Who handles property management in a direct title security?

Three parties share the work: the tenant, the property manager and you

The client's offering pages describe the split plainly. A professional property manager is paired with each investment and "oversees leasing, maintenance, and tenant service", and the owner enjoys "hands-off ownership while retaining full decision-making authority." The properties are single-family rentals the client sources between $250,000 and $500,000, each tied to a physical address, a recorded title and a registered CUSIP number.

The tenant is the second party. Every offering is triple-net leased, so the occupant pays rent and the property's running costs, and the rent arrives monthly for the duration of the lease term.

You are the third. You own the property through a single-member LLC with no co-owners, and the client's pages list the decisions that stay with you: when to sell, when to refinance for liquidity, and whether to transition into a 721 exchange.

The triple-net lease moves the running costs to the tenant, which is what makes the ownership hands-off

The IRS uses a working definition in Rev. Proc. 2019-38: a triple net lease "includes a lease agreement that requires the tenant or lessee to pay taxes, fees, and insurance, and to pay for maintenance activities for a property in addition to rent and utilities." With those costs on the tenant, the manager's job is coordination and collection rather than paying vendors out of your rent.

What the lease leaves with the owner is a matter of its own text. Roof and structural items, the end of the lease term and re-leasing are the usual places where a lease draws the line, so read the lease in the offering package before you assume a cost is the tenant's.

The offering package itself is the place to find these terms: the client delivers a private placement memorandum, a customized supplement and a subscription agreement for each property.

Your LLC is disregarded, so every management decision is legally yours and so is every tax line

Under Reg. section 301.7701-3(b)(1)(ii), a domestic eligible entity with a single owner is "disregarded as an entity separate from its owner" unless it elects otherwise. For federal tax you own the house, which is why the structure works as replacement property; that analysis is set out in whether a direct title security is like-kind.

It also means the manager works for you, not for a trust or a sponsor entity standing between you and the property. Rent, deductions and depreciation land on your own return, and hiring a manager does not change that.

Delegating the work does not delegate the decisions. A manager can run leasing and repairs, but a sale, a refinance or a new loan needs your signature as the LLC's sole member.

A DST trustee is barred from the decisions a direct title owner makes freely

In Rev. Rul. 2004-86, the IRS treated a Delaware Statutory Trust as a grantor trust only because its trustee could not, among other things, "renegotiate the terms of the debt" or "renegotiate the lease" or enter into leases with other tenants except on the tenant's bankruptcy or insolvency, and could make only minor non-structural modifications. Investors in a DST therefore delegate everything to a stack of sponsor affiliates, described in the layers that run a DST.

A direct title owner faces none of those limits, because there is no trust. The client's pages contrast the two directly: no co-owners and no sponsor-led exit strategy. If you want a broader comparison of control, who controls a DST and whether investors vote covers the trust side.

Worked example: a repair call and a refinance decision on a hypothetical $400,000 house

Hypothetical, round figures. You exchange into a $400,000 single-family rental held in your LLC and triple-net leased. In year two the water heater fails. Under a lease that puts maintenance on the tenant, the tenant pays and the manager handles the call; you see it in the manager's report rather than on your phone.

In year four rates fall and you want cash out. The manager has no role in that decision: you choose whether to refinance and on what terms, the client's pages say it will guide financing without traditional lenders, and the house stays yours. Run your own numbers, including the tax effect of any later sale, with your CPA.

Questions to settle before you sign the subscription agreement

The client's pages state who manages and what you control, but not the commercial terms, so get them in writing from the offering package.

• Who the property manager is, what it charges and how either side can end the arrangement.
• Which costs the lease puts on the tenant, and which (roof, structure, re-leasing) stay with you.
• What the manager reports to you, how often, and in what form for your tax return.
• What happens at the end of the lease term if the tenant leaves.
• How the financing is structured if you need to replace debt, and who is liable on it.