Frequently asked questions.
Investor Transition & Continuity
How do my investors move into the REIT?
Through a 721 UPREIT exchange, investors contribute properties into the REIT in exchange for Operating Partnership (OP) units. This is a tax-deferred rollover that offers steady income, estate planning simplicity, and access to liquidity.
Will my investors actually do this?
Yes. Once they understand the benefits—tax-free rollover via 721 UPREIT, consistent dividends, diversification, and multiple cash-out options—most investors see it as a superior path to direct ownership.
What if some investors don’t want in?
They can be cashed out cleanly. The platform allows flexibility for investors who prefer liquidity over rollover.
How do new investors get in?
Two main ways:
Direct REIT investments for accredited investors.
Delaware Statutory Trust (DST) offerings, which capture 1031 exchange capital and later roll into the REIT through a 721 UPREIT.
Do my investors stay with me as their sponsor?
Yes. You remain the same manager they know and trust. This structure ensures continuity while adding institutional infrastructure.
Structure & Control
Do I lose control of my business?
No. You continue to own 100% of your operating company (op-co). We only co-own the REIT platform with you, never your op-co.
Who decides what the REIT buys?
A board comprised of both sides. Institutional governance is applied, but your expertise drives sourcing, repositioning, and value creation.
Do I keep property management and fees?
Yes. You retain your property management contracts, leasing fees, and tenant relationships.
How much equity do you take?
Only enough to align our long-term interests. The upside and growth of your value-add business remain yours.
Does this lower my cost of capital?
Yes. Permanent REIT capital and DST equity are far cheaper and more reliable than chasing fragmented, one-off equity raises.
Capital & Economics
Where does the initial capital come from?
We provide secured bridge capital to stabilize assets immediately. From there, we raise equity together through DSTs tapping 1031 exchange flows and direct REIT investment.
Do you replace my current investors?
No. We help you retain your existing investors, while adding new ones via DST structures and long-term REIT capital.
How do you make money?
Our economics are designed to keep us aligned:
Interest on bridge debt
A small REIT equity stake
Shared fees across acquisitions and operations
How is the REIT valued?
By institutional standards—NAV, income, and growth potential—which is often significantly higher than piecemeal property sales.
How large can this platform grow?
Many sponsors can build $50M+ portfolios within 24 months by consolidating, recycling stabilized assets via DSTs, and compounding growth through 721 UPREITs.
Liquidity & Exit
What liquidity do my investors get with a REIT or DST?
Borrowing against OP units (fast access)
Selling on a secondary market
Cash-out through a major liquidity event (sale, merger, IPO)
Can I sell the REIT platform?
Yes. It can be sold to a larger REIT, an institutional investor, or eventually listed in the public markets.
Do I get sponsor liquidity?
Yes. You can unlock liquidity without giving up operating company ownership.
How fast can investors access cash compared to real estate?
Much faster. Borrowing against OP units is immediate, and selling units is quicker than liquidating physical property.
What if I want a complete exit?
You can exit via a REIT sale, merger, or IPO, often achieving a valuation multiple far higher than selling assets individually.
Tax & Technical
What’s a 721 UPREIT exchange?
A 721 UPREIT allows property owners to exchange real estate for REIT OP units. It’s a tax-deferred strategy, with taxes only due when units are sold.
How is that different from a 1031 exchange?
A 1031 exchange swaps property for property. A 721 UPREIT swaps property for REIT units—unlocking diversification, liquidity, and estate planning benefits.
Can DST investors join later?
Yes. DSTs are designed to roll into the REIT via 721 UPREITs after a hold period, unifying the platform.
Will this trigger a tax reassessment?
Usually not. Transactions are structured to avoid reassessment issues and maintain tax efficiency.
Can this strategy work with debt-heavy properties?
Yes. We structure around existing loans to ensure compliance and tax deferral.
Risks & Objections
What if institutional equity doesn’t show up?
Your existing investors plus our bridge capital are enough to start. Institutional equity accelerates scale but isn’t required at launch.
Why hasn’t the DST-to-REIT model been common?
It requires rare expertise: 721 structuring, 1031 exchange DST capabilities, patient capital, and institutional-grade infrastructure. We provide all four.
What’s the catch?
Sponsors must commit and execute. The Triple Play works when deals keep flowing.
What if investors resist change?
We educate them on DSTs, 721 UPREITs, and tax deferral. Once they see the benefits—steady income, simplicity, and liquidity—most embrace the model.
Can this fail?
Only if you stop sourcing and operating deals. Permanent capital eliminates the #1 risk for sponsors: running out of money.
Competitive Advantage
How does this make me stronger than competitors?
Faster execution with bridge capital
Lower cost of capital via DSTs and REIT equity
Permanent buyer (your REIT) for stabilized assets
Loyalty from investors who get tax-deferral, income, and simplicity
Why act now?
Because three forces are colliding:
A $35 trillion wealth transfer is driving demand for DSTs and UPREIT solutions.
Mid-market sponsors are fatigued by deal-by-deal fundraising.
Today’s capital markets reward scalable, institutional structures.
How does this help my family and heirs?
Your REIT continues beyond you—producing income, providing estate simplicity, and creating assets your heirs can keep or sell without complexity.
What’s the ultimate endgame?
Build an enterprise worth 5–10x your current deal value. Scale it, sell it, or pass it down.
What’s my first step?
Book a 30-minute call. We’ll map your assets, show how DSTs and 721 UPREITs apply, and calculate how much permanent capital is on the table.
Bottom line: The MDRR Triple Play uses DSTs, 1031 exchanges, bridge capital, and 721 UPREITs to give sponsors permanent capital, investor continuity, and a scalable platform that builds real wealth.