MHC Affordable Housing DST – Investment Investigation
The White Law Group is investigating potential securities claims involving MHC Affordable Housing DST, a Delaware Statutory Trust (DST) formed in 2021. According to a Form D filed with the Securities and Exchange Commission (SEC), the sponsor is seeking to raise approximately $32.8 million through a private placement offering under Rule 506(b) of Regulation D.
The filing indicates that the minimum investment accepted from outside investors was $100,000. As of the filing, the issuer reported sales of over $10.5 million to 27 investors, with nearly $2 million in estimated sales commissions. The trust is headquartered in Los Angeles, California.
Selling Agent Firms
The following broker-dealer firms were listed in the Form D as selling agents for the offering. According to the filing, an estimated $2,000,000 in commissions was earmarked for sales of this investment:
- AAG Capital, Inc. – Wesley Chapel, FL
- American Portfolios Financial Services Inc. – Holbrook, NY
- DMK Advisor Group, Inc. – Winter Springs, FL
- Great Point Capital LLC – Chicago, IL
- Titan Securities – Addison, TX
- S2K Financial LLC – Orlando, FL
Understanding DST Investments
A Delaware Statutory Trust (DST) is a legal entity often used in real estate investments. DSTs are frequently offered as 1031 exchange replacement properties, allowing investors to defer capital gains taxes when selling investment property. While they can provide diversification and potential tax benefits, DSTs are considered high-risk, illiquid private placement investments.
Risks of Investing in DSTs
While some investors are attracted to DSTs for their potential tax advantages, it is important to understand the risks, which may include:
- Illiquidity – DST interests are not traded on an exchange. Investors may have difficulty selling their interests prior to the trust’s liquidation event.
- High fees and commissions – Private placements often involve significant upfront fees, including sales commissions and offering costs, which may reduce the overall return.
- Sponsor risk – Performance of the investment is dependent on the sponsor’s decisions and management of the properties.
- Market and tenant risk – Real estate investments are subject to fluctuations in market conditions, tenant occupancy, and operating expenses.
- Limited control – Investors typically have no voting rights or say in management decisions.
Given these risks, private placement investments like MHC Affordable Housing DST may be unsuitable for many retail investors.
FINRA Arbitration for Investor Losses
Broker-dealers who sell DSTs are required to conduct adequate due diligence to ensure that the investment is suitable for each client. If a financial advisor recommends a DST that is unsuitable based on an investor’s financial needs, experience, or risk tolerance, the investor may be able to pursue recovery of losses through FINRA arbitration.
The White Law Group has handled numerous claims involving DSTs and other high-risk private placements on behalf of investors nationwide.
Frequently Asked Questions
1. What is a DST investment?
A DST, or Delaware Statutory Trust, is a legal entity that holds title to real estate. Investors purchase beneficial interests in the trust, often used for 1031 exchange purposes.
2. Why are DSTs considered risky?
DSTs are generally illiquid, carry high upfront costs, and depend heavily on the sponsor’s management and market conditions. They may also concentrate investor funds into a single property or sector, increasing risk.
3. What can I do if I lost money in a DST?
If you were recommended an investment by a broker or financial advisor and suffered losses, you may be able to pursue a claim through FINRA arbitration to recover damages.
The White Law Group is Investigating
If you invested in MHC Affordable Housing DST or another DST investment at the recommendation of your financial advisor, please contact The White Law Group at (888) 637-5510 for a free consultation.
For more information on our securities fraud investigations, please visit www.whitesecuritieslaw.com.
Last modified: October 3, 2025
