"How much do I need to invest in a DST?" is one of the most common questions from landlords considering 1031 exchanges. The short answer: typically $100,000 minimum, plus you must be an accredited investor. This guide explains the requirements, costs, and how different exchange sizes can be deployed.
Two Requirements to Invest in DSTs
1. Minimum Investment
Most DSTs require $100,000 minimum. Some accept $50,000 or less. Larger exchanges can be split across multiple DSTs.
This is about the DST's operational needs—too many small investors makes administration inefficient.
2. Accredited Investor Status
SEC requirement for most private securities offerings. You must meet specific net worth or income thresholds.
This is a legal requirement—DSTs cannot accept non-accredited investors.
Accredited Investor: Do You Qualify?
Under SEC Rule 501 of Regulation D, you qualify as an accredited investor if you meet any one of these criteria:
Net Worth Test: $1 Million+
Your net worth (or combined with spouse/partner) exceeds $1 million, excluding your primary residence.
What counts: Real estate equity, retirement accounts, brokerage accounts, business equity, cash savings.
What doesn't count: Your primary home equity, vehicle values (typically), personal property.
Income Test: $200k Individual / $300k Joint
Individual income over $200,000 (or $300,000 jointly with spouse) in each of the past two years, with reasonable expectation of the same this year.
Professional Credentials
Holders of Series 7, Series 65, or Series 82 licenses qualify regardless of income or net worth.
Good news for landlords:
If you own a rental property with significant equity, you likely qualify. The equity in your rental property (not your primary home) counts toward the $1M net worth threshold. A $500,000 rental with $300,000 equity + $400,000 in retirement accounts + $100,000 in savings = $800,000 toward qualifying—and you may have other assets too.
DST Minimum Investments by Type
Minimums vary by DST sponsor and offering type. Here's a typical range:
| DST Type | Typical Minimum | Notes |
|---|---|---|
| Standard DST | $100,000 | Most common requirement |
| Lower-minimum offerings | $50,000-$75,000 | Some sponsors offer these |
| "Fractional" DSTs | $25,000-$50,000 | Fewer options, smaller properties |
| Premium/Institutional | $200,000+ | Higher-quality properties, established sponsors |
Why minimums exist: DSTs have fixed administrative costs (legal, accounting, investor relations, K-1 preparation). Too many small investors makes the structure inefficient and increases per-investor costs.
How Much Will You Actually Have to Invest?
Your "exchange amount" isn't the property's sale price—it's what's left after paying off debt and transaction costs.
Example Calculation
In this example, you'd have $380,000 to invest in DSTs. With a $100,000 minimum per DST, you could diversify across 3-4 different offerings.
Allocation Strategies by Exchange Size
How you deploy your exchange depends on how much you have. Here's guidance for different scenarios:
$50,000 - $100,000
Limited OptionsAt this level, your options are limited. Many standard DSTs require $100k minimum, leaving you with fewer choices.
Option 1: Find DSTs with $50k minimums (fewer choices, possibly smaller properties)
Option 2: Buy a small rental property directly (retain active management)
Option 3: Add cash to reach $100k (only exchanged portion defers taxes)
$100,000 - $300,000
Standard RangeMost individual 1031 exchanges fall here. You have access to standard DST offerings with some ability to diversify.
$100k: One DST (no diversification, but workable)
$200k: Two DSTs (e.g., multifamily + industrial)
$300k: Three DSTs (good diversification across property types)
$300,000 - $750,000
Strong DiversificationExcellent position for DST investing. You can build a diversified portfolio across sponsors, property types, and geographies.
Split across 3-5 DSTs with different sponsors
Diversify property types: multifamily, industrial, medical, NNN retail
Consider both leveraged and all-cash DSTs
$750,000+
Maximum FlexibilityFull access to the DST market, including premium offerings and hybrid strategies.
Access premium DSTs with $200k+ minimums
Consider hybrid: DSTs for passive income + direct property for appreciation
Work with advisors who have access to off-market offerings
All-In Costs Beyond the Investment
Your investment minimum is just part of the picture. Here are all the costs involved in a DST exchange:
| Cost Category | Typical Range | Paid By |
|---|---|---|
| Qualified Intermediary | $750 - $1,500 | You (upfront) |
| Real estate attorney (optional) | $500 - $2,000 | You (upfront) |
| DST sales load/commission | 5% - 7% | Built into DST offering |
| DST acquisition/offering costs | 2% - 4% | Built into DST offering |
| Annual asset management | 0.5% - 1%/year | Deducted from distributions |
| Disposition fee (at sale) | 1% - 3% | Deducted from sale proceeds |
Total DST fees typically run 10-15% of your investment over the life of the holding. This is higher than buying an index fund—but you're paying for tax deferral, passive management, and access to institutional-quality properties.
What If You're Just Under the Minimum?
If your exchange proceeds are close to (but under) a DST minimum, you have options:
Add cash to reach the minimum
You can invest additional non-1031 funds alongside exchange proceeds. Only the exchange portion gets tax deferral—the cash portion is a regular investment.
Find a lower-minimum DST
Some sponsors offer DSTs with $50k or $75k minimums. Fewer options, but they exist.
Ask about partial fills
When a DST is close to fully subscribed, sponsors may accept investments below the stated minimum to fill remaining capacity. Worth asking your advisor.
Key Takeaways
- 1.Most DSTs require $100,000 minimum—some accept less ($50k-$75k), premium offerings may require more ($200k+).
- 2.You must be an accredited investor—$1M+ net worth (excluding primary home) OR $200k+ income ($300k joint).
- 3.Your rental equity likely helps you qualify—rental property equity counts toward the $1M threshold.
- 4.Larger exchanges enable diversification—$300k+ lets you spread across 3+ DSTs with different risk profiles.
- 5.Plan for total costs of 10-15% over the life of the investment (fees built into DST structure).
This content is for educational purposes only and does not constitute investment, tax, or legal advice. DSTs are securities that require accredited investor status. Investment minimums and requirements vary by offering. Consult qualified professionals before making investment decisions.