Written by The White Law Group• January 2, 2022• 6:21 pm• Blog, Investment Loss Recovery

National Multifamily Portfolio IV DST: Securities Investigation

National Multifamily Portfolio IV DST – Investigating Potential Claims

Are you concerned about your investment in National Multifamily Portfolio IV DST? If so, the securities attorneys at The White Law Group may be able to help you by filing a FINRA Arbitration claim against the brokerage firm that sold you the investment.

Table of Contents

Delaware Statutory Trusts, or DSTs, are an alternative for 1031 exchange investors seeking replacement properties, allegedly offering the potential for monthly income and diversification without any on-going landlord duties.

Inland Private Capital Corp., a sponsor of 1031 exchanges structured through Delaware Statutory Trusts (DSTs), filed a form D in 2019 to raise capital from investors for the offering, National Multifamily Portfolio IV DST, according to a filing with the SEC. The total offering amount sold to investors was purportedly $24,193,291. Selling Commissions, Dealer Fees and Placement Agent Fees were estimated at close to 10% of the total offering amount.

1031 Exchange Risk Factors

Reduction or Elimination of Monthly Cash Flow Distributions – Like any investment in real estate, if a property unexpectedly loses tenants or sustains substantial damage, there is potential for suspension of cash flow distributions.

Tax Status Changes – The income stream and depreciation schedule for any investment property may affect the property owner’s income bracket and/or tax status. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities.

Fees/Expenses – Investors’ returns may be affected by the costs associated with the transaction. and may outweigh the tax benefits.

Property Value Loss – All real estate investments have the potential to lose value over time.

Possibility of Foreclosure – All financed real estate investments have potential for foreclosure.

Illiquid Investments – 1031 exchanges are commonly offered through private placement offerings and are illiquid securities. There is no secondary market for these investments.

Potential Lawsuits to Recover Investment Losses

The White Law Group is investigating the liability that FINRA registered brokerage firms may have for improperly recommending high-risk investments to investors.

Despite the risks of investing in 1031 DSTs, brokerage firms continue to push this type of investment because of the high commissions associated with their sale and creation.

Fortunately, FINRA does provide for an arbitration forum for investors to resolve disputes if a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment. It is possible that they could be found liable for investment losses in a FINRA arbitration claim.