau, president of the American College, suggests that to achieve a 90% success rate of not running out of money over 30 years is to take even less, 2.4%! Even at a 3.5% distribution he would gross just over $26,000 a year. Not enough for his lifestyle. Selling was not an option.

Keeping the property would create more income but at a cost. He had used property management companies in the past with mixed results. Some were apathetic and simply didn’t follow through on what they’re supposed to do, others billed extra fees for things he thought should just be part of the service. Perhaps the ultimate problem stemmed from the fact that the property management company and he weren’t aligned in their interests. The property management company wouldn’t want to raise rents because it might mean more vacancies for them. The owner would still be on the hook for big expenses, especially if the property wasn’t properly maintained. He still carried the risk of having all his eggs in one property and could take a big hit if the local economy faltered or neighborhood declined.

The third option was a 1031 Exchange. 1031 refers to the section of the tax code which allows you to transfer gains from the property you own to a new property without incurring any capital gains taxes. This wouldn’t help him since he had no desire to start over again with a new property he knows little about.

He believed that those were all his options, but there was a fourth. It’s called a 1031 DST Exchange. Like a 1031 Exchange except the property would be in a Delaware Statutory Trust. This would allow a fractional interest in many properties with absolutely no management responsibilities.

He would no longer own a single property; he would own a fractional interest in 14 properties in six different states. Rather than just one apartment complex he would have interests in 3 multifamily complexes in Texas worth over $120 million, several health centers in the southeast, a few storage facilities in the north, and grocery stores in New England with a well vetted tenant. His $1 million dollar investment would be diversified offering some protection against local economic failures, industry failures, and the loss of any single property.

More importantly the companies which run these properties, called sponsors, may have their interest better aligned. When the property does well, they do well and when the property suffers, they are the first ones to take the hit. It is a carrot and stick approach. Also, they make money from the sale price of the property giving them incentives to raise rents and maintain the property.

Of course, no two interests can ever align perfectly. Perhaps the downside is that the sponsor will sell when they believe they can maximize profits and that might not correspond with his timing. Once they sell the property in five to ten years, he has the option to reinvest or take the money. If he continually reinvests his beneficiaries will receive a stepped-up cost basis when he passes.

Since he didn’t pay taxes from the sale, he was able to generate income off the full $1,000,000 and at a rate of 4%. That’s a $14,000 a year increase from a traditional stock and bond portfolio with all the favorable tax treatments of real estate.

The 1031 DST Exchange gave him all the benefits of owning real estate with all the responsibilities of owning a share stock. Not a bad retirement.

1031 DST Exchanges – A Curious Creature - Stock or Real Estate?

When people typically hear about a real estate investment,they are referring to Real Estate Investment Trusts (REITs) or mutual funds owning a real estate portfolio. Those can be great investments, but they don’t provide so many of the benefits of Real Estate investing, such as the depreciation deduction or the interest write off. On the other hand, a direct investment into real estate can secure those great tax benefits but put the owner on the hook for liabilities and maintaining the property. Is there a passive real estate investment that can provide some of the benefits of stock ownership yet offer the tax benefits of real estate? A 1031 Delaware Statutory Trust(DST) Exchange may be the answer.

A 1031 DST Exchange is often used as a retirement or estate planning tool for clients who want out from under their investment property or business but would like to keep their money working and defer taxes. The Client sells their property and uses a 1031 Exchange to directly invest into properties organized under the trust. Because it is organized as Delaware Statutory Trust it is treated as a passive investment and regulated by the SEC but provides all the benefits of direct property ownership.

What are some of the advantages of owning property through the Delaware Statutory Trust which converts it into a passive investment, like a share of stock?

1)     Limited Liability – Liabilities stemming from a lawsuit or creditors won’t affect the owner. They can only loose what they invested unlike an ownership interest where the owner can be personally liable and loose more than they invested.
2)     Similar to a stock they can be much simpler to acquire than acquiring real estate on your own. Simply select the properties you like and purchase whatever percentage you like. Unlike stock, however; this is not a liquid investment that can be cashed out at any time. One of the advantages of stock ownership is its secondary market.
3)     Rather than owning one or two properties, often in a local area, the 1031 DST allows for the ownership of multiple properties in any number of states. For just a few hundred thousand the portfolio could consist of 12 to 15 properties in in 5 or 6 states to provide maximum diversification.Just like owning a portfolio of stocks one can now own a portfolio of real estate.
4)     Another advantage of owning a passive investment is the ability to pool your money with others and own businesses and properties otherwise unattainable. 1031 DST properties often allow someone direct ownership in $50 to $140 million dollar properties with as little as $100,000.

Unlike its stock like qualities, real estate offers some fantastic advantages as well! Here’s where real estate investing can shine:

1)     DST properties provide cash flow. Many people use real estate to generate a passive income. This can be a simple straight forward calculation and a lot less susceptible to stock market risk.
2)     Tax breaks and deductions. While common stock offers very little in the way of helping with taxes, real estate has historically been a tax advantaged investment. It’s not what you make it’s what you keep.
3)     Potential for appreciation of value. Real Estate like stocks, can increase in value over time. There is no guarantee of growth with either a common stock or real estate, but both can have unlimited upside.
4)      Build equity, one of the great advantages of real estate is having someone else, your tenants, pay off your property. Over time each payment they make creates an increasing rate of equity for the investor.

There are of course disadvantages to the 1031 DST Exchange properties. The operation of the property is completely in the hands of the management, just like stock ownership in any major company. For those that wish to skip the toilets, tenants, and trash this might be an advantage. Also, the timing of the sale is at the sole discretion of the sponsor. Since they make money on the disposition of the property, they have a very strong incentive to maximize the sales price and will sell when they believe they can get the best price. That timeline might not align with the clients.

The 1031 DST Exchange is unusual in that it behaves like both a stock and a direct investment into private real estate. For those that understand the value of direct real estate investing but want the ease of stock ownership this may provide both.


Glenn D. Fredrickson

With over 30 years in Real Estate & Private Equity experience, 13 of which in the Financial Services industry, Glenn has worked with both the public and private business owners.

Prior to starting his own company, he was head of Transamerica’s distribution for tax efficient products throughout Oklahoma, Kansas, and Arkansas. As regional Vice President of Transamerica he brought in more than $750 million dollars of assets.

The ultimate goal is to help people save, invest, protect, and retire. Along the way he has given 100’s of live seminars to thousands across the country on topics such as Social Security Planning, Retirement Income Planning, and Legacy Planning.

Glenn started his career in Real Estate during the early 90’s. From there he ventured out as a broker emphasizing commercial properties and businesses. He later joined Plexus Associates, a small to mid-market intermediary, as a Managing Director. His focus was the sale and the raising of Private Equity for small to mid-sized businesses. There he discovered the importance of helping business owners transition away from their business into investments and legacy planning before joining Transamerica in 2008.

Glenn knows that you have worked hard for your money, and he will work just as hard to grow and protect it. His job is to provide you the tools, services, and resources you need to make your retirement journey a successful one.

Glenn and his wife Renee live in Edmond, OK where he services his clients throughout Texas, Kansas, Oklahoma, Arkansas and Tennessee. They have two kids, one dog, and two cats. He loves to read, fish, golf, and he also competes on a competitive BBQ team.
Glenn and his wife Renee live in Edmond, OK where he services his clients throughout Texas, Kansas, Oklahoma, and Arkansas. They have two kids, one dog, and two cats. He loves to read, fish, golf, and he also competes on a competitive BBQ team.

Contact form

If you would like a Brochure or a detailed Executive Summary, please let us know!
Include your address if you would like a hard copy as well.

Also, Please indicate if you are within your 45 day period, need to close quickly, or have any other special needs or requests.

Fields marked with an asterisk (*) are required.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.