TIC investments provide simplicity by eliminating active property management headaches. Individuals who are tired of the day-to-day burdens of being a landlord or who own land and would like an income producing property will appreciate the following benefits of a TIC investment:

• Cash flow is generally paid monthly and portions can be tax-sheltered via depreciation pass through and interest deductions. You may also share in the appreciation of the property when sold.
• Minimum equity requirements as low as $100,000 allow you to invest in multiple high quality, institutional grade properties.
• National real estate companies that structure these TIC programs acquire (identify and locate, evaluate, arrange financing, etc.), manage (maintain, lease, collect rent, service mortgage), and sell the TIC properties. They have a vested interest in the performance of the property. These companies usually have strong track records and extensive experience in various sectors, types, and locations of real estate.
• TIC investments enable you to replace your exact amount of equity and debt (when applicable) from your relinquished property for your 1031 exchange. In a TIC transaction, accredited investors assume non-recourse (no personal guarantee) financing on the TIC property. Debt on TIC offerings can range from zero debt up to 75% leveraged.
• TIC investments allow you to 1031 exchange your exact equity amount, investors can avoid paying taxes on boot when you cannot replace your TOTAL equity amount in a traditional replacement property.

Welton Street’s ready inventory of TIC properties allows investors to easily identify TIC properties within the 45-day identification period, close within 180 days and select TIC investments that meet their equity and debt replacement requirements.

Considerations When Reviewing TIC Investments

TICs are complex investments and may not be suitable for all investors. TICs are only available to accredited investors as defined by Regulation D of the Securities Act of 1933. Welton Street will help determine if you meet these requirements. Even if you do qualify as an accredited investor, a TIC may not be suitable based on your risk tolerance and investment time horizon.

TICs have long-term holding periods, limited liquidity and no active secondary market for the sale of TIC interests. This could impact your ability to access your investment. In addition, TICs have unique fees and expenses including sales loads that are different from other real estate investments. These fees could impact cash flow rates and investment returns.

As well, TICs are subject to risks similar to other real estate investments such as fluctuations in value due to changes in occupancy rates and economic factors. Although rare, TIC owners could potentially face capital calls on the investment. Prior to making an investment decision, investors should review the Private Placement Memorandum for information on fees, expenses and risks particular to the specific TIC.

So having read all this, would a TIC make sense for you? Call me or email me and I'll mail you a copy of Investor Guide, a brochure that explains IRS tax deferred 1031 exchanges and Tenant in Common investments.