Diversification & Risk Mitigation
After 35 years of owning and operating a 24-unit apartment building in Los Angeles, Robert and Elaine decided it was time to step away from tenant calls, repairs, and the stress of California rent regulations.
Their property had appreciated significantly over the decades, and selling it represented nearly 50% of their total net worth.
Client:
Robert & Elaine Harrison
Case Study
Diversification & Risk Mitigation
Date:
November 22, 2020
Category:
Real Estate
01. Сhallenge
Retiring From Active Management After a Lifetime in Real Estate
Clients: Robert & Elaine Harrison
Profile: Late 70s, sold a Los Angeles multifamily property representing nearly half of their net worth
After more than 35 years of owning and operating a 24-unit apartment building in Los Angeles, Robert and Elaine reached a point where active management no longer fit their lifestyle. Ongoing maintenance, rising operating costs, and increasing regulatory uncertainty in California had turned what was once a rewarding investment into a growing source of stress.
Goals
- Preserve lifetime equity accumulated over decades of ownership
- Reduce concentration risk tied to one property and market
- Fully exit active property management
- Generate reliable monthly income in retirement
02. Solution
We structured a 1031 exchange into a diversified portfolio of Delaware Statutory
Trust (DST) investments, allocating proceeds across five carefully selected DST
offerings diversified by asset type, sponsor, and geography.
This approach spread out risk and eliminated concentration in any one market, tenant, or operator.
03. Outcome
- Robert and Elaine now receive a consistent monthly income without the responsibilities of property ownership, and no longer rely on the performance of a single asset.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS:
The case study does not reflect actual clients. Any reference to securities is based upon historical data that is publicly sourced. No statement made herein is to suggest stock market performance or future performance, and no case study is used to imply future performance.
The case study is intended to illustrate services available through the adviser. They do not necessarily represent the experience of any clients.
