Yes, this is the correct breakdown based on the facts presented. However the commissions for many DSTs is north of 5% cited in your example. I have found that on average the commissions are closer to 6%, with some DSTs lower and some higher. Hope that helps!Thanks for the response RossR. Say the investment is 100k, commission is 5k and the investment pays 5%. So 105k is invested at 5%. Annual return is $5025. RIA will take 1% of 105k or $1050 out of this return leaving $3975 to be distributed to the investor. This becomes close to 4% cash flow on the original investment of 100k. Have I got it right?Hi,
Hope I can help clarify...
"If you gave 100k to a RIA for DSTs, how much of it is expected to be invested vs how much is used in fees?"
The way we work as an RIA is your $100K gets invested in full...plus you are credited the commissions I don't take (5%-8%); therefore your equity on the closing statement will show $105,000-$108,000 (depending on the commission baked into your DST). I get paid 1% annually, as an AUM fee, from the DST cash flow.
Statistics: Posted by RossR — Fri May 10, 2024 8:12 am — Replies 11 — Views 1610
