TIC Ownership via a 1031 Exchange provide investors with the best of both worlds:

Passive ownership in institutional grade properties with

Effective capital gains tax deferral.

 

Pros of TIC Ownership

 

Passive Management

TIC investments provide simplicity by eliminating many of the headaches associated with active management. Investors who are ready to relinquish the day-to-day burdens of being a landlord, or who own land and would like an income-producing property, may benefit from TIC investments.

 

Asset Diversification

TIC investments allow an Investor the ability, through minimum equity requirements as low as $200,000, to diversify their 1031 Exchange into multiple properties in multiple markets.

 

Cash Flow

Cash flow from operations is generally paid monthly and in most cases, a portion of the Investor's net income is tax-deferred via depreciation-pass-through.

 

Institutional Quality Properties

Investors are able to own fractional interests in institutional quality properties that may be too expensive to buy on their own.

 

 

Cons of TIC Ownership

 

Exposure to Real Estate Markets

TIC investments are direct investments in real estate and are subject to all of the risks of owning, operating and disposing of real estate.

Results from investing in real estate vary through cyclical economic times.

 

Liquidity

Owning fractional interests in real estate may add to the illiquidity of the investment. As of today, there is no estab­lished secondary market for the resale of TIC interests.

 

Higher Costs than Private, Sole Ownership Real Estate Purchases

The cost to acquire TIC interests may be higher than purchasing an entire property outright due to the additional expenses of making the property available to multiple co-owners and marketing it in the form of a private security offering.

 

Accreditation Required

TIC investments may not be suitable for all 1031 Exchange Investors and are only available to accredited Investors.