Written by The White Law Group• August 4, 2021• 4:43 pm• Blog, Current Investigations

Healthcare Hospitality II DST Securities Investigation

Hospitality Healthcare II DST Securities Investigation, featured by top securities fraud attorneys, The White Law Group

Investigating Potential Claims – Healthcare Hospitality II DST

Are you concerned about your investment in Healthcare Hospitality II 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

Inland Private Capital Corp. is a sponsor of Delaware Statutory Trusts (DSTs) to complete 1031 tax-deferred exchanges. The company reportedly filed a Form D to raise capital from investors for the offering Healthcare Hospitality II DST , according to SEC filings. The total offering amount sold was purportedly $8,086,400.

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.