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TIC Advantages
Fractional ownership provides the ability to diversify a 1031 Exchange into more than one property and to participate in potentially value oriented properties and other properties including institutional quality and residential properties. Thus, small investors in one area of the country may participate in unique value orientated properties, commercial, and residential investments with professional management.
- Ability to obtain value-priced real estate for a portfolio
- Eliminate the day-to-day burden of property management
- Diversified by property type
- Diversified tenant base
- Predictable income, often paid monthly
- Non-Recourse financing
- Flexible Dollar Investments, as low as $100,000
- May be easier to meet 45 Day I.D. Date
- Retain all advantages of ownership, depreciation and appreciation
TIC Disadvantages
- Accredited investors only, $1million net worth or $200,000 annual income-$300,000 jointly
- Possible lack of complete control
- Inability to refinance or increase Indebtedness
- Any sale of proportional interest must be approved by lender
- All owners must agree on "significant" issues, including sale of property
- If not structured properly, some reserve requirements may cause boot
- Cost or Fees, usually reflect two closings up front
>>Tenants in Common and 1031s
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