At our December DIG Philly meeting, Fred Hubler said something that real estate agents might not want their clients to hear: "The one I'm personally in [the value-add DST], this is one benefit that you might not want to tell any of your investors because I don't want to take your business."
Then he explained why $100,000 in a DST gives you access to better properties and better tenants than $100,000 as a down payment ever could.
Let's be blunt about the math: "If someone has $100,000 and they're accredited, they have $100,000 to do real estate. There's a cap to the quality of property they're gonna buy if the $100,000 is your down payment."
What $100K buys as a down payment (20-25% down):
There's nothing wrong with these properties. Millions of people have built wealth exactly this way. But let's be honest about what you're buying—and more importantly, who you're renting to.
Here's where Hubler gets uncomfortably honest: "There's a cap to the quality of tenant that will be in that quality of property. Like that's just the way the world works. Rich people aren't in Section 8."
This isn't about being elitist. It's about acknowledging reality:
$400K-$500K properties typically attract:
Institutional-grade properties attract:
The difference isn't just tenant quality—it's tenant stability, creditworthiness, and professional relationship to the property.
"That same $100,000 can be a partial owner of an $80 million Cantor Fitzgerald [investment property]. Like it's..."
Hubler trails off because the comparison is almost absurd. With the same $100,000:
Option 1: Direct Ownership
Option 2: DST Fractional Ownership
You're not buying a different amount of real estate. You're buying a different class of real estate.
Hubler then pivots to perhaps his most important point: "All of our doctors who have the $900,000 a year salary—they're the ones you want to go to if you have cancer or brain surgery—they have no time and they have no patience and they have no skill to be a landlord."
Let's break down this doctor profile:
Now here's the key insight: This doesn't just apply to doctors.
The "doctor example" is just the extreme case. But the principle applies to anyone who:
Values their time highly:
Recognizes their limitations:
Has better uses for their expertise:
"You guys that are landlording, God bless you. I outsource my landlording to him."
This is Fred Hubler—a real estate professional who specializes in DSTs—admitting he doesn't even want to be a direct landlord himself.
If someone who understands real estate inside and out chooses to outsource landlording, what does that tell you about whether high-earning professionals should be managing their own properties?
DSTs offer something unique by combining three benefits:
Your $100K gets you into properties and tenant relationships you could never access directly.
Cantor Fitzgerald, Inland, and other institutional operators manage these properties with teams of professionals—not you juggling contractor calls while trying to do your actual job.
The doctor with a $900K salary who spends 20 hours monthly managing a rental property isn't saving money—they're losing $15,000+ monthly in opportunity cost.
Hubler's opening confession is telling: "I'm personally in, and this is one benefit that you might not want to tell any of your investors because I don't want to take your business."
Traditional real estate agents earn commissions on property sales. If you invest $100K in a DST instead of using it as a down payment on a $500K property, that agent loses a commission.
The incentive structure encourages agents to promote direct ownership even when it might not be optimal for the client.
This isn't malicious—it's just how the business works. But it means investors need to think independently about what actually serves their goals.
Let's be honest about what successful landlording requires:
Essential Skills:
Personal Qualities:
Do you have these skills? More importantly, do you want to develop them?
A brain surgeon doesn't become less competent at medicine because they're terrible at property management. They're just terrible at property management.
Here's the math that matters:
Doctor earning $900K annually:
Even if that rental property nets $30K annually, the doctor is losing $78K in value by doing it themselves instead of seeing more patients.
But it's not just doctors:
Tech executive earning $300K:
The calculation is simple: If your professional hour is worth more than landlord hour, you're going backwards financially by being a DIY landlord.
Hubler's comment cuts to something uncomfortable: Property quality determines tenant quality.
Lower-tier properties:
Institutional-grade properties:
With $100K as a down payment, you're in tier one by default. With $100K in a DST, you can access tier two.
To be fair, direct ownership isn't always wrong:
Direct ownership works when you:
DSTs work when you:
Neither is "better" universally. They serve different investor needs.
Here's what it comes down to: What do you want from real estate investing?
If you want: Maximum hands-on control, potential for higher returns through your own efforts, full decision-making powerChoose: Direct ownership with your $100K as down payment
If you want: Access to institutional-grade properties, professional management, passive income, tax efficiency, time freedomChoose: DST with your $100K as direct investment
The $100K is the same. The outcomes are radically different.
Your $100,000 can buy you two very different real estate experiences:
Option A: Part-owner of a $400-500K property in an area like Coatesville, managing working-class tenants, handling maintenance calls, coordinating contractors, spending 20+ hours monthly on landlording
Option B: Part-owner of an $80 million institutional property, Amazon or Walgreens as tenant, Cantor Fitzgerald managing everything, zero hours monthly required
Same money. Different class of property. Different class of tenant. Different class of life.
As Hubler puts it: "God bless you" to the landlords who want to do the work themselves.
But for the doctor earning $900K who would rather save lives than fix toilets? There's a better way to own real estate.
And if a real estate professional who specializes in properties chooses to "outsource his landlording," maybe that's worth considering.
Delaware Statutory Trusts require accredited investor status with minimum investments typically starting at $100,000. Direct real estate ownership and DST investing serve different investor needs and goals. This article is for educational purposes only. Always consult with qualified tax, legal, and financial professionals before making investment decisions.
Image by Sebastian Wagner from Pixabay