i will soon be listing a rental property for sale and am planning to 1031 the proceeds (expected around $300k).
i'm looking at investing in one of three possible replacements:
1. direct purchase of self storage unit via traditional 1031
2. 1031 into DST that would be invested in assortment of NNN properties (walgreens, autozone, etc)
3. 1031 into self storage syndication in which i would be tenant in common with the overall equity partner (the syndicator)
#1 is pretty straightforward to me, but one i am leaning away from due to learning curve, time commitment, and other factors
#2 seems appealing, but the projected cap rate, while much much better than my current property, is lower than i had been dreaming of
#3 seems like it could be the most lucrative, but feels a little riskier since the holdings don't seem to have as many legal assurances and other things that i'm not well versed on
anyway, my question pertains to depreciation for #2 and #3.
for #2, the DST takes investor money and couples with lender financing. as a result, your 'share' is larger. so, if you put in $100k, there might be $200k of lending for your share. As such, you would be able to depreciate $300k of value.
for #3, i think the way it would work is that there isn't financing involved and you'd only get depreciation on your direct money invested.
i'm curious if anyone here has experience in either of these situations. i know it's likely a rare condition in the grand scheme of RE investing.