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Show Summary
In this episode of the Investor Fuel Podcast, Olivia interviews Jon Lontai, a financial advisor specializing in alternative investments. Jon discusses the importance of understanding 1031 exchanges and Delaware Statutory Trusts (DSTs) as valuable tools for investors looking to defer taxes and manage their real estate investments more effectively. He emphasizes the need for real estate agents to be aware of these options to better serve their clients. Jon also highlights the challenges faced by CPAs in keeping up with innovative investment strategies and the importance of networking within the financial sector to connect clients with the right solutions. The conversation wraps up with Jon’s aspirations to educate more people about alternative investments and their benefits.
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Investor Fuel Show Transcript:
Jon Lontai (00:00)
For example, we’ve all heard of a 1031 exchange. buy one, you own a piece of real estate and you exchange it for another and you defer the taxes along the way. Been around for a very, very long time. And an alternative is investment that’s out there is called a 1031 DST.and what it means is you exchange your ownership instead of buying one piece of property and and selling it and buying another you sell your property and then you basically have someone else manage a different property for you professionally
so you’re no longer the landlord which is great for a
lot of people, people who want to retire, know, people who want to go to Arizona and play pickleball and don’t want to change water heaters. You know, that’s, that’s really, really appealing for a lot of people. And I think an eye opening thing for me is I was networking with some people who are real estate agents,
and it was astounding to me how few of them had heard that.
Olivia Gastineau (02:26)
welcome to the investor fuel podcast. My name is Olivia, and I’m joined here today with my special guest, Jon Jon is a financial advisor specializing in alternative investments here today to talk to us about all of his expertise and knowledge. Thank you for taking the time out of your day today, Jon.Jon Lontai (02:46)
Thank you, Olivia, for having me. Appreciate it.Olivia Gastineau (02:48)
I’m excited to dive in about all of this good information that you’re sharing with us today. I think our listeners are really going to take something away from how you’re approaching your very special niche of expertise that you have. So let’s dive in. First off.For people who may not be familiar with your world, give us the short version. What’s your main focus these days? And if you can explain to us what a 1031 is, and then we’ll dive deeper into what your specialty is.
Jon Lontai (03:21)
Of course. So by way of background, I was a traditional financial ⁓ advisor for many years, doing traditional financial planning, helping clients with stocks and bonds. As you know, for a lot of reasons, it’s very easy for your average investor to do their own financial plan online with with software to invest in stocks and bonds for zero commission. So one of the areas that I found where I was able to provide the most value was an alternativeinvestments and that and so about a year and a half ago or so I switched to a firm that specializes in alternative investments and I’ve seen
I’m really glad I made that decision because I think there’s a lot of things that alternatives can’t do that the average investor can benefit from.
For example, we’ve all heard of a 1031 exchange. buy one, you own a piece of real estate and you exchange it for another and you defer the taxes along the way. Been around for a very, very long time. And an alternative is investment that’s out there is called a 1031 DST.
These have been around for roughly 20 years or so and what it means is you exchange your ownership instead of buying one piece of property and and selling it and buying another you sell your property and then you basically have someone else manage a different property for you professionally so you become you alleviate yourself of those real estate management duties so you’re no longer the landlord which is great for a
lot of people, people who want to retire, know, people who want to go to Arizona and play pickleball and don’t want to change water heaters. You know, that’s, that’s really, really appealing for a lot of people. And I think an eye opening thing for me is I was networking with some people who are real estate agents, you know, in my neighborhood, friends I went to high school and college with, and it was astounding to me how few of them had heard that.
For example, we’ve all heard of a 1031 exchange. buy one, you own a piece of real estate and you exchange it for another and you defer the taxes along the way. Been around for a very, very long time. And an alternative is investment that’s out there is called a 1031 DST.
These have been around for roughly 20 years or so and what it means is you exchange your ownership instead of buying one piece of property and and selling it and buying another you sell your property and then you basically have someone else manage a different property for you professionally so you become you alleviate yourself of those real estate management duties so you’re no longer the landlord which is great for a
lot of people, people who want to retire, know, people who want to go to Arizona and play pickleball and don’t want to change water heaters. You know, that’s, that’s really, really appealing for a lot of people. And I think an eye opening thing for me is I was networking with some people who are real estate agents, you know, in my neighborhood, friends I went to high school and college with, and it was astounding to me how few of them had heard that.
They all knew of a 1031, but then when he said 1031 DST, they were like, what are you talking about? In the investment world, as I know, DSTs have been growing very healthily. There was about 1 billion in transactions with 1031 DSTs in 2015. In 2025, 10 years later, of course, it was closer to 5 billion.
So there’s been tremendous growth in DSTs, but I think the gap is is that a lot of your You know just the neighborhood real estate agents, maybe even commercial real estate agents in your neighborhood Are just not familiar with it and and I think that was really eye-opening for me and and that’s kind of the gap that I’ve been trying to
trying to connect those dots and help educate folks. Just north of Denver last summer, I spoke for about, in front of about 40 or so real estate agents. And I was expecting it by then, but as I said before, very, very few of them, if any, had heard of the 1031, the variety called the DST, which is again a 1031 Delaware Statutory Trust.
So if anyone’s unfamiliar, can search it and get more information about it. It’s not something I came up with or my firm came up with. Again, it’s been around for, you know, decade and a half at least.
Olivia Gastineau (08:27)
Very cool. And how long have you been in the realm of knowing about DST yourself?Jon Lontai (08:34)
Before I started at my new firm that specializes in alternatives, I was aware of them. Again, I wouldn’t say they’re super mainstream, but when you’re in the investment world and you’re talking to RIAs, or Registered Investment Advisors, you’re going to come across people that are aware of them. Like for example, if you’re a CFP, a Certified Financial Planner, you’re going to become aware of those types of investments.⁓ So I guess to oversimplify in the real estate world, very few and far between folks are aware of that. In the investment world, depending on where you are in the investment world, a little bit more likely to be aware of it. So maybe I’ve known about it for five years.
Olivia Gastineau (09:14)
Okay. And would you say that you’re mostly just trying to get this information to people that have owned their investment properties for 30 years now and they’re just tired of dealing with tenants? Is that your primary audience?Jon Lontai (10:05)
Yeah, yeah, if you look up the ideal candidate for a DST, a 1031 DST, would be somebody who has appreciated property, doesn’t want to be a landlord anymore, or just wants to do other things, maybe travel or spend time with their kids. There are implications I won’t get into. A lot of times DSTs are part of a state plan that I won’t get into those details. yeah, I think it’s something that’s growing.I think the more real estate agents that become aware of it. I always tell real estate agents. You don’t need to know every Nook and cranny of a DST. You just simply need to know that that options out there a lot of real estate agents Want to have both sides of the transaction if you’re doing a traditional DST you’re buying a property You’re deferring the taxes and then you’re I’m sorry, you’re selling deferring the taxes and then buying another so there’s a buy the
there’s a transaction and a potential commission on both sides. With a DST, there’s only one you sell, and then the DST kind of takes over that management. So sometimes ⁓ real estate agents think, well, I’d rather do a regular one. But the thing is, is that there’s a lot of clients out there who, the decision is, do I not sell at all?
Or do I sell and potentially do ⁓ a DST or some other and turn that into a passive thing? So I think the more real estate agents know about it, the more they can provide that information to their clients and potentially help them see that value. Again, it doesn’t mean everyone you discuss it with is going to ultimately do it, but being able to speak to some of those alternative investments out there to help clients.
You know, again, I don’t want to sound like I’m picking on real estate agents because I’m really not. A lot of times people, real estate agents are very comfortable with, hey, I’ll help you with your interior design. We’ll help get this thing sold. Hey, let’s get some landscapers here to fix up the front yard. And it’s very, okay, we’ll do this. Here’s the transaction. Boom, we got a sale. that’s a good thing. Real estate agents, that’s how they survive, right? If they don’t get transactions,
they’re not going to make it as a real estate agent. So again, this isn’t a backhanded critique in any way. I think the trick is when you’re talking about implications with taxes or there’s complexities there or maybe the benefits are realized over 10, 15 years in the form of tax deferral and other things. think real estate agents find themselves a little bit out of their comfort zone.
some cases and they may instinctually avoid that topic just because they don’t feel like they’re experts at it or they you know they don’t feel that they can speak to it. The good the message I have for those folks when I speak to them is you don’t have to be an expert you just have to know the basics. We’re talking about capital gains here there’s different ways to manage capital gains and this is one of them.
And a lot of times, real estate agents will reach out to me. They’ll say, hey, I’ve got a client who mentioned taxes. You want to hop on a Zoom, and we’ll just talk it through? And I say, sure. Let’s do it. A lot of times, it’s as simple as that. The real estate agent does not need to be an expert, a subject matter expert. They just need to have the awareness of, we’re talking about capital gains. What ideas have you explored thus far? Are you open to other ideas? OK. Let’s help you
it out. You know as a fiduciary a big thing that I do is if something’s not a right fit I’ll tell them it’s not a right fit. It’s not a matter of trying to find somebody who wants to invest in this way because you know for a lot of reasons and liquidity and others you don’t want someone to do a an investment like this unless it’s truly the right fit for them in their situation.
Olivia Gastineau (13:45)
Okay, a lot of good information. How are you creating your network right now? What are you doing to reach out to as many people as you can?Jon Lontai (13:54)
So a lot of it is through real estate agents CPAs which has other implications I could get into estate attorneys and also business brokers business brokers as you can imagine help people sell businesses, so you know if you have you knowproperty in a gas station or some sort of business that’s been in your family, you go to sell it, a business broker would help you sell it. A lot of times they again focus on that transaction and in some cases those business brokers don’t focus on what are you going to do after the transaction and how are you preparing for that. Sure, go ahead.
Olivia Gastineau (14:36)
You had mentioned earlier about there being a CPA bottleneck. Can you go into that a little?Jon Lontai (15:23)
Correct. So CPAs, and again, I’ll preface this with.CPAs are great. This isn’t backhanded, there’s just not that many of them these days. A lot of people who have graduated with accounting degrees in the last few decades, they go to work for large firms and they’re less likely to kind of have your, you know, put a sign in the front yard and say, hey, I’ll do your taxes for you, Mr. And Mrs. Smith. So that’s kind of like a harder to find thing if you just need someone who’s a CPA and a tax expert in your neighborhood.
clients and folks I talk to all the time tell me I reached out to a CPA and all I got was an email back that said I’m not taking new clients have a nice day and sometimes they just say I’m not taking any clients and they don’t even tell you have a nice day believe it or not can you believe it but but the issue is is that they’re so busy they’re kind of similar to the real estate agent especially around tax time they’ve got their head down they were just cranking out tax
returns and it’s very hard for them just to kind of come up for air. So a lot of times more innovative ideas are either they’re not aware of them in a lot of cases and again to kind of restate financial professionals ⁓ like myself have been doing this for a long time. They’re going to be aware of alternative investments. They’re going to know about private equity, private credit. CPAs are much less likely to be know,
in every aspect of alternatives. And so again, we’re using the 1031 DST as kind of the sounding board for that. But there are others as well. There are other innovative ways you can defer ordinary income and defer capital gains. in my experience, CPAs tend to be very undereducated in that.
even if they were, and again, I’m generalizing here, but there’s a tendency for CPAs not to want to bring up a quote unquote investment because they know that most of their clients are gonna have their own financial advisor most likely, or if they don’t, they’re staunch do-it-yourselfer, but.
to introduce an idea that their financial advisor may not even offer, depending on the firm they’re with. But the CPA might view it as them pitting one financial advisor against another, because they’re, again, if they already have their own. So a lot of times, CPAs just sit that out. Even if they know a certain investment would make a heck of a lot of sense for tax planning purposes, like for those reasons I just identified, they may sit that out.
And so unless the client is very, very educated in reading the Wall Street Journal and staying up on these types of things, they might not know the questions to ask to be able to get to the right answer.
So again, without picking on CPAs, they’re just tremendously busy. I’m sure that’s something you’ve seen in your neck of the woods. I don’t think that’s geographically conditional. I think that that’s pretty much universal across the US in my opinion.
Olivia Gastineau (18:11)
Which part of the country are you in, Jon?Jon Lontai (18:13)
Colorado, just south of Denver.Olivia Gastineau (18:15)
Beautiful. So what’s one big goal that you have in mind?Jon Lontai (18:19)
Well, kind of by way of networking with those groups I mentioned, I’m just simply trying to…connect the dots and help clients where they are. You know, I want clients to know that there’s a lot of solutions out there that they may not be aware of. Some of the traditional professionals they go to for advice on that don’t have the awareness necessarily. And I’m trying to kind of fill that gap and help help people connect to the so we can help the most people we can. It’s really rewarding when you can
you know, do some back of the napkin math and say, hey, this is going to save you, you know, 50 grand in taxes, you know, hey, you’re selling your business in a few years. We can prepare for that starting right now. We don’t have to wait until the transaction. can prepare and help you with those eventual capital gains. So really just trying to get the word out and to find people who can benefit the most.
Olivia Gastineau (19:09)
It makes a lot of sense and wow, I’ve learned so much from listening to you and everything that you have shared with us today has been really informative. So thank you. Before we wrap up, if someone wanted to reach out, connect with you, maybe collaborate, just learn more about what you’re doing. What is the best way for them to reach out to you?Jon Lontai (19:23)
course.Sure, my name’s hard to pronounce so I’ll spell it out and maybe you can put it on the screen there, but it’s j-o-n-l-o-n-t-a-i at gmail.com.
Olivia Gastineau (19:47)
Great, perfect. Well, listen, I appreciate your time and all of your information that you’ve shared today. We definitely need more people in this space to keep doing it the right way. And thanks again for being here. And for those of you turning in, absolutely.Jon Lontai (20:01)
Thank you, Olivia.Olivia Gastineau (20:03)
For those of you tuning in, if you’ve got value from this, make sure you’re subscribed. We’ve got more conversations with operators just like Jon who are there building real businesses, helping real investors just like you. And we’ll see you on the next episode.
