The all-in cost of a typical retail DST runs 8–12% up front (commissions, dealer-manager fee, offering costs, acquisition fees), plus roughly 0.5–1% per year in management fees, plus 1–4% when the property sells. None of it is hidden — it's all in the PPM's 'Estimated Use of Proceeds' table — but almost nobody reads it. Read it. Then ask the one question that reframes everything: 'Of my $500,000, how many dollars buy real estate?'
No DST sponsor hides its fees. They're printed, itemized, in a table, in every private placement memorandum — usually within the first thirty pages. The industry doesn't need to hide them, because it has learned something more reliable than concealment: almost no investor reads the table. The brochure says "institutional-grade multifamily, 5.2% projected distributions." The table says how much of your money never becomes real estate. Only one of those documents gets read.
This guide is the table, translated.
The largest line. This pays the registered representative or advisor who sold you the DST, through their broker-dealer. On a $500,000 investment at 6%, that's $30,000 — earned in full whether the deal succeeds or fails, whether you're called back next quarter or never again.
Paid to the managing broker-dealer coordinating distribution — essentially the wholesale layer between the sponsor and your advisor. Some of it is often re-allowed to selling firms as marketing support, which is worth knowing when the "due diligence conference" is at a resort.
Legal, accounting, printing, filing, and marketing costs of creating the offering, reimbursed to the sponsor off the top.
The quietest line and the one to hunt for. Sponsors commonly charge an acquisition fee for buying the property, and in some structures the trust buys the property from the sponsor at a price above what the sponsor just paid. The PPM will disclose it — in the use-of-proceeds table, in the conflicts-of-interest section, or both. Cross-reference the purchase price against the appraisal date and the sponsor's own acquisition date.
The one question that cuts through everything: "Of my $500,000, how many dollars end up as equity in the building?" In a typical retail DST the honest answer is $440,000–$460,000. The property must appreciate 8–12% just to return you to even. That's not a scandal — it's a disclosed cost of a legitimate structure. But you should make the decision knowing it, not discover it at exit.
Asset management fee — commonly around 0.5–1% of the investment or of gross revenue annually, paid to the sponsor for overseeing the trust. Property management fee — market-rate (often 3–4% of collected rents for multifamily), sometimes paid to a sponsor affiliate; check the conflicts section for whether it's arms-length. Trustee and administrative costs — small individually; they come out of the same cash flow your distributions do.
The thing to check isn't any single number — it's whether the projected distributions in the brochure are net of all of these. They should be. Confirm it in the projections' footnotes.
Disposition fee — typically 1–4% of the sale price, paid to the sponsor when the property sells, on top of actual brokerage commissions. Some deals add a sponsor profit participation above a return hurdle. This is also where the 721-UPREIT question hides: if your DST is designed to roll into the sponsor's REIT, understand who values the property in that internal transaction — see our 721 guide for why that matters enormously.
You don't need to read 300 pages. You need five sections, in this order:
1. Estimated Use of Proceeds — the fee table. Compute: dollars into real estate ÷ dollars you invest. 2. Risk Factors, skimmed for the specific — ignore boilerplate ("real estate values may fluctuate"), hunt for deal-specific entries: single-tenant concentration, loan maturity dates, ground leases. 3. The Financing section — rate, maturity, interest-only period, and what happens at maturity if the property hasn't sold. 4. Conflicts of Interest — every affiliate transaction is listed here, in plain sight. 5. Prior Performance — the sponsor's own table of past programs. Full-cycle results beat projections every time.
Sometimes. Fee-reduced share classes exist for investors who come through fee-only RIAs rather than commissioned reps — the selling commission drops out, though the advisor charges their own fee instead. A handful of sponsors have experimented with lower-load direct structures. And on large investments, some costs are negotiable in ways nobody advertises. The point of this guide isn't that fees make DSTs bad — deferring a $150,000 tax bill at a $45,000 all-in cost can still be excellent math. The point is that you should run that equation, with real numbers, before anyone's projection deck runs it for you.
It's normal for the retail broker-dealer channel. "Normal" and "worth it" are separate questions that only your tax math can answer.
Mechanically the fees come out of the offering proceeds — which are your dollars. Anyone framing that as "you don't pay" has told you something useful about how they communicate.
Search the PPM PDF for "Use of Proceeds." It is always there. It is usually one page. It is the most valuable page in the document.
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