If you are considering a Delaware Statutory Trust (DST) as replacement property in a 1031 exchange, one of the first practical questions is how much you actually need to invest. A DST lets you own a fractional interest in institutional-grade real estate, so the entry point is far lower than buying a whole property on your own. Even so, every DST sets a minimum, and those minimums are not all the same.
This guide explains how DST minimum investments generally work, why they differ for 1031 exchange money versus cash, and what the minimum does and does not tell you about an offering.
Who Can Invest in a DST
Before the minimum even matters, there is a threshold question. DST interests are securities offered through private placements under Regulation D, which means they are generally available only to accredited investors and only by means of a Private Placement Memorandum (PPM). If you do not meet the accredited investor standard, the minimum is not the deciding factor, because the offering is not open to you in the first place.
Typical Minimums: 1031 Funds vs. Cash
Most sponsors set two different minimums for the same offering. For investors bringing 1031 exchange proceeds, the minimum is commonly around $100,000. For investors putting in cash outside of an exchange, the minimum is often lower, frequently around $25,000. These figures are set by the sponsor in the PPM and vary from one offering to the next, so the specific number always comes from the offering documents rather than a fixed industry rule.
The higher figure for exchange funds reflects the added administrative work of accepting 1031 proceeds and the reality that exchangers are usually reinvesting the proceeds of a full property sale. Cash investors are more often building a position alongside other holdings, so sponsors tend to set a lower floor to widen access.
Why Minimums Exist at All
A DST divides a single large property, or a portfolio of properties, among many investors. Setting a minimum keeps the number of investors manageable, which matters because the trust structure and the securities rules governing it limit how an offering can be administered. Minimums also help the sponsor match the size of the capital raise to the property being acquired.
How Minimums Support Diversification
Because minimums are modest compared with the price of an entire building, they make it possible to spread a single 1031 exchange across more than one DST. An investor with a larger exchange might divide the proceeds among several trusts holding different property types or in different regions, rather than placing everything in one. The minimum is what makes that kind of diversification practical instead of all-or-nothing.
A Simple Example
Suppose you sell a rental property and have $300,000 in exchange proceeds sitting with your qualified intermediary. A DST you are evaluating sets a $100,000 minimum for 1031 investors. That minimum means you could commit to this single trust and still identify other replacement property with the remaining $200,000, or you could place the full $300,000 across three DSTs that each meet the minimum. If instead you had $60,000 of cash to invest outside an exchange, a $25,000 cash minimum on the same offering would comfortably allow it.
What the Minimum Does Not Tell You
A minimum is an entry threshold, not a measure of quality. A low minimum does not make an offering more suitable, and a high one does not make it stronger. The minimum says nothing about the underlying property, the sponsor’s track record, the debt on the deal, or the fee structure. All of that lives in the PPM and deserves far more of your attention than the entry number. Treat the minimum as a gate, then do the real work on everything behind it.
The Bottom Line
DST minimums exist to keep fractional ownership workable, and they generally run higher for 1031 exchange funds than for cash investments. The exact figure always comes from the offering’s PPM and varies by sponsor. Use the minimum to gauge whether an offering fits the size of your exchange and your diversification goals, then look past it to the details that actually determine whether a DST belongs in your plan.
Trying to figure out how a DST fits the size of your exchange? Talk to a Specialist to walk through your options. If you are still mapping out your deadlines, the free 1031 Calculator can help you track your 45- and 180-day windows.
This article is for informational and educational purposes only and is not tax, legal, or investment advice. My1031Options.com is an educational resource published by Medalist Diversified, Inc. (NASDAQ: MDRR), a publicly traded company and DST sponsor. This is not an offer to sell or a solicitation of an offer to buy any security. Securities are offered only by means of a Private Placement Memorandum (PPM) and only to accredited investors as defined in Rule 501 of Regulation D under the Securities Act of 1933. All investments involve risk, including the possible loss of principal. Consult your own CPA, tax attorney, and qualified financial professional before selling investment property or executing a 1031 exchange.
