In the realm of real estate investments, a few names stand out like Dwight Kay, Founder and CEO of Kay Properties and Investments. Leading one of the most experienced firms in Delaware Statutory Trust (DST) 1031 exchange investments, Dwight has transformed the landscape of 1031 exchanges with his firm's participation in over $30 billion of DST 1031 transactions. A recognized authority, Dwight is considered to have published the first book dedicated to DSTs for 1031 Exchange investors, cementing his place as one of the first hyper-focused on this specialized field.
With hundreds of years of collective expertise backing his firm, Kay Properties provides investors with a unique opportunity to engage in passive real estate ownership for their 1031 exchanges. His thought leadership has been featured numerous times in publications such as Forbes, Kiplinger, and the New York Real Estate Journal, offering invaluable insights on topics like 1031 and 721 exchanges, DSTs, and UPREITS. His vision for the future of real estate investing informs the continued impact of his innovative approach on the industry.
How did you start Kay Properties & Investments, and what was your initial vision for the company?
I had been in commercial real estate since my early days even before the Great Financial Crisis of 08/09. I started as an analyst for a wealth management firm that sold mutual funds, annuities, and life insurance and also did a moderate amount of 1031 exchange investments. My job was to review various 1031 exchange properties and DSTs for our clients – leases, offering materials, third-party diligence reports, etc. I quickly realized this is what I wanted to specialize in, so I personally invested in a Delaware Statutory Trust investment alongside some of my earliest clients.
It wasn't a large amount of money at that time, but it was a foundational moment for me. I decided right then and there that I wanted to be the absolute best at DSTs and that I wanted to specialize in them so as to provide hands down the best education and understanding of DSTs, 1031 exchanges, and 721 exchanges for investors nationwide. I knew DSTs could fit a need with clients, and that they would need someone to help them out with understanding the DST structure. They were going to need a specialist, and Kay Properties & Investments was going to be the go-to specialist for Delaware Statutory Trust, 1031 exchange, and 721 exchange UPREIT investors.
What circumstances led you to create Kay Properties & Investments?
Once I realized I wanted to specialize in Delaware Statutory Trust investments, then I set out to build a platform that was best in class in the DST 1031 Exchange space, and the www.kpi1031.com marketplace was born.
Together with a phenomenal group of highly talented team members, we have been able to help thousands of investors nationwide participate in DST, 1031, and 721 exchange investments. Above all that, I truly believe I have been blessed by the Lord and that this has been His doing for His purposes.
Where did the idea for building one of the largest 1031 exchange marketplaces in the country come from?
The truth is that building the www.kpi1031.com marketplace platform has been an ongoing and never-ending process that has stemmed from working for nearly two decades with 1031 Exchange investors. It was through this vast experience that I have wanted to create a platform where the knowledge and experience I have accumulated over the years could be passed down to my team and our thousands of investors from across the country.
I really wanted to share our deep knowledge about DSTs, 1031 exchanges, and 721 exchanges with our investors. This is my passion, to help investors make the right decision for their particular situation. Kay Properties and the www.kpi1031.com marketplace platform provides investors access to typically 20-40 different DSTs at any given time from 25 different sponsor companies as well as a deep knowledge pool on all things DST, 1031 exchanges, and 721 UPREIT exchanges as can be found in our company blog, podcast, videos and educational materials which include the DST 1031 Digest magazine which we publish (www.1031dstdigest.com).
What is something unique about your brand that sets you apart from your competition?
First, in an effort to serve our clients over the past nearly two decades, we have created one of the most sophisticated and complete educational platforms for DST 1031 investors and 721 exchange investors in the nation. We believe that no one in the country does more to educate accredited investors, and anyone interested in DST Investments for their 1031 exchange than Kay Properties.
This educational menu includes weekly webinars that help investors understand the 1031 exchange process and the many nuances of Delaware Statutory Trust properties, weekly live, conference calls, monthly seminars, and workshops throughout the country along with a complete library of relevant articles that are searchable via the Kay Properties blog. Kay Properties also has a full podcast library that covers many important topics for DST 1031 investors, and finally, Kay Properties offers a custom one-on-one consultation for interested clients.
What is a problem you have identified in the world of 1031 exchanges, and how does Kay Properties address it?
One of the greatest problems in the world of 1031 Exchanges is that investors sometimes forget that chasing the greatest returns can mean increased risk. Kay Properties has always emphasized a risk mitigation approach to real estate and DST investing, emphasizing the goal of lowering risk where possible above all else. Because of this philosophy, we have developed certain strategies that are the investment hallmarks that I established when starting the firm and were instrumental in helping Kay Properties mitigate risks during the recent COVID-19 pandemic. Some of these investment pillars include:
Avoid recession-prone, highly volatile real estate asset classes (i.e. hotel and lodging properties, senior housing, and oil and gas production facilities.)
Don’t load up on debt. The pandemic exposed many highly leveraged investors to potential catastrophe, while debt-free investors avoided certain encumbrances associated with long-term mortgages including lender foreclosure. This isn’t to say all debt is bad; it isn’t. But a defensive real estate investment strategy makes limited or no use of debt a priority to mitigate risk. At the www.kpi1031.com marketplace, investors are able to compare and contrast debt-free DST offerings with leveraged DST offerings. We work with investors who need debt-free DSTs as well as with investors who need debt replacement for their 1031 exchanges, so having DSTs with debt is something that is important for us as well. Having a variety of debt-free and leveraged DSTs is one of the things that truly sets us apart.
Don’t put all your eggs in one basket. It’s our timeless defensive strategy to diversify real estate investment capital into multiple properties in multiple geographic locations in multiple asset classes and with multiple tenants. This can be accomplished easily through a wide range of DST properties accessed on the www.kpi1031.com marketplace. It is important to remember that diversification doesn’t necessarily mean higher returns or that there will not be losses.
Looking back on the last five years of your career, what has been the highlight in the growth of Kay Properties & Investments?
Two things come to mind. The first is that by helping investors free themselves from the toils of the Three T's—Tenants, Toilets, and Trash—we have helped thousands of clients step away from the headaches of property management and spend more time doing the things they really love doing whether that be time with their children, grandkids, travel, hobbies, or other endeavors.
The second thing is that we are considered by many to be the most experienced and knowledgeable investment firm in the country specializing in Delaware Statutory Trust (DST), 1031 exchange, and 721 exchange UPREIT investments. The firm was established with the emphasis on providing real estate investment options to high-net-worth clients looking for passive real estate ownership, and as part of that, we created one of the largest 1031 exchange and real estate investment online marketplaces in the country that generates some of the largest DST 1031 investment volumes in the United States.
Kay Properties operates a fully integrated platform that includes a growing team of DST 1031 experts and back-end support specialists that provide Kay clients with deal sourcing, DST property analysis and vetting, transaction coordination, investor relations, in-house accounting, legal, finance, and asset analysis.
What’s in store for your next endeavor?
The next endeavor is really an ongoing passion of mine, and that's the continued growth of our sister company Cove Capital Investments. Now it is a monumental task building a DST sponsor company, but we have successfully done that. Today, Cove Capital Investments has more than 1,700 investors, 100 properties in our portfolio, and a total of more than 2.3 million square feet of real estate sponsored on behalf of our DST and real estate fund investors.
The aspect of Cove Capital that I am very humbled by is that all but two of the 100 properties in our portfolio are debt-free. That means that the vast majority of our DST property offerings are not subject to lender foreclosure, cash flow sweeps, and other dangers associated with debt. It really goes back to our emphasis on reducing risk when investing in real estate and protecting our investors from a bad situation with a lender when possible.
About Kay Properties and www.kpi1031.com:
Kay Properties helps investors choose 1031 exchange investments that help them focus on what they truly love in life, whether that be their children, grandkids, travel, hobbies, or other endeavors (NO MORE 3 T’s - Tenants, Toilets and Trash!). We have helped 1031 exchange investors for nearly two decades exchange into over 9,100 - 1031 exchange investments. Please visit www.kpi1031.com for access to our team’s experience, educational library and our full 1031 exchange investment menu.
This material is not tax or legal advice. Please consult your CPA/attorney for guidance. Past performance does not guarantee or indicate the likelihood of future results. Diversification does not guarantee returns and does not protect against loss. Potential cash flow, potential returns and potential appreciation are not guaranteed. There is a risk of loss of the entire investment
principal. Please read the Private Placement Memorandum (PPM) for the offerings business plan and risk factors before investing. Securities are offered through FNEX Capital LLC member FINRA, SIPC.
