How Realtors Can Boost Commissions with 1031 DST Exchanges

As a real estate agent, staying ahead of the curve means knowing the tools and strategies that can set you apart. In our recent webinar, hosted by myself, Ryan Poole, founder of RealTrade and Attorney James Brown, founder of New Path Title, we dove into a game-changing opportunity for realtors: leveraging Delaware Statutory Trusts (DSTs) in 1031 exchanges to unlock commissions and deliver unparalleled value to clients. With insights from 1031 Financial’s Larry Karp, here’s how you can use this strategy to grow your business, plus two critical “tales from the street” every agent needs to know.

Why DSTs Are a Game-Changer for Realtors

For real estate investors, particularly older clients tired of managing rentals (the infamous “tenants, toilets, and trash”), a 1031 exchange into a DST offers a path to true passive income without the hefty tax burden of capital gains or depreciation recapture. But here’s the exciting part for agents: you can earn commissions by facilitating these transactions while positioning yourself as a trusted advisor.

What Is a 1031 DST Exchange?

A 1031 exchange allows investors to defer capital gains taxes by reinvesting proceeds from a property sale into a like-kind property. Traditionally, this means swapping one rental property for another, which can be stressful due to tight timelines (45 days to identify a property, 180 days to close). Enter the Delaware Statutory Trust (DST), a legal entity that allows multiple investors to own fractional interests in high-quality, income-producing commercial real estate—think Amazon distribution centers or FedEx facilities—without the management headaches.

As Larry Karp explained, DSTs are ideal for:

• Older investors looking to exit active property management.
• High-net-worth clients seeking tax-efficient strategies.
• Sellers struggling to identify replacement properties within 1031 timelines.

By guiding clients to sell their rental properties and invest in a DST, you can secure the listing, earn a commission, and build long-term client relationships by offering a solution that saves them money and stress.

The Numbers: A Real-World Example

To illustrate the power of DSTs, James Brown shared a conservative example:

• Scenario: A client bought a property for $650,000 years ago, now worth $1 million.
• Traditional Sale: Selling outright triggers ~$130,000 in taxes (capital gains + depreciation recapture).
• Rental Income: Renting yields ~$48,000/year, but after costs (taxes, insurance, repairs), nets just $13,400 (1.34% return).
• DST Option: Sell the property, invest $965,000 (after closing costs) in a DST with an 8% return, generating $77,000 annually—with no management hassles.

This stark contrast is a compelling pitch to clients. Plus, DSTs offer:

• Stepped-up basis for heirs, minimizing taxes upon inheritance.
• Diversified investments across multiple properties.
• Debt replacement to satisfy IRS requirements without out-of-pocket costs.
• Flexibility for partial investments (e.g., if a client sells a $1M property but only buys an $800,000 replacement, the remaining $200,000 can go into a DST).

How Agents Benefit

1. Secure Listings: Approach investors with this tax-saving, passive-income solution to win their listings.
2. Earn Commissions: Facilitate the sale of their property and connect them with a DST advisor like Larry Karp.
3. Stay Top of Mind: Share this knowledge through emails, texts, or social media to differentiate yourself from competitors. As James noted, “Successful agents find unique value propositions and go back to their client base over and over.”

Pro Tip: Minimum DST investments typically start at $100,000, making this accessible for many high-net-worth clients. Contact Larry Karp at larry@1031financial.com or 516-350-2643 for tailored guidance.

Two Tales from the Street: Critical Updates for Agents

Beyond DSTs, the webinar highlighted two urgent issues affecting real estate transactions:

1. Government Shutdown Stalls Flood Insurance and Closings

The ongoing government shutdown (22 days as of October 21, 2025) has halted new issuances of National Flood Insurance Program (NFIP) policies, impacting 1,300 closings daily in Florida and 28,000 nationwide. If a property requires flood insurance (common in Florida’s low-lying areas), loans won’t close without it. Action steps:

• Have the flood conversation early with buyers and sellers.
• Check flood zone maps ([insert link to flood zone map]) to assess risk.
• Focus on cash buyers or properties outside flood zones to avoid delays.
• Use this as “Did You Know” content to educate clients and stay top of mind.

2. Ring Cameras: A Legal Pitfall for Landlords

Landlords using Ring cameras with audio recording risk lawsuits under Florida Statutes 810.145 (Video Voyeurism) and 934.03 (Wiretap Act). Plaintiff attorneys are targeting these cases due to low damage thresholds ($100/day, up to $1,000) and the potential for significant attorney fees and punitive damages. Best practices:

• Disable audio on all Ring cameras.
• Ensure lease agreements address tenant consent, but note this doesn’t cover third parties.
• Share this warning with landlord clients to position yourself as a knowledgeable resource.

Bonus Tip: Control Title and Save Time

To streamline closings, James Brown recommends specifying New Path Title as the closing agent in paragraph 20 of the FAR/BAR contract (line 590). This ensures you work with a trusted title company, avoids fee disputes, and saves time. Request a free Title Advance to check equity and liens before taking a listing—helping you win clients by showcasing your expertise.

Take Action: Leverage DSTs and Stay Ahead

The real estate landscape is evolving, and tools like DSTs can transform how you serve clients and grow your business. As Ryan Poole emphasized, “This is information you’re not getting anywhere else.” By mastering DSTs and staying informed on issues like flood insurance and Ring camera laws, you can differentiate yourself, win listings, and build lasting client relationships.

Ready To Elevate Your Real Estate Game?

Visit RealTrade, the social marketplace where buyers and sellers connect directly with agents—no lead fees, just results.

Connect with Larry Karp 

Larry Karp - 1031 Financial - Advisor 

Resources to Bookmark

• Webinar Outline
• New Path Title: go under “Realtor Resources” for the webinar recording and outline.
• Title Advance Link: for fast, no-cost reports that help realtors win listings and close faster. These reports include critical details on mortgages, liens, encumbrances, open permits, code violations, taxes, and utilities—everything needed to streamline your sale!
• RealTrade YouTube: Catch past sessions and links to tools like Title Advance and our closing cost calculator.

Got questions? Text James at New Path Title’s 24/7 attorney support (561) 307-0885 or message me (Ryan Poole) on RealTrade. Here’s to your next big win!