Tenant in Common Investments - TIC

As investors mature, the desire to spend time on family, fun, travel and other pursuits increases.  The investor needs to answer the following question, "Do I want to manage property anymore or do I want to delegate the day-to-day management to professionals?" The Tenancy In Common structure allows the investor to have professional property managers take care of the mundane tasks of collecting rent, performing maintenance, etc., while still participating in the major decisions.

Tenant-in-common programs have exploded in popularity since the Internal Revenue Service gave them its blessing in 2002. The programs raised about $756.1 million in equity in 2003, up from about $166.7 million in 2001. The industry is expected to raise about $1.9 billion in equity in 2005 per the Wall Street Journal. 

TIC is an alternative to sole ownership of real estate. It is an investment in a single large commercial property by multiple owners, not as limited partners or as an entity, but as individual owners. Each owner receives an individual deed at closing for his or her undivided percentage interest in the entire property. This form of ownership is known as co-tenancy or tenants-in-common ("TIC").  A TIC is not a partnership, and it is not a joint venture.  A TIC is more like a CO-OP where a "operating agreement" or "management agreement" links co-owners together.

A TIC Replacement Property enables the average investor to participate in an echelon of real estate previously reserved for large institutional investors. TIC Replacement Properties are chosen because they provide credit-worthy tenants, secure monthly income, stability and growth potential. Investing in a TIC Replacement Property provides passive long-term income, eliminates active property management and alleviates the burden of being a landlord.  Now the average person can own property leased to a Fortune 500 company, a national or regional retailer or the United States Government. 

Investors may even find that they can enjoy greater cash flow and appreciation return potential with a TIC than they are currently receiving from their existing real estate investments.

Although you obviously give up the ability and flexibility to make the sole decisions about management and ownership strategies (such as debt ratios and lease renegotiations) that you would have in individually owned properties, TIC ownership does have some benefits

Some of the benefits of TIC properties

• Access to Higher Grade Properties
• Professionally Managed
• No property management headaches for the investor. 
• Pre-arranged Non-recourse Financing
• Lower minimum investment requirements.
• Diversification potential
• Separate Deeded Interest
• Monthly rental payments
• Sale proceeds (appreciation) and depreciation tax benefits are allocated by percentage ownership
• Defer capital gains tax and depreciation recapture via section 1031 exchanges
• Increases the certainty of closing on your replacement property and completing your 1031 exchange.
• Potential to match your 1031 equity exchange dollar requirements.

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Securities offered through Empire Securities, member FINRA, SIPC.

• For Informational Use Only.  This is neither an offer to sell nor a solicitation to buy any security.  These products do contain a risk of the loss of principal and they are NOT covered by SIPC.  Investments are subject to various risks such as illiquidity, adverse economic conditions and adverse market conditions. May not be suitable for all investors. Accredited investors only.  Past performance does not guarantee future results