How the Top1031 Grade works

What the Grade is

A Top1031 Grade is a letter, A to F, for a company that creates and manages DST investments (a "sponsor"). It answers two questions about the sponsor's history: have any of its investments lost investors' money, and has it reported results for the investments that ended.

It grades the sponsor's history, never a current offering. It is not a prediction of returns, not a recommendation, and not a rating of safety. No sponsor pays for a letter, improves one commercially, or opts out.

The two questions

1. Has any of the sponsor's programs lost investors' money? A "program" is one DST investment. We count a program as a loss only when there is a public record we can show you: a foreclosure, a bankruptcy filing, a court putting someone else in charge of the property (a receivership), a loan default recorded in court or county files, or the sponsor's own published figure showing investors got back less than they put in. A news story or a lawsuit by itself is not enough. We show those on the sponsor's page, but they do not affect the letter.

2. Has the sponsor finished programs and reported the results? We count a program as reported when it was sold and the sponsor itself printed a number for how investors did: total gain or loss, dollars returned per dollar invested, or average yearly return. The number has to appear in the sponsor's own brochure, offering documents or press release. A sale we only know about from a broker's website, or a "sold" label with no number, is shown on the page but is not used to assign the letter.

Counted outcomes

The one term you need. A sponsor's counted outcomes are its reported programs plus its loss programs. When we say "1 in 20 counted outcomes," we mean one loss for every twenty programs that were either reported or lost. Programs still running, and sales with no reported number, are not in that count.

That is the whole method. We do not weigh factors, score how quickly a program raised money, or turn "we don't know" into a number.

How the letter is decided

Read the rules in order. The first one that fits decides the letter.

One more rule sits outside the table. If a regulator has filed a complaint against a sponsor or its owners and it has not been decided, or a regulator or court has made a final finding whose connection to the sponsor's programs we have not yet established, the record is printed on the sponsor's page and the Grade cannot be higher than C until it is resolved. A complaint alone never produces an F. Allegations are called allegations until a regulator or court decides. A loss we have not yet been able to date is treated as having happened within the last five years until we date it.

Think we have something wrong? Every count links to a document. Send us the one we missed: submit better data.

The record card

Every rated sponsor gets a record card. Each number links to the list of programs it was counted from, and each program links to the document that put it there.

Three of those lines deserve a word.

• "No public outcome found" is not a mark against the sponsor. On our record of 258 dated sales, the typical program is sold five years after its first SEC filing, and 77% are sold within seven. A program older than that with no sale we can find is simply unresolved. It is shown so you can ask the sponsor about it.
• "Status we confirmed" tells you how much of the sponsor's older record we have actually checked. It never changes the letter. It tells you how much weight to put on the card.
• "Capital at documented risk" covers programs in bankruptcy that have not been resolved. Investors may still recover something. The page says which programs are settled losses and which are still open.

Why this is hard to fool

• Losses come from records the sponsor does not control. Foreclosures, bankruptcies and receiverships are filed with courts and county offices. We search those for every sponsor's programs, whether or not the news covered them.
• Silence earns nothing. A sponsor that sells programs and never reports results cannot be graded above C. A sponsor that reports everything, including its losses, can still reach A once those losses are old and rare.
• We start from the SEC's list, not the sponsor's website. A DST that raises money from investors must file a notice with the SEC (Form D). That gives us every program a sponsor has run since electronic filing began in 2009, including the ones its website never mentions.
• Moving a program into the sponsor's own fund is not a sale. Some sponsors transfer programs into an affiliated REIT instead of selling. We show those separately. They count as reported only when the REIT's own SEC filing states what investors received.

What a Grade cannot tell you

• Whether the offering in front of you will perform. The Grade looks back at the sponsor's history. It says nothing about a specific property, its debt, its fees, or whether it suits you.
• How big the returns were. We do not rank sponsors by returns. A program that returned $1.30 per $1 invested and one that returned $2.10 count the same: a finished program whose result the sponsor was willing to print.
• That a clean record proves safety. "No documented loss found" means we searched the sources listed on the card and found none. It is strong evidence, not proof.
• Much about sponsors marked Not rated. At launch in September 2026 most sponsors with three or more programs are Not rated; most started after 2019 and have not finished three programs yet. Their pages still show everything we know.

How a Grade changes

A Grade changes when a count changes: a program is sold and the sponsor reports the result, a loss is recorded, or three or five years pass since a loss date. Every change is dated on the sponsor's page with a link to the document that caused it. Top1031 takes no money from sponsors, and no sponsor has any role in grading.

Before we publish a sponsor's letter, we do three things for that sponsor: check every match between its published performance table and its SEC filings, attach its own publications to each finished program, and search court and county records for every program it has run. Until that is done, the page shows the record card with "Grade pending verification" and the counts we have so far.

Corrections

Every count links to a document. If we missed a sale, a reported result, or a public record, send it to us. Evidence changes a Grade; a letter from a sponsor saying "trust us" does not. A hand correction to a program's category is recorded only with the document that justifies it. Corrections and their outcomes are logged on the sponsor's page and on the changes page. Submit better data.

Grade method version 2 · effective September 4, 2026 · thresholds: A 10 reported programs; B 3; rare loss ≤1 in 20 and >5 years old; D >1 in 10 or two losses in 3 years; F half or more with ≥3. They are printed here so you can check any letter yourself.