DST Minimum Investment Requirements: What You Need to Know

One of the first questions investors ask when evaluating Delaware Statutory Trusts is a practical one: how much capital do I need to participate?

Most DSTs require a minimum investment of $100,000 for 1031 exchange investors. Some offerings accept as little as $25,000 for cash investors who are not completing a tax-deferred exchange. These thresholds are not fixed across the industry. They vary based on property value, sponsor structure, offering size, and regulatory requirements.

This guide covers the typical minimum investment ranges, the factors that determine those thresholds, how minimums interact with 1031 exchange planning, and what additional costs investors should expect beyond the capital contribution. It is written for 1031 exchange investors evaluating DSTs as replacement property, accredited investors comparing entry points, and property sellers planning their reinvestment strategy. DST minimum investment requirements are one of several factors to consider when evaluating Delaware Statutory Trust investments.

This content is for educational purposes only and does not constitute investment advice, tax advice, or a solicitation to buy securities.

What Is the Typical Minimum Investment for a DST?

DST minimum investment amounts depend primarily on how the capital enters the offering. The most common breakdown falls along two lines: 1031 exchange investors and cash investors.

The difference between these tiers reflects the economics of each investor type. Exchange investors typically bring larger sums from a property sale and need to deploy capital within strict IRS timelines. Sponsors structure higher entry points to align with typical exchange proceeds. Cash investors have more flexibility, so sponsors may lower the threshold to broaden the investor pool.

Each minimum applies per DST offering. An investor with $400,000 in exchange proceeds can split that capital across multiple offerings, each with its own minimum.

The minimum investment amount is set by the DST sponsor, not by the IRS or SEC. Securities regulations influence investor qualifications and offering structure, but the dollar amount required to participate is a business decision based on the offering's capital needs.

What Factors Affect DST Minimum Investment Requirements?

Several factors determine where a sponsor sets the minimum threshold.

Property Size and Total Offering Value

DST properties typically range from $30 million to over $100 million in total value. The equity portion, after debt financing, must be raised from investors. Larger properties may push individual minimums higher. Smaller multifamily DSTs often carry lower entry points than large industrial or net-lease portfolios.

Number of Investors

Federal securities regulations create practical limits on investor count. Under SEC Regulation D, most DST offerings are structured to stay below thresholds that would trigger public reporting requirements. Sponsors divide the total equity requirement among planned investors. Fewer investors means higher individual minimums. Broader participation allows lower minimums.

Sponsor Preferences and Capital-Raising Strategy

Some sponsors prefer fewer, higher-net-worth investors and set minimums at $250,000 or above. Others prioritize accessibility at $25,000 to $100,000. The sponsor's track record, property quality, and distribution channel all factor into this decision.

Property Type and Income Profile

Triple-net lease DSTs with long-term, investment-grade tenants tend to command higher minimums because demand is strong. Multifamily and industrial DSTs may offer lower entry points. Specialty property types, including medical office, senior housing, and self-storage, vary widely.

Accredited Investor Requirements

DSTs are private placement securities offered under SEC Regulation D, typically under Rule 506(b) or 506(c). Only accredited investors may participate. The SEC defines an accredited investor as an individual with annual income exceeding $200,000 ($300,000 jointly with a spouse) in each of the prior two years with a reasonable expectation of the same in the current year, or a net worth exceeding $1 million excluding the primary residence. The minimum investment is separate from accreditation. An investor must qualify as accredited and meet the offering's capital minimum. Learn more about accredited investor qualifications and how they apply to DST investments in our accredited investor guide.

How DST Minimum Investments Affect 1031 Exchange Planning

For investors completing a 1031 exchange, DST minimums are a planning constraint that directly affects tax deferral.

IRC Section 1031 requires exchange investors to reinvest all net proceeds into like-kind replacement property of equal or greater value for full tax deferral. DSTs qualify as replacement property under IRS Revenue Ruling 2004-86. For a complete walkthrough of the 1031 exchange into DST process, including timelines and rules, see our DST Exchange Guide.

The practical challenge is matching exchange proceeds to DST minimums. When proceeds exceed a single minimum, the investor can direct remaining capital into additional offerings. When proceeds fall short, options include finding a lower-minimum offering or supplementing with cash (the cash portion does not receive tax-deferred treatment). When proceeds far exceed a single minimum, the investor can distribute capital across multiple DSTs for diversification.

The risk in all scenarios is boot. Any uninvested proceeds become taxable. This makes precise matching of exchange proceeds to DST minimums critical.

Two IRS deadlines frame the exchange: a 45-day identification period for naming replacement properties and a 180-day closing deadline. There are no extensions outside of rare IRS disaster relief declarations.

The IRS also limits identification. Under the three-property rule, an investor may identify up to three properties of any value. Under the 200% rule, an investor may identify more properties as long as their combined fair market value does not exceed 200% of the relinquished property's sale price.

Can You Invest in Multiple DSTs? Diversification Strategies

Investors are not limited to a single DST. Allocating 1031 exchange proceeds or cash capital across multiple offerings is a common strategy and one of the structural features DSTs offer compared to direct property ownership.

Investing in multiple DSTs allows an investor to spread risk across property types (multifamily, industrial, net-lease retail), geographic markets, and sponsors. Staggering hold periods across several DSTs can also create more predictable timing for future capital events.

As an example, an investor with $500,000 in exchange proceeds could invest $100,000 each in five different DSTs across different property types and regions, meeting the $100,000 minimum on each while building meaningful diversification.

The IRS identification rules still apply. Under the three-property rule, an investor can identify up to three replacement properties. Under the 200% rule, an investor can identify more if their combined value stays within the limit. Lower minimums enable greater diversification. Higher minimums may constrain the number of accessible offerings.

DST Minimums vs. Other Real Estate Investment Options

DST minimums sit in a specific range within the broader landscape of real estate investment structures.

For investors who require both passive ownership and 1031 exchange eligibility, DSTs typically require less capital than direct property purchases or TIC arrangements, though their upfront fee structures (typically 10–18% of equity) should be factored into the total cost evaluation. Direct property purchases require significantly more capital and involve active management. TIC structures offer 1031 eligibility but carry higher minimums and more investor involvement. Public REITs provide liquidity and low minimums but do not qualify for 1031 exchanges.

The trade-offs are clear: DSTs provide passive, fractional ownership of institutional-quality real estate with 1031 eligibility, in exchange for illiquidity (typical hold periods of three to ten years) and limited control over property decisions. Each structure carries distinct risks and benefits. Consult a qualified financial advisor to determine which aligns with your investment objectives.

Can You Negotiate the Minimum Investment in a DST?

DST offerings are pre-structured securities with terms established before the offering opens and documented in the Private Placement Memorandum.

Limited flexibility exists in certain circumstances. Some sponsors may accept a slightly lower investment from a 1031 exchange investor who falls just short of the stated minimum, particularly when the remaining capital would otherwise become taxable boot. A sponsor nearing the close of an offering with unfilled equity may also be more willing to accommodate a lower entry point.

Any modification must comply with securities regulations. The more practical approach is to identify a DST offering whose minimum aligns with available capital. A qualified 1031 exchange advisor can help match investors with appropriate offerings.

Costs Beyond the DST Minimum: Fees and Expenses to Consider

The minimum investment is the capital contribution, not the total cost of participating. DST sponsors build several layers of fees into the offering structure. For a detailed breakdown of all DST fees and how they affect returns, see our DST Fees and Costs Guide.

DST sponsors are prohibited from taking a “promote” or “waterfall” fee, meaning they cannot receive a percentage of the profits. Instead, their primary revenue comes from acquisition fees (typically around 2% of the equity invested) and disposition fees charged when the property is sold. Sales commissions, paid to the selling group, usually amount to 5% to 6% of the equity raised. For properties with debt, the commission might be 2.5% to 3% of the total property value. Additional upfront costs include financing fees (0.5% to 2% of the loan amount), organizational and offering fees (2% to 3% of equity raised), and a marketing and due diligence fee of approximately 1% paid to the broker-dealer.

Ongoing fees are paid annually from net operating income and cover asset management and property management. Upon the property sale, sponsors charge a disposition fee.

All fees are disclosed in the Private Placement Memorandum. Investors should evaluate the total cost structure, not just the minimum capital requirement.

This content is for educational purposes only and does not constitute investment advice, tax advice, or a solicitation to buy securities.

About the Author

Thomas Wall, Partner

Thomas Wall is a Partner at Anchor1031, where he specializes in educating clients about 1031 exchanges, private real estate offerings, and REITs. With nearly a decade of experience in alternative investments and real estate, Mr. Wall has helped investors through hundreds of 1031 exchanges, placing over $230M of equity into real estate.

Disclosure

Tax Complexity and Investment Risk

Tax laws and regulations, including but not limited to Internal Revenue Code Section 1031, bonus depreciation rules, cost segregation studies, and other tax strategies, contain complex concepts that may vary depending on individual circumstances. Tax consequences related to real estate investments, depreciation benefits, and other tax strategies discussed herein may vary significantly based on each investor's specific situation and current tax legislation. Anchor1031, LLC and Great Point Capital, LLC make no representation or warranty of any kind with respect to the tax consequences of your investment or that the IRS will not challenge any such treatment. You should consult with and rely on your own tax advisor about all tax aspects with respect to your particular circumstances. Please note that Anchor1031 and Great Point Capital, LLC do not provide tax advice.

The information contained in this article is for general educational purposes only and does not constitute legal, tax, investment, or financial advice. This content is not a recommendation or offer to buy or sell securities. The content is provided as general information and should not be relied upon as a substitute for professional consultation with qualified legal, tax, or financial advisors.

Tax laws, regulations, and IRS guidance regarding 1031 exchanges, opportunity zone investments, and related real estate strategies are complex and subject to change. Information herein may include forward-looking statements, hypothetical information, calculations, or financial estimates that are inherently uncertain. Past performance is never indicative of future performance. The information presented may not reflect the most current legal developments, regulatory changes, or interpretations. Individual circumstances vary significantly, and strategies that may be appropriate for one investor may not be suitable for another.

All real estate investments, including 1031 exchanges and opportunity zone investments, are speculative and involve substantial risk. There can be no assurance that any investor will not suffer significant losses, and a loss of part or all of the principal value may occur. Before making any investment decisions or implementing any 1031 exchange strategies, readers should consult with their own qualified legal, tax, and financial professionals who can provide advice tailored to their specific circumstances. Prospective investors should not proceed unless they can readily bear the consequences of potential losses.

While the author is a partner at Anchor1031, the views expressed are educational in nature and do not guarantee any particular outcome or create any obligations on behalf of the firm or author. Neither Anchor1031 nor the author assumes any liability for actions taken based on the information provided herein.