In recent years, non-traded and perpetual life REITs (REITs that don't have a predetermined termination date, allowing them to operate and reinvest capital continuously without a forced dissolution) have emerged as attractive vehicles for real estate investors, especially within the 721 UPREIT DST structure. While these vehicles offer potential benefits, investors need to be wary and scrutinize several key financial metrics to avoid hidden pitfalls.
Our firm reviews scores of new DST and 721 UPREIT offerings and DST sponsor companies each year. We take our due diligence process very seriously, ensuring that each potential offering is strictly vetted before it is allowed to be posted on our www.kpi1031.com marketplace. Our goal is to provide our clients with thoroughly reviewed investment opportunities, allowing them to make informed decisions when considering Delaware Statutory Trusts (DSTs) and 721 UPREIT investments.
As we are considering a DST or 721 UPREIT offering and/or a sponsor firm, some of the items that we may potentially utilize in our due diligence process are outlined below.
- (9:56): Is your REITs dividend built to last? (Link to Transcript)
- (15: 50): Where do you look to find hidden fees in a REIT PPM? (Link to Transcript)
- (18:18): What is a non-arms length Transaction? (Link to Transcript)
- (24:07): What is optionality and why is it so important for DST investors? (Link to Transcript)
Tim Emanuel (00:00):
Thanks everybody for joining us today. My name's Tim Emmanuel. I'm one of the, uh, vice presidents here at K Properties and Investments. Today for our weekly webinar, we're gonna be jumping into some of the due diligence 1 0 1, uh, issues that you should cover with hopefully K properties representative on the 7 21 exchange, upreit DST investments that we're seeing in the marketplace. Before we get started, I just want to, uh, go ahead and make sure that we cover the risks and disclosures. A lot of these pretty obvious, but we're gonna go through 'em real quick too, just to make sure everybody's on the same sheet of music here. The information here in has been prepared for educational purposes only. DST 10 31 properties are only available to accredited investors, which is generally described as somebody having a net worth of a million dollars exclusive of a primary residence or accredited entities, which is generally described as an entity owned entirely by accredited individuals and or with a, uh, gross assets greater than $5 million.
Tim Emanuel (00:57):
You're unsure you should speak with your, uh, CPA or tax attorney to verify IIRC section 10 31 IRC, section 10 33 and IRC, section 7 21 and Delaware. Statutory trust investments are complex financial tax concepts, therefore, you should consult with your legal and tax professional regarding your specific situation. There are risks involved with investing with DSTs and with any other private placements. This includes complete loss of investment principle, illiquidity, tenant vacancies, interest rate risks, declining rental rates, basically anything that would be associated with owning and operating real estate for an investor to qualify. There's also, uh, financial requirements and suitability requirements that must match the specific investments specific objectives and goals, as well as the risk tolerances of the investors. It's important to diversify. We wanna include the safety that could be, uh, that could be in the hedging that can be found through diversification. We also wanna mention that past performance is not indicative of any future returns.
Tim Emanuel (01:52):
It's also important to read the private placement memorandum in its entirety and pay close attention to the risk section prior to investing. Now, while due diligence is an important step in evaluating any investment, it does not guarantee success or prevent losses. All investments carry inherent risks. Uh, let's see. We'll go down to the next section. Okay, so today we're gonna be talking about the due diligence on 7 21 Exchange upbeat DSD investments. We cover in a variety of topics that are related to this across, you know, basically a bunch of issues that we have found through many years, taking a look at, uh, UPBEATS seven 20 ones, which a lot of our DST investors are interested in. So this presentation today is to kind of not only provide the basic level education for questions that you should be asking, but also to show how K property stands out and what we do to help our investors that are taking a look at these.
Tim Emanuel (02:46):
So we're gonna cover what is the 7 7 21 exchange, the two step 7 21 exchange process, how A DST to a 7 21 actually works. And then we're gonna jump in also some of the hot button issues within seven 20 ones that are specific, essentially, problems that you should address. For example, fixed versus adjustable rate loans, dividend coverage, and the true yield, understanding how cash flow risks and, and REITs can work. Uh, we're gonna look at net inflows. We're gonna talk about the hidden fees and markups. We're also gonna discuss tax protection agreements and the importance of optionality when you're looking at these. So, uh, yeah, let's go ahead and, uh, and dive in a little bit about K properties. We are a national investment firm specializing in Delaware statutory trust investments for 10 31 exchange investors. So far, we've helped our team members have helped well over 2000 clients purchase over 9,000 DST 10 31 exchange and 7 21 exchange investments nationwide.
Tim Emanuel (03:44):
And, uh, we are approaching, uh, particip participating in almost 40 billion of DST real estate investments. So what is a section 7 21 exchange? The IRS code defines it and says Section 7 21 that no gain or loss will be recognized when property is contributed to a partnership in exchange for interest in the partnership. Okay? That's their definition of it. So what is the actual exchange exit strategy? It's a two step process, and basically what happens is, uh, you know, your relinquished property is sold and the investor sells that investment property with the intention of executing a 10 31 exchange. Okay? And the DST is a natural vehicle for this process to occur. So the property exchange, so the property exchange for Delaware ary trust interest, essentially what's happening is 10 31 exchange funds are used to purchase the interest in A DSD and then held for a period of time.
Tim Emanuel (04:42):
The 7 21 exchange transaction op units are issued in exchange for those interests in the DST. The interest in the DSD are contributed on a tax deferred basis to the 7 21 vehicles operating partnership in exchange for operating partnership units. So what is happening here? The property is being sold, a 10 31 is happening and the investors going into A DST. And then from there, after a holding period generally, which is gonna be about two years or so, a two year hold allows the 10 31 to be in place and for it to gain, uh, the blessing from the IRS. And then a sponsor company will initiate typically around that time 7 21 exchange into a larger what is usually gonna be a reit. And in exchange for the interest, I'm sorry, in exchange for the funds and the DST, the investor's going to get operating units that, uh, relate to that REIT that they're going into.
Tim Emanuel (05:34):
So here's a quick little schematic here of what that overall process looks like. You, the contributor and the investor goes into the DST property and then the DST via the 7 21 exchange, those proceeds are then moved into the greater reit. So why does somebody do something like this? Well, typically you're looking for liquidity. That's one of the major issues is that potentially if a, a reit everything's functioning correctly, the investor would then have the opportunity to be able to go into something that, where they have the option at a certain time to be able to start taking money out. And so we'll talk about that and dive into that a little bit more. But their, their actual interest in the REIT is determined by the amount of money they put in and which is exchanged into those operating partnership units. Okay? So one of the things to get into, and this is where K properties steps in, because we have, you know, eyes on this, we take a look at these, this issue of going into a re from a little bit different perspective, K properties, like we mentioned before, has been doing this for a very long time.
Tim Emanuel (06:35):
And internally, our own due diligence process has kind of put eyes on some of the things that we're starting to see issues with and that we wanna bring to the attention of the investors. When you do a 10 31, you know, most of our folks are looking for obviously the tax deferral, the passivity of it, and you know, the asset that you're going into. But when you complete a 7 21, you're ending up into a larger, you know, conglomerate, this reit, which has got a lot of other properties with all types of variables that are there. One of the things that we're gonna do is to take a look at some of these issues that are commonly known to potentially cause problems. One of these problems that we know about already is debt. And if you've talked with a K properties representative, you know that when we address debt, 'cause we are risk adverse, we're gonna take a very conservative approach to handling that debt.
Tim Emanuel (07:25):
Well, within a reit, there's two types of debt that you need to be aware of, fixed versus adjustable, okay? And if you remember back 2008 with the problems that adjustable rate loans cost for a lot of investors, probably even folks on this phone, on this phone call here, this webinar here, you can understand why we're looking at, okay? So one of the things that we're gonna take, we're gonna pay attention to is understanding the REITs debt profile. What is the total debt burden on the reit? Okay? And from there, we're also gonna take a look at the REIT and how much of that debt is fixed versus adjustable. And the reason why this is important is because if you're going into one of these investments, and this is your own, where your, your funds are gonna end up, it's important to understand that that amount of debt, whether it's adjustable or fixed, can also fluctuate, okay?
Tim Emanuel (08:13):
Because potentially this is a long-term relationship. When you end up into a reit, you cannot 10 31 back out, okay? It's the end game for those funds. So understanding what happens when your money is there is critical. And one of, obviously one of the issues that we're bringing up here is how that debt can affect that. The risk of adjustable rate debts is rising interest rates, it increases the borrowing costs, okay? Potentially can then reduce the dividends and the financial stability of the 7 21 re okay? When you compare this from a leverage re you compare that to, for example, a debt-free re, the debt-free REIT carries no financial leverage risk. So leverage REITs are exposed to interest rate volatility and foreclosure risk. So you have to ask yourself, what's your risk tolerance? Can you handle the increased risk from adjustable rate mortgages on your investments? Or would you prefer to have more debt-free and lower risk investments?
(09:06):
It depends on what your objectives are. Here at K properties, we are gonna help you, and we're gonna work with our clients that track to actually track the 7 21 upbeat sponsor companies, their debt levels, their debt maturity schedules, and the amount of debt that's floating versus fixed rate. And this is gonna help you make a more informed decision. And the reason why it's, you know, so important is if you look at, you know, any commercial property for that matter, you know, one of the biggest, most complex problems that can create issues for investors is what happens to that debt during the holding period. And when you're in a reit, and again, we just previously mentioned, this is a, a long-term relationship, it's important to be very informed on what's on what you're getting into. So we're also gonna discuss the dividend coverage and the true yield, which we feel is a critical measure for our investors that are looking at doing a 7 21 exchange upgrade.
(09:56): Is your REITs dividend built to last? (Back to Top)
Okay? And the question here to ask is, is your REITs dividend built to last? So one of the metrics that we're gonna look at is called the adjusted funds from operation. And we feel that this is a true yield indicator, and it measures if the dividends that are actually being paid out to the investors are being actually funded by the earnings from the real estate, or are they borrowed funds in new investor capital. Okay? So the A FFO, the coverage, if it's below a hundred percent, generally what that's gonna mean is that the dividends are relying on debt or new investor capital, okay? And so it becomes a big red flag when dividends, you know, and dividends are an illusion when we start seeing the con the opposite happen here. And this is typically gonna be, you know, res paying unsustainable inflatable dividends that are just not, they're just not built for the long haul.(10:47):
I mean, it, you know, serves the reason if they're putting out more money than they're taking in, you know, you're seeing cracks in the foundation, okay? And so when this occurs, it can also mask instability with greater issues with inside the green. So relying on outside funding in these REIT signals with potential future dividend cuts or liquidity issues. When you're in a reit, when you're in any of these investments, the sponsor company has the ability to potentially cut those dividends if there is a liquidity issue or a problem, okay? And so you can get ahead of this by, you know, talking with your representative about what some of these metrics and what some of these numbers look like when you are targeting a REIT or A DFT that potentially is going into a reit. We can get ahead of it by taking a look at what the numbers are showing us now, is it an accurate picture of what's gonna happen in the future? You know, who's to say we, there's a lot of black swan events that could pop up. Take a look at the recent volatility and the changes we've seen on the economic environment from on a national scale that have been occurring over the last couple months. And these situations were not necessarily expected. So if we can go into these types of
(11:53):
Decisions and complete these types of exchanges with eyes on how these REITs are actually functioning. Now, if we're seeing problems or seeing strength, it would be important to understand that because we don't know what the future's gonna hold. So the 7 21, the tip here is avoid making, what we like to say is avoid making critical decisions based solely on your relationship with a financial advisor or the REITs, the potential REIT sponsor company. They're going to their impressive size and scale. These decisions need to be made on the REITs actual financial performance. And the way we, the reason why we're saying that, and the way that we feel this is, you know, a safeguard for investors to go into these things eyes open is because what we're noticing is a lot of the larger institutions, the big wirehouses and whatnot, they have a limited supply of DST and REIT options.
(12:41):
And some of these, when we kind of dive in and look underneath the hood, they're not necessarily set up for sustainable. What we feel are gonna be sustainable, long-term stability. There's cracks there. We can dive into a little bit more about that and just add over the next slides here. One of the things that we're looking at, and one of the reasons why, one of the things that we are seeing that is potentially an issue right now is the net inflows versus outflows. Okay? It's important to understand how cash flow risks can impact REITs and their stability. Okay? So a simple example, a REIT raise is $50 million, okay? But, you know, let's say they raised $50 million in year 2024, but they're gonna see, you know, let's say hypothetically they saw $200 million in withdrawals, okay? So that means it has a net outflow of $150 million. This creates a massive liquidity issue for investors that are trying to get their money out.
(13:34):
Again, one of the number one reasons that we've mentioned ahead of time that you would want to go into a REIT and want to do a 7 21 is the potential for liquidity, right? So if the REIT gets into a situation where outflows are far exceeding the inflows, they might be able to pay and support that for a certain amount of time, but eventually they're gonna have to probably cut those cash flows and start denying the liquidity requests that are coming in from investors. So it's something that you should be aware of. Now this, these statistics and the numbers that are related to this are published, we pay attention to it, we actively track it. So we can see on a quarterly basis for most of the REITs we can see are they keeping up or are they experiencing more outflows than their inflows, which would signal that potentially liquidity could be a problem in the future moving forward, again, this is a great thing to bring up with your K properties rep.
(14:24):
These are active metrics that we follow. Like I said before, it's something that we are paying attention to because, you know, ultimately when you go into one of these investments, if the ultimate plan is, you know, a couple years down the road to have a liquidity event or the ability to take money out, and then all of a sudden, you know, maybe three to four or five years down the road, the economic picture doesn't look as rosy as it did before. This is something to consider. We don't know what's gonna happen in the future, but if we're seeing, you know, if we have a, a need for liquidity or we have a need to be able to, uh, have some type of event where we can get our hands on this and you can't, it could potentially cause a problem. Another issue that we see within the ppms, and a lot of our, uh, our analysts that review these ppms have been highlighting and taking a look at is, uh, the issue of hidden fees.
(15:08):
Okay? So a lot of times the markups are disclosed, but they can be hard to find. And I know the ppms, it's a thick document. We've got some that are a couple hundred pages, we've got some that are several hundred pages. It's a lot to read, but it's very important to dive into it. And we also understand at k properties that, you know, most folks do not have necessarily the time to be able to really sit down with a highlighter and a pen and underline and, and figure out, okay, well this is saying this and this is saying that. So we're, we're, you know, obviously it's not, you know, we're, we're not gonna find everything or see everything or predict everything about what could impact an investors' money. Negatively, negatively. But, uh, we, we are gonna definitely pay attention to the ins and outs of what's going on in these ppms.
(15:50): Where do you look to find hidden fees in a REIT PPM? (Back to Top)
And one of the issues that we've seen buried in here is that, you know, there are hidden markups and fees that are not necessarily the easiest to find. Now, traditionally, when you look at A-D-S-T-P-P-M, we always encourage our investors to, you know, not only just read the whole thing, but also pay attention to the estimated use of proceeds page, because this is where you're gonna see a lot of the fees that are associated with syndicating and bringing these and operating these investments, okay? But sometimes, especially with what we're seeing with some of the, the re paperwork and some of the other different, you know, financial tools that are bringing these funds into the REITs is that the estimated use of proceeds page excludes some of the markups. And this matters because, you know, as an investor, you're trying to go in there oftentimes, you know, looking for minimal fees, you could potentially be unknowingly overpaying.
(16:39):
The lack of transparency definitely leads to the potential for misaligned expectations and an increased financial risk. So what do you do? Well work with a team that specializes in DSTs. Okay? I love the analogy that we put in here and it's, it's one that I've tried to give to investors for a long time now, I, I was in the military, had a good number of injuries, and I've had, you know, at this point, close to a dozen different orthopedic surgeries, okay? I would never personally go to my general practitioner to perform, you know, a knee surgery or a shoulder surgery. I, I would go to an orthopedist and a specialist at that within that particular field. Alternative investments, private placements, same thing. And, and way too many wealth managers and financial planners, you know, are selling up rets 7 21 processes to, you know, their investors and they're be they're being given information that, you know, understands the basics of, of how this benefits, but there's more below the surface that you need to pay attention to.
(17:37):
So one of the things that we're doing is we are tracking which 7 21 UPREIT sponsors are marking up their DSTs and for what amount. We're taking a look at a lot of these fees that are discussed within the ppms that might not be always super, you know, obvious to most investors that are, that are flipping through the pages trying to figure out what the business plan looks like and what they need to be aware of. And the reason why we're doing this is because, you know, obviously we are specialists, we are leaders in the field. We've been doing this for a very long time. But the reality here is we want our investors to make informed decisions and to protect what they have. They're hard earned money, right? Like that's, that's the ultimate goal here is know what you're getting into. So ask the right question.
(18:18): What is a non-arms length Transaction? (Back to Top)
There's, you know, that's a, a key part of this slide here and understand that there, there are hidden markups, 7 21 markups are gonna impact your investment. And so some of the things that you can, you know, maybe pose to your financial advisor or even your K properties rep, if you're, you know, talking directly with us, you know, one of the things you could bring up is, is this an affiliated transaction whereby the REIT already has owned the property and is now selling it to the DSG investors. This is, you know, we refer to a non arms length transaction, this is a red flag and it could signal a hidden markup. And here's why. Because if they're selling it, and again, we've, we've seen this when we take a look at, we've taken a look at some of the history on these transactions, like how they're created, how the d you know, how they become a property becomes a DSD, you know, did the REIT mark up the DST price in the process in some REITs we found can sell their properties to the DST at a 20% markup.
(19:11):
And it's kind of, it's kind of shocking, but it, it does happen. And this is something that you should be aware of if this is a potential tool that you want in your toolbox. 'cause you know that that is definitely an inflated value, potentially an inflated value that you would want to be aware of, right? REITs and financial advisors may also claim no or minimal fees. Well, these things, you know, they, they do cost money to operate and they do cost money to be able to syndicate. And, you know, while markups quietly increase investor costs oftentimes are much more tradition, much more than traditional DSTs. And it matters because it can signal that the asset underlying is overvalued and, uh, high markup, uh, is basically, uh, you know, an additional hidden fee that could potentially reduce your returns on the investment. So what do you wanna look for?
(19:56):
You wanna compare the properties prior valuation versus its 7 21 Upreit DST sale price. So there you're gonna be able to see the discrepancy in the price, which is gonna give you a little bit of insight as to how they're making the deal work, but also, you know, the barriers for when that property or when down the road, how those properties are sold and how that profits realized at that point too. One of the things as we're kind of nearing the end of this is the, uh, tax protection agreements. This is a little known, uh, and rarely discussed potential problem for investors that are inside of reit. So what is a tpa, as we call, it's a contract where the REIT agrees to indemnify investor tax liability if a contributed property in the REIT is then sold without a seven, I'm sorry, without a 10 31 exchange, okay?
(20:45):
And many 7 21 up res are gonna lack a, a tax protection agreement, or they're gonna have a short protection two to five year period. And so what happens, what's the consequence here? Well, you as the investor can face a pretty sizable, potentially sizable, unexpected tax bill if the REIT sells a property prematurely and does not complete a 10 31. You, you'll find this language in many of the, uh, REIT ppms. We're happy to walk you through it. We, again, we track these, but it is one of the potential casualties of being involved in a reit. If a property does get sold and there is some type of tax obligation, it does get passed on to the investors. So we, a lot of times the REITs will, if they're going to do it, they'll put in a TPA, which is then gonna, they're basically committing to pay any tax bill that comes up for a certain amount of time.(21:34):
We track those, it's nice when they do it, but a lot of times, frankly, the TPAs are short, like they're two to five years, right? And again, if you're an investor where this is the end game for those funds, you know, if you're going to commit, you know, you know, let's say you've got a $10 million exchange or a $20 million exchange or, or even a hundred thousand, a hundred thousand dollars ex exchange, right? If you're committing those funds to a REIT for a long period of time and your TPA is only two to five years, and that money's gonna sit there for the next five to seven and properties are gonna inherently, you know, be sold within the reit, you know, you could potentially be facing tax bills that you were not expecting. And so that's one of the things that we've also keyed in on and trying to, uh, to pay attention to, to make, again, make sure that you can, uh, be well aware of what's going on and the things that you need to expect when you're in this long term marriage to a ret.
(22:26):
One of the case studies that we like to point to is the, uh, archstone, the, uh, empire State Realty Trust back in, uh, 2008. If you'd like more information about this, you could probably Google and take a look, uh, the basics of what happened there. But I'm happy to send you articles and case studies that we've done on this and we definitely think it's something that investors should be aware of as they're looking at the possibility of completing a 7 21. Lastly, one of the things, well, not lastly, but one of the, you know, towards the end here, one of the things that we've really been putting an emphasis on lately, you're gonna see the updates on the K properties, the inventory page, but we are identifying whether the upbeat participating in upbeat is gonna be a forced situation or optional. Okay? You'll a lot of the large wirehouses for a lot of the larger institutions, the DSTs they're putting out are, uh, what we call forced up res.
(23:17):
Meaning that when you go into it, you know that down the road, two to five years, whenever that process is gonna unfold, you are going into a a re okay? And many are sold on this as a good idea, I guess they're sold on the diversification, the tax deferral, the passive income, you know, being able to have access to this massive portfolio of, of properties that potentially are, are being pitched as a way to shield them from, from, you know, problems and upheaval. And of course the biggest thing, the liquidity, however, you know, the situation could change. And what looks really nice right now, those REITs that have really good numbers right now and look like they're positioned really nicely for the next few years, they might not look so good. And things can change on a personal level too. We have a lot of investors where they allocate money towards something like this, you know, at, you know, in year 2025.
(24:07): What is optionality and why is it so important for DST investors? (Back to Top)
And then, you know, you don't know what's gonna happen in year 2030. Maybe that money or maybe that allocation that seemed like a good idea then is not, it's such a great idea when you find out, you know, four or five years later that the distribution is lower, the debt ratio is higher, and that there's more problems that have been, that have been created by persistently high inflation numbers. So these are things to consider. And as a result, K properties has taken a look at this and taken a stance where we feel that optionality is something crucial and critical for our DST investors to consider. So not all DSTs are gonna obviously offer the choice on our website. You'll notice that we have this laid out for you, so you will see it, talk to your, if you have questions about that process, obviously talk to your, uh, your K properties advisor, uh, so they can walk you through the different, different formats there and like what sponsor companies are doing what.
(24:55):
But full 7 21 upgrade optionality. It's important to understand, it gives you the choice whether to up reach or whether you don't want tore versus DSTs that will have a forced situation, but you do not have a choice. So the 4 7 21 program, again, key things here, we kind of already covered a couple of it, but you're having, you know, it's gonna put you in a situation, it's gonna put the investment situation where there's a lack of flexibility. Investors are locked into the upbeat without the ability to then, you know, change their decision, okay? The financial instability, it can result, if the reit, let's say, takes on too much debt, it's then potentially putting the other properties and the overall health of the REIT at risk. And then the dividends, the dividends may be paid from borrowings or asset sales, but like we discussed before, they potentially can not be able to be sustained for the long term.
(25:43):
Again, if we end up start, if we get to a point where, you know, let's say a, a REIT is, you know, like we have, like we're seeing right now in the industry where redemptions are across the board on, on a lot, a lot of the, uh, the major REITs that we're seeing and paying attention to the, uh, redemption requests from the investors are far outpacing the income that's coming in. And so again, if you're in a 7 21 forced upbeat, that's slated to go into one of these, you know, great news for the reit. 'cause now they're getting your money that's getting put in bad news for you. If it's, if it's locking you out or putting you in a position where it's difficult to get that money out, that was the whole reason why you're going in there in the first place. So let's see here.
(26:23):
Okay, so again, just to kind of review and go through the things that we already, that we discussed, why the 7 21 due diligence matters and why it's so important. And again, we, we feel like it's essential. We feel like it's a necessary step and something that we want to help be a part of as you're looking at the different options, because there are a lot of options. If a reit the end result of allocating a certain amount of money towards a REIT is something that you're interested in, do it the right way. Ask the questions that we discussed. Talk about it with your advisor, okay? Remember that the 7 21 up upgrade DSTs are not a one size fits all investment. Each one is gonna have its own risk, okay? Many financial advisors and wealth managers are gonna recommend investing an entire exchange. And this is one of the things, you know, if you've talked with key properties before, you understand how risk adverse we approach putting together these portfolios, like our ideas on diversification are designed to make sure that, you know, our investors can weather economic storms and changes.
(27:23):
You know, and, and we feel that by diving into this and taking a look at the numbers and the metrics that we've discussed in this presentation, that we're gonna potentially be able to hedge against a lot of that. Unfortunately, many financial advisor wealth managers are, you know, they've got, they have to manage a lot of money that, you know, they have to know a lot about a lot of things. And sometimes diving and going deep underneath the hood is not always something that they're gonna be doing. So ask the right questions, and if you're not getting the answers you want, reach out to your K properties, invest investment advisors, this is what we do, and we are happy to, to be your orthopedic surgeon, right? So skipping due diligence on 7 21 investments could potentially lead to reduced dividends, leverage issues overpaying because of the markups and the unforeseen tax bills.
(28:07):
Investors have got to look beyond just the relationship that they have with a, with a financial advisor or wealth manager, and analyze the actual financials behind the REIT for where they're doing their exchange, where their money in this exchange could end up at. Okay? And again, as a specialist in the DST and 7 21 upbeats arenas, we've, we've got teams of analysts here at our headquarters building out here in Southern California that are dedicated to tracking these metrics. It's something that not only are we passionate about, but we're passionate about protecting our investors from, okay? And so that's, that's a big deal here and we definitely wanna talk with you more about it as questions come up. So, again, take a look at the, uh, KPI 10 30 one.com marketplace. This is, you know, you're gonna see some of the changes you haven't been on there recently.
(28:51):
You'll see some of the changes to our inventory page. We are updating the website and you're gonna see the, you know, the notes on there from the analysts about the different holdings, but also identifying, you know, key things that you should be aware of, like forced versus optional, you know, and any type of, uh, issues that, uh, are popping up on during our own internal due diligence that we're doing. Let's see here. Okay. And I think that basically wraps everything up here. So the other thing that you'll also notice that's important to take a note of on our education section, when you log in on the back end of our website, you're gonna see right alongside the current inventory list, you'll also see a ton of, uh, educational materials, videos, different articles that have been written, case studies on these 7 21 issues that we've talked about, and different ways for you to be able to handle them in your exchanges.
(29:39):
And then of course, reach out to your, your K properties representative with any additional questions that you might have about this process. We're happy to help. Here's our, our beautiful team here, standing by the ocean. Again, we're standing by to assist any way that we can. And, uh, even if it's just to bounce questions off of our team who does this on a daily basis, if you're actively involved in an exchange and just have questions that aren't being answered or you want details that are not being brought, brought to attention, that if adequately please reach out, we'd be, we'd be happy to help you. Thank you guys so much for your time for joining us this morning, and, uh, hope you all have a wonderful, wonderful rest of the week.