Written by The White Law Group• July 19, 2021• 7:20 pm• Blog, Current Investigations

Investment in CORE Pacific Crosslakes DST?

Concerned about your investment in CORE Pacific Crosslakes DST?

Are you concerned about your investment in CORE Pacific Crosslakes 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.

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CORE Pacific, an investment advisory firm is reportedly focused on commercial real estate and real estate-related investments., according to its website.

The company filed a form D in 2017 to raise capital from investors for the offering, CORE Pacific Crosslakes DST. The total offering amount sold was purportedly $5,731,900. 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.

Risk Factors related to a 1031 Exchange

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

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.

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.

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.

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

Investigating Potential Lawsuits

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 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.