Why Consolidate?
Owning multiple small rentals across Oʻahu often sounds like diversification—but in practice, it can feel like death by a thousand maintenance calls.
Between managing different tenants, juggling utility bills, and coordinating vendors for each unit, your calendar fills fast. And when one unit goes vacant, your cash flow can dip hard.
A 1031 exchange is a tax deferral strategy that allows real estate investors to sell an investment property and reinvest the proceeds into another like-kind property without paying capital gains tax at the time of sale.
With a 1031 exchange, you can sell several of those smaller properties and “trade up” into one larger, more strategic asset—or a professionally managed Delaware Statutory Trust (DST). You keep your equity working, but reduce your headaches and admin load. This isn’t just about convenience—it’s about better performance and peace of mind.
Real-World Scenario:
From Studio Swirl to Solid Simplicity
Let’s say you own three older walk-up studios in Moʻiliʻili. Each brings in $1,400–$1,600 per month, but they come with aging plumbing, rising insurance premiums, and frequent turnover from UH students. After expenses, you're clearing about $3,500/month total—but it’s a full-time job.
You decide to sell all three in a 1031 exchange. The combined sales net you $1.8 million in equity.
Option 1:
You exchange into a single-tenant NNN (triple-net) retail building in Honolulu leased to a national coffee chain on a 10-year lease. No toilets to fix, no property tax surprises—just a consistent monthly check and professional property management. Net cash flow? Around $5,000/month.
Option 2:
You opt for a DST portfolio: part of your funds go into a multifamily DST in Phoenix, another portion into an industrial DST in Dallas, and the rest into a medical office DST in the Carolinas. You’re now diversified across three sectors and states—with zero landlord responsibilities. Monthly distributions are direct-deposited, and your calendar just opened wide.
Bottom Line
Consolidation is about quality over quantity. If you’re feeling stretched managing scattered rentals—or looking to retire from active landlord life—this strategy can streamline your income and lifestyle.
Less time managing tenants. More time enjoying the islands.
Here's what BridgeWise Group brings to the table:
Strategic 1031 Exchange Planning We help you understand your tax liability and walk you through your options so you can defer capital gains and keep more of your wealth working for you.
Access to Passive Income Alternatives Not interested in another hands-on property? We connect you with professionally managed DSTs that can generate monthly income—without the landlord headaches.
Trusted Local Network We collaborate with CPAs, estate attorneys, financial advisors, and qualified intermediaries to make sure every piece of your exit strategy is coordinated and smooth.
Tailored Solutions for Your Goals Whether you want to consolidate properties, diversify across sectors, or simply simplify your life, our group will craft a plan that fits your lifestyle and financial future.
List and Sell Your Investment Property We’ll handle the listing, marketing, and sale of your property to ensure a smooth, top-dollar transaction.
Identify & Secure Your Next Investment Whether you're trading up, consolidating, or going passive with a DST, we’ll help you find the right replacement properties that align with your goals and the 1031 exchange rules.
Francein Hansen, 1031 exchange and DST Specialist
