Mortgage Do's And Don'ts
Mortgages can be tricky, and it's easy to make mistakes that can end up costing you dearly. That's why we've put together this list of Mortgage Do's and Do not's to help you navigate the process with ease - and a little bit of humor.
DO: Shop around for the best mortgage rates
DON'T: Assume your bank will give you the best rate just because you have a checking account there. Remember, loyalty is a two-way street.
DO: Have a budget in mind
DON'T: Get in over your head. Just because you can technically afford a million-dollar mansion doesn't mean you should buy one. You don't want to be house-poor and unable to afford groceries.
DO: Get pre-approved before house-hunting
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DON'T: Assume you'll be approved for a mortgage just because you have good credit. Pre-approval is important because it gives you a better idea of how much house you can afford and shows sellers that you're serious.
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DO: Consider your future plans
.
DON'T: Assume you'll live in your new house forever. Life happens, and you may need to sell sooner than you think. Make sure you're not getting into a mortgage that you can't realistically afford if you need to move in a few years.
DO: Get pre-approved before house-hunting
.
DON'T: Assume you'll be approved for a mortgage just because you have good credit. Pre-approval is important because it gives you a better idea of how much house you can afford and shows sellers that you're serious.
.
DO: Consider your future plans
.
DON'T: Assume you'll live in your new house forever. Life happens, and you may need to sell sooner than you think. Make sure you're not getting into a mortgage that you can't realistically afford if you need to move in a few years.
DO: Read the fine print
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DON'T: Sign on the dotted line without reading the terms and conditions. There may be hidden fees or clauses that could come back to haunt you later.
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DO: Be prepared for unexpected expenses
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DON'T: Assume everything will go smoothly. There may be unforeseen expenses, like a leaky roof or a broken furnace, that can quickly drain your savings. Be sure to budget for these types of surprises.
DO: Read the fine print
.
DON'T: Sign on the dotted line without reading the terms and conditions. There may be hidden fees or clauses that could come back to haunt you later.
.
DO: Be prepared for unexpected expenses
.
DON'T: Assume everything will go smoothly. There may be unforeseen expenses, like a leaky roof or a broken furnace, that can quickly drain your savings. Be sure to budget for these types of surprises.
DO: Have a good sense of humor
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DON'T: Take everything too seriously. Yes, buying a house and getting a mortgage can be stressful, but try to find the humor in the situation. After all, laughter is the best medicine for a stressful day.
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By following these Mortgage Do's and Do not's, you'll be well on your way to successfully navigating the mortgage process - with a smile on your face. Good luck, and happy house hunting!
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š¢ What Is a Delaware Statutory Trust (DST) ā and Why 1031 Investors Use It to Defer Taxes & Scale Wealth š¼
š¢ What Is a Delaware Statutory Trust (DST) ā and Why 1031 Investors Use It to Defer Taxes & Scale Wealth š¼
š° Delaware Statutory Trust Explained: The Passive 1031 Strategy Smart Real Estate Investors Use š
What Is a Delaware Statutory Trust (DST) ā and How Is It Used by Real Estate Investors?
A Delaware Statutory Trust (DST) is a legal ownership structure that allows multiple investors to hold beneficial interests in institutional-grade real estateāwhile still qualifying as like-kind property under Section 1031 of the IRS tax code.
For real estate investors who want to defer capital gains taxes, reduce active management responsibilities, and maintain exposure to stabilized assets, DSTs have become one of the most powerfulāand misunderstoodātools in the 1031 exchange landscape.
As mortgage brokers and capital advisors, we frequently help investors evaluate when a DST makes sense versus traditional direct ownership, especially during tight timelines or market transitions.
How a DST Works
A DST owns one or more income-producing propertiesāsuch as:
Multifamily communities
Industrial and logistics facilities
Medical office buildings
Net-leased retail
Institutional mixed-use assets
Instead of owning the real estate directly, investors purchase beneficial interests in the trust. These interests are treated as real property for 1031 purposes, allowing investors to:
Sell a relinquished property
Defer capital gains and depreciation recapture
Reinvest proceeds into a DST within IRS timelines
Each DST is professionally managed and structured with non-recourse financing already in place.
Why Real Estate Investors Use DSTs
DSTs are commonly used by investors who want:
ā 1031 Exchange Compliance
DST interests qualify as like-kind replacement property under IRS guidance.
ā Passive Ownership
No tenants, toilets, or midnight calls. Asset management is handled by institutional sponsors.
ā Fractional Ownership
Invest in large properties with smaller allocationsāoften starting around $100,000.
ā Portfolio Diversification
Spread exchange proceeds across multiple asset types, markets, or sponsors.
ā Predictable Cash Flow
Many DSTs offer stable, monthly or quarterly income distributions.
DSTs and Financing: What Investors Need to Know
One of the most important advantages of DSTs is pre-structured financing.
Loans are non-recourse
Interest rates and terms are locked in
Investors are not personally liable
No underwriting of individual investors is required
From a mortgage advisory standpoint, this is critical for investors who:
Want to avoid new loan qualification
Are retiring or reducing active involvement
Are exiting highly leveraged properties
Need certainty during a 1031 timeline
DSTs remove financing risk from the exchange process.
When a DST Makes Sense
DSTs are particularly effective when:
A 1031 exchange deadline is approaching
The investor wants passive income
Replacement properties are overpriced or scarce
The investor is downsizing management responsibilities
Estate planning and succession are priorities
They are also commonly used as a temporary or permanent solutionāsome investors later exchange out of DSTs into direct ownership when markets shift.
Potential Trade-Offs to Understand
DSTs are not for everyone. Key considerations include:
Limited control over operations
Illiquidity during the holding period
Fixed business plans set by the sponsor
Suitability requirements for investors
This is why DSTs should be evaluated as part of a broader capital strategy, not as a standalone product.
How Medallion Funds Helps Investors Use DSTs Strategically
At Medallion Funds, we donāt sell productsāwe structure outcomes.
We help investors:
Coordinate DSTs within 1031 exchanges
Compare DSTs vs. direct acquisitions
Evaluate sponsor quality and debt terms
Align passive strategies with long-term goals
Integrate DSTs into broader real estate and lending plans
The right DST can protect equity, preserve income, and buy timeāwhen used intentionally.
Final Thought
A Delaware Statutory Trust is not about giving up controlāitās about strategic flexibility.
For investors navigating tax exposure, market volatility, or life transitions, DSTs remain one of the most effective tools available when paired with the right capital advisor.
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Ā© 2023-2024 Bill Rapp, Medallion Funds LLC, Director of Capital Advisory
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