Answer
Feb 13, 2025 - 11:30 AM
Yeah, that's a little different insofar as, there is a secondary market for mineral rights interests unlike there's no secondary market for fractional interest in a DST. And so the sponsors that we work with state upfront that it's their intent to basically have an offering on day one for a particular 1031 qualified group of mineral rights. And that offering is the same for everybody who invests. And let's say it's a $100 million offering. So they're going to raise $100 million of 1031 capital into this basket. And everyone is getting the mineral rights from the same 125 properties in a handful of states. And then what the sponsor intends to do is five years later, orchestrate a sale that you can opt in to or out of. But it's basically to orchestrate a sale of all of those mineral rights back into the market to another buyer. And so that you are not left alone to figure out how to liquidate your tiny fractional interests to cost 125 properties. That part of the whole program is to provide that end game. And I'm giving you a broad brush because the details of that depend on the offering. But generally speaking, there is already built into the program an exit strategy so that all of those mineral rights will be re-bundled, re-sold. And then you have a chance to do another 1031 exchange if there's still remain capital gains taxes to be deferred.
