Kay Properties Review 2026: FINRA Record and the Cove DSTs

What Kay Properties is, according to the regulators

Search FINRA BrokerCheck for "Kay Properties" and nothing comes back. That is not a red flag in itself: Kay Properties & Investments, LLC is a marketing and advisory brand, and the people who sell are registered representatives of an outside broker-dealer. The company's own pages say so in the footer: “Securities offered through FNEX Capital, member FINRA, SIPC.” Kay says it typically lists 20 to 40 DST offerings from many sponsors, that its team “has participated in over $30 billion dollars” of DST investments, and that clients have exchanged into over 9,100 investments. Those are the company's figures; no filing we can read confirms or contradicts them.

Source: FINRA BrokerCheck reports and search results read October 9, 2026; kpi1031.com read the same day. The WealthForge and Growth Capital Services events are firm-level and do not name Kay.

FNEX's relationship summary (Form CRS, June 8, 2026) describes the business plainly: FNEX recommends “private, unregistered securities, such as Delaware Statutory Trusts (DSTs)”, does not hold client assets, and is paid by the issuers as a placement agent. It also states the conflict that matters most for this review: “Certain FNEX registered representatives are owners, principals, managers, and/or employees of sponsors of the products we sell.”

Cove Capital: the sponsor in the same building

The two people at the top of Kay's team page are Dwight Kay, “CEO and Founder”, and Chay Lapin, “President”. Their BrokerCheck reports list the other business they run. Dwight Kay: co-founder and managing member of Cove Capital Investments, LLC since July 1, 2018, 100 hours a month, alongside 160 hours a month at Kay. Chay Lapin: “50% owner and a managing partner” of Cove since February 2, 2018, described as a “sponsor and join venture sponsor of real estate securities offerings”. Cove's recent Form Ds give the issuer's address as 2958 Columbia Street, Torrance, the same street address as the FNEX branch where Dwight Kay is registered.

Cove's DSTs are sold through the same channel. On every one of the 85 Cove offerings we found, the only sales compensation recipient on the Form D is FNEX Capital (76) or, for nine 2021 filings, Growth Capital Services, the broker-dealer Kay's principals were with at the time. Recent filings describe Dwight Kay as a managing member of the offering who “is registered with FNEX Capital, an SEC registered FINRA Member broker-dealer.”

None of this is hidden, and sponsor-owned distribution is legal and common (Passco, for one, sells its DSTs through its own broker-dealer, as our Passco review shows). What it means for you is simple: when a Kay representative shows you a Cove DST, the person across the table may be selling a product their own firm's principals sponsor and are paid from. Ask whether an offering is Cove's before you compare it with third-party DSTs on the menu.

What 85 Cove Form Ds say: size, sales and the load

Source: SEC Form D data sets 2021Q1-2026Q1 and 12 Form Ds filed April-September 2026 read on EDGAR; latest filing per issuer; sums and medians are our arithmetic. Commission % = Item 15 sales commissions ÷ total offering amount.

Four things stand out.

• The commission doubled. Cove Houston Corporate 49 DST (2021-2022) shows $800,847 of sales commissions on a $26,694,913 offering, 3.0%. Waynesboro VA Ecommerce 126 DST (filed September 23, 2026) shows $813,131 on $13,552,181, 6.0% (our arithmetic). On a $1,000,000 exchange that is $30,000 then and $60,000 now. The 30 third-party DSTs and funds where a Kay-office representative appears on the Form D have a median of 9.1%, so Cove is still cheaper on this line; it is not the whole load.
• There is a second line, and the principals are paid from it. Item 16 (payments to the people named as officers and promoters) has a median of 10.3% of the offering. On Essential Net Lease Industrial 114 DST it is $1,317,806 on a $12,126,736 offering, with the clarification: “Mr Kay & Lapin will receive a portion of this amount (in)directly for various fees & selling commissions”. The filings do not split it, and it may overlap with Item 15, so do not add the two. Ask for the memorandum's use-of-proceeds table.
• The minimum is $1,000 on all 85. Our DST market data puts the median DST minimum at $100,000 in 2025 and 2026. All 85 use Rule 506(c), so buyers must be verified accredited investors.
• The sold figures are a floor. 59 of the 85 Form Ds were never amended, and 9 still report no sale. The largest reported raises are Cove Houston Corporate 49 DST ($26.7 million from 85 investors) and Cove Net Lease Distribution 55 DST ($24.2 million from 111). The widest is Cove Net Lease Income Fund 18, LLC, with 166 investors and $23.5 million sold on its March 2024 amendment.

Two filings carry entries that cannot be right: Essential Net Lease Industrial 114 DST reports $7,276,040 of sales commissions on a $12,126,736 offering (60.0%), and Essential Montgomery Industrial 127 DST reports $8,354,402 of Item 16 payments on a $9,505,041 offering (87.9%). Both look like misplaced digits (6.0% and 8.8% would fit the series), but the SEC record says what it says. If you are offered either, ask for the corrected figure in writing.

The third-party DSTs that show Kay's office on the Form D

Most issuers list only the broker-dealer, so the Form D usually cannot tell you which DSTs Kay sold. Thirty can: their filings name an individual representative at Kay's Torrance addresses (2958 Columbia Street or 21515 Hawthorne Boulevard). They include Capital Square's CX DSTs, Griffin Capital's opportunity-zone funds, Net Lease Capital Advisors' DTW Air Cargo Logistics DST ($480.2 million sold), GSA CIS Camp Springs DST, Blue Owl Real Estate Exchange I DST, BREX Parker MF and BREX Briggs MF DSTs, and JWCM Vivian, DST. The amounts on those filings are for the whole offering, sold by many broker-dealers; Kay's share is not disclosed.

Source: latest Form D or D/A of each offering on EDGAR (accessions in the dataset); percentages are our arithmetic. A low Item 15 figure on the Net Lease Capital Advisors and Griffin filings does not mean a low load: those sponsors may pay selling costs through other lines.

What BrokerCheck shows for the two principals

Both principals are named executive officers on Cove's SEC filings, which is why we report their individual records. The matters below are customer disputes, not regulatory actions, and BrokerCheck itself warns that a settlement can be made “for certain business reasons” with no admission of wrongdoing.

Source: FINRA BrokerCheck detailed reports for CRD 5376903 and 6275140, read October 9, 2026.

In his statement on the largest settlement, Dwight Kay says he “never sold this investor any investment”, that the matter involved two student-housing investments hit by COVID-19, and that the settlement was “a cost-of-defense decision rather than an admission of liability.” Chay Lapin's statement on his settlement says it related to a Passco-sponsored investment. The investments in these three settled cases were made in 2018-2020 and are not identified as Cove offerings.

What a holder can do with this

• If you already own a Cove DST, look up its Form D on EDGAR (search the trust's name) and read Items 13, 15 and 16. If it was never amended, ask Cove for the final amount raised, the number of investors and the current distribution rate; the SEC record will not tell you.
• If a Kay representative is showing you DSTs, ask in writing which are Cove offerings, and ask for the same comparison of load (Item 15 plus the memorandum's full use-of-proceeds table) for each Cove and third-party option. A 6% commission plus a 10% related-person line is a different deal from a 9% commission with nothing else, and only the memorandum shows which is which. Our DST fee analysis explains the lines.
• Check the person, not the brand. Look up your own representative on BrokerCheck through FNEX Capital (CRD 166316); 5 of the 23 FNEX individuals at the Torrance branch carry a disclosure flag (our count).
• Watch the deadline. If you are inside a 1031 exchange, you have 45 days to identify and 180 to close (the rules). A $1,000 minimum and fast-filling small DSTs make Cove easy to use as a backstop; the speed is exactly when a second opinion is cheapest.

FAQ

All figures are from FINRA BrokerCheck (firm reports for FNEX Capital, WealthForge Securities and Growth Capital Services; individual reports for Dwight Kay and Chay Lapin; the FNEX individual search) and FNEX Capital's Form CRS of June 8, 2026, all read on October 9, 2026; the SEC's quarterly Form D data sets for 2021Q1 to 2026Q1 and 39 Form D filings read on EDGAR, including the 12 Cove filings of April to September 2026; and kpi1031.com's About Us and Meet Our Team pages read the same day. We identified Cove offerings by Dwight Kay's listing as a related person and Kay-office sales by recipient address, so an offering filed under another name or listing only the broker-dealer is missing. Sums, medians and percentages are our arithmetic. This is analysis of public documents, not investment, legal or tax advice.