Deferred Sales Trust Story


Steve Sells His $1.9M Property And Uses A Deferred Sales Trust



I can tell you, it wasn’t easy. As I’ve told you, Brett, several times, I’ll always bet on myself, and I’m gonna bet on myself first, every time I know, I can take a building, and I can fix it, I can raise the rents, I can grind away and get it to work. Within reason, obviously, you have to buy it. There is a floor to what you can do, and in terms of that, I had to get comfortable with these individuals that would come in, the Campbell Law Group, Robert Binkele, and yourself to his to a degree. I mean, we had known each other 10, 12 years, something along those lines, but kind of in a different sense, from a realtor to now, being part of this trust. I had to really dig in, and say, “Okay, I’m gonna take, hundreds and hundreds of 1000s of dollars, and trust somebody else,” I have to somehow pivot and be able to say, “Okay, I’m going to trust somebody else instead of myself.”

I’m a very skeptical person, I’m going to dig and my wife’s even more skeptical than I am. If I say, “Hey, look at this” he’s gonna say, “find, poke holes in four or five different other things right about it.” But it took some time. We had to move relatively quickly, I think we started figuring out that this wasn’t going to work. Probably mid-November, end of November. The property was closing. Then on the seven units, that deal was going to close and I had to figure out where to put the money. In a matter of 20 days. A lot of time on the phone, a lot of digging, a lot of Googling, trying to see, what I could find out about Campbell Law and Robert Binkele and a lot of time on the phone with them, trying to find out what this was all about. So, it wasn’t an easy shift for me at all.


that’s common with all of our clients. It’s a sense taking, what you’ve always known, and the sense of, I’ve got control to releasing that and putting faith and trust in this group with this new concept that maybe your CPA hadn’t told you about. That perhaps, you’ve never heard another commercial real estate broker tell you about that. It’s shifting from everything, and it’s certainly a challenge. It was even a challenge for me to I remember sitting at Marcus & Millichap hearing about this for the first time, about 10 years ago about when I met you, Steve for the first time, and saying, this seems like it’s too good to be true this. We understand why you would be nervous, we understand why you’d be skeptical, and we understand why it is a challenge to make this shift. But now that we’ve made this shift, tell us what life looks like now and walk us through essentially the I guess, the wave of emotions. You sell at the peak. then you’re sitting in an investment portfolio. You can also maybe talk about a little bit your thoughts on stocks, bonds, mutual funds, and your shares with that, and then all of a sudden, everything crashes. Walk us through that whole, emotional roller coaster, that it’s been really the past, four weeks.


To go back, the initial was, I was really disappointed. My deal fell through even though I had the DST as a backstop. It felt like a backstop. It felt like, okay, it didn’t work. But here, here’s my second-best choice, it’s better than paying the tax. Or at least that was my initial feeling. Really disappointed I couldn’t get those 21 units, because I was just gonna keep, keep moving, keep moving up. As we continue to dig into it, and really kind of understand what the opportunity looked like, this light started kind of shining and kind of going. Maybe this is going to be okay, maybe there’s an opportunity here to potentially have these dollars on the sidelines. I can go and find more syndicated deals. As I said, I’m in four of them today. maybe there’s an opportunity to continue to do that, instead of getting the 3% return and spending, I’ve got a day job already. Where I’m a vice president in a small software firm. I already spend 40, 50 hours a week at that job, and then on top of it, trying to do this kind of nights and weekends and piecing that together. Maybe I don’t have to do that. Maybe I don’t have to grind as I would have with the 21 unit building.

I can take those dollars and maybe put them into syndication, make them 3% Like I said upfront. Make 6% 7% preferred return to start and, and having that work for me. as we started kind of, going through it, started looking at some of the opportunities. Robert Binkele put us in a couple of things. The majority of our money went into a mutual fund called Swan. I won’t get into a ton of detail, because I’m obviously not the expert. But what was really attractive to me was, as Robert explained it right swan is there and it hedges the market. If something happens, you’re, actually Swan starts to one, it’ll hedge, and you won’t fall too far. But when the market recovers, you kind of slingshot up and you actually find more returns. That was really interesting to me because I’ve got plenty of money in 401, k’s and stocks and things of that nature. This was my real estate money, and I didn’t want to take the real estate money and put it back into the stock market. I want to keep some sort of balance. That was good. I felt like that was something that was interesting. then we picked, I think one-two, I think three other stocks. One was like a bond fund, a 5G company, and then I think one other item, but I think maybe upwards of 60 to 70% of my money went into the swan investment. that was attractive to me. Because I have that backstop.

But I wasn’t really sure. They say, Well, this thing kind of, it’s here, and it’s gonna work. it’s fantastic. Trust me. Again, who do you trust? Do you have the trust? Do you trust yourself versus, other people and I kind of on and on? It wasn’t really until this, COVID-19 induced recession. That I could really see the value of the Swan, investment. Kind of fast forward here now, in the market starting to get back. It’s April 25. Today, as we talk about this. But in the last week, I think the markets went up just about every day. But I haven’t checked the swan and maybe a week or week and a half. At some point, though, it was only down about 5%. Where, some of my other investments, whether it’s my 401k, some of the other stocks we invested in are down substantially, 30 plus percent. It worked. that was really kind of an aha moment. I was like, I’m not sure if this thing’s actually gonna work until we actually see a downturn. I didn’t think we were going to see a downturn, as we were putting our money in, in January, things were looking great, all of them, I think the central bank came out and said, We don’t foresee a recession this year. We’re gonna, up to our opinion of what’s going to happen in the market and, blue sky birds were singing and then, here comes a pandemic. In hindsight, thank goodness, the 21 unit building, workout. Because, as I mentioned, the tenant mix, I think, would have been challenging to have people pay their rent, we would have been in a spot where we needed capital to, fix things, and I think it would have been a whole lot of stress. Like, as I said, You brought the other day. I do a lot of my own, kind of forecasting and numbers and underwriting on buildings. I didn’t underwrite for a pandemic. I don’t think anybody does. it just happened. I’m grateful that, it worked out that I ended up in the DST.




Closed Deal Story


Silicon Valley Technology Expert Finds A ‘Deferred Sales Trust’ To Break Open A Clear Path To Sell Cryptocurrency To Defer Capital Gains Tax


Can I save capital gains tax when selling cryptocurrency? The answer is, “yes.” About 7 years ago, Peter and his wife purchased their first Ethereum. Who would have anticipated that the value would have increased by thousands of percent in just a few years? Peter, who has worked in the technology field for more than 20 years, saw a great opportunity to sell in late 2017, however, without a clear legal plan to defer the large capital gains tax, found himself feeling trapped by the consequences of selling.

Peter held on to his belief in the fundamental value of ethereum and the potential business opportunities it brought to end-users during the 2018 crash when the value of ETH fell from $1,432 to below $90. “That was a tough pill to swallow,” Peter continued. Fortunately, everything returned in 2021, and much more. In early 2021, Peter met Jessica Lanning of Lanning Financial who told him about the Deferred Sales Trust and introduced him to Brett Swarts of Capital Gains Tax Solutions. Then in May of 2021, ETH reached an all-time high of $4362. “I knew it was time to sell at least a big portion of my stock since I didn’t want to miss this opportunity again. Let’s just say it’s been a long three years since the high in 2018.”

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