What is the minimum investment for a direct title security?

There is no fraction to buy, so the minimum is the price of one house

A DST sells beneficial interests in a large property, so its minimum is a dollar figure set by the sponsor. A direct title security works the other way round. You own the property outright through a single-member LLC, with no co-owners, and the offering is tied to one specific property with a physical address, title ownership and a registered CUSIP number.

That makes the price of the property the starting point. The single-family rentals we source sit between $250,000 and $500,000, in metro areas we select for job growth, school systems and rental demand, and each is triple-net leased with monthly payments for the lease term.

Our page on what you own with each structure compares this whole-deed model with fractional trust ownership.

Financing lowers the cash needed, and may be required anyway

If the property you sold carried a mortgage, Reg. section 1.1031(d)-2 treats the payoff as money received. You offset it by taking on debt with the replacement or adding cash, under the netting rule in Reg. section 1.1031(b)-1(c).

We offer custom financing for direct title purchases designed to meet exchange requirements, without traditional bank involvement or personal liability. Loan-to-value, rate and term are set per offering and are not published on our pages, so the equity minimum on a financed purchase is whatever the specific offering's financing leaves after the loan.

Financing is a choice when you have no debt to replace and a requirement when you do. Our answer on how a direct title security is financed covers the debt-replacement role in detail. Ask for the financing terms with the property details, because they decide how many properties your proceeds can buy.

Hypothetical: three exchange sizes and what they buy

Round numbers, hypothetical, debt-free sales unless stated. A $300,000 sale buys one $300,000 property all-cash. A $700,000 sale could buy two properties at $350,000 each, or one $450,000 property plus $250,000 in a traditional DST.

A $1,000,000 sale with a $400,000 mortgage paid off needs $1,000,000 of purchases and $400,000 of new debt or added cash. Two $500,000 properties each financed with a $200,000 loan would use $600,000 of exchange cash and replace the $400,000 of debt, if the offerings' financing allows it.

Any exchange money left over is boot, taxable up to your gain. Run your own numbers with your CPA before you identify.

Several properties are possible, within the identification rules

Under Reg. section 1.1031(k)-1(c)(4), you may identify three properties of any value, or any number whose combined value at the end of the identification period does not exceed 200% of what you sold. A large exchange into many houses usually relies on the 200% rule, so the total of every identified property, not just the ones you expect to close, has to fit.

Each property is a separate deed and a separate LLC position, with its own lease and tenant. That spreads risk across markets and tenants but multiplies the decisions you control, from lease renewals to the timing of each eventual sale. Our page on splitting an exchange between DSTs and direct property shows how others combine the two.

If the remainder after the last whole house is small, a traditional DST, typically with a minimum of $100,000 to $250,000 per trust, can absorb it; see DST minimums and sizing.

Size the purchase in this order

Start from your closing statement, not from the property list.

• Note the net proceeds at the intermediary and any mortgage paid off at closing.
• Decide whether you want financing, or need it to replace debt.
• Ask for the price, lease terms and financing terms of each available property.
• Fit whole properties to the proceeds, then place any remainder in a DST or plan to add cash.
• Check the identification list against the 3-property or 200% rule before day 45.