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Tenants-In-Common (TIC) Ownership
Tenants-In-Common (TIC) programs, also known as fractional-ownership programs, provide the ability for investors to buy partial interests in a property as an alternative to having to buy the entire property.

TICs offer many advantages to the investor. TICs can provide a way of owning institutional grade real estate with attractive income and appreciation potential at a price the investor can tailor to their individual needs. Investors with limited funds can also diversify with TIC ownership's amongst different investment categories (Office, Retail, Multi-family, etc) and in different geographical markets. This is especially helpful if your local market does not have anyh purchabable inventory of NNN, Long term leased up, Class A properties. A TIC replacement property can enable the average investor buyer to participate in an echelon of real estate previously reserved for institutional investors.

Typically, day-to-day management of the TIC property is handled by a professional management company and owners receive a monthly distribution check. TIC owners are eligible for the full benefits of real estate ownership, receiving a pro-rata share of income, tax benefits and appreciation.
TICs and 1031 Exchanges

TICs have become popular since March 19, 2002 when IRS Revenue Procedure 2002-22 was issued. This Revenue Procedure provided IRS guidelines for the use of TICs in 1031 real estate exchanges. TIC sponsors associated with CapSeven.com are very familiar with the Revenue Procedure and the 1031 processes. These TIC sponsors offer Instituitional Grade, Class A properties throughout the country that have met the guidelines and can be used for exchanges.  Be Careful!  Many TIC properties are sold as securities.  They do not qualify as property eligible for capital gains deferrals under IRS rules.
Things To Consider When Investing In TIC properties

As with other real estate investments, TIC purchasers need to perform due diligence. Our affiliated TIC Sponsors facilitate this process with voluminous property information packages covering a large number of subjects including income, operating expenses, demographics of the area, vacancies, leases and their terms, long term appreciation trends of the area, local taxes and utility issues and many other items that should be carefully read and understood.

As with any investment, liquidity is an important consideration.  Unlike other fractional ownership interests where all that is owned is the right to use for a specific period of time (time shares for example), TICs represent direct deeded ownership and control of a real estate asset which provides the TIC owner with the property's true market value. The property can be sold or encumbered without the consent of all the other fractional owners. The tranaction documents establishing the TICs typically allow other fractional owners first rights of refusal on a proposed sale of an individual's ownership interest.

TICs can provide a professionally managed, institutionally funded turn-key real estate solution that should be carefully evaluated and compared to other real estate investments for ease of acquisition, management and sale. These properties can be a very simple and profitable way to invest without the usual headaches of income property management..

In today’s market, quality TICs generally sell out within a few days. If you think the benefits of TIC ownership in some really outstanding properties throughout the nation might fit in with your investment or exchange needs or acquisition strategies, please allow us to register you with some of our TIC Real Estate sponsors.   There is no obligation or fee. For an explanation of the process please click here.
TIC 1031 Advantages
  • Access
    Now the average person can own property leased to a Fortune 500 Company, a national or regional retailer, or the United States Government.
  • Low Minimum Investment
    An estimated 40% of all 1031 exchanges involve capital amounts of $300,000 or less.  The price of admission into the triple-net lease market typically begins at $1,000,000, thereby locking many 1031 investors out of this arena.  However, TIC ownership is available for as little as $100,000, a smaller initial investment than would be needed for a single owner purchase..
  • Diversification and Safety
    In a typical 1031 exchange, the taxpayer will identify three potential replacement properties and subsequently purchase only one.  TIC ownership makes it economically feasible to identify and acquire ownership interest in multiple properties, thereby decreasing risk through diversification. These institutional grade, class A properties are available throughout the country and across a wide range of types.
  • Flexibility
    By identifying a TIC property as one of the replacement property choices, the taxpayer's entire proceeds can be applied to the TIC property if the other choices fall through.  In addition, if there is money left unspent after another closing, the taxpayer can invest the "spill-over" money in the TIC property.
  • Decreased Tax Risk
    Because an investment position in a TIC property can be reserved for a period of time after the identification period, the potential for paying capital gains tax because of a collapsed deal is decreased.
  • Existing Financing
    Typically, TIC properties already have non-recourse financing in place and can be assumed without qualification or loan assumption fees. This characteristic is extremely important if you are moving up but stretched sufficiently to limit the quality of your targeted acquisitions.
  • Speed
    A TIC closing can take place within days of identification, eliminating the negotiation process, the loan qualification process, the credit checks, and the appraisal work.
  • Liquidity
    By maintaining a secondary market of TIC ownership interests, new investors can select seasoned properties and existing owners can liquidate their partial ownership interests quicker than the normal real estate sale process.
  • Simplicity
    A TIC investor receives a monthly check without the bother of day-to-day property management.  Typically, day-to-day management of the property is handled by a professional management company agreed to by the owners and the owners receive a monthly distribution check.   TIC owners are eligible for the full benefits of real estate ownership, receiving a pro-rata share of income, tax benefits and appreciation upon financing or sale.
  • Safety
    Class A TIC properties attract tenants with greater financial strength and stability than is usually found with older, lower valued, or pooerly situated properties. Tenants include many major corporations, retail chains, government entities, or are situated in the nation's leading growth and progress locales.
  • 1031 Exchanges
    TICs as 1031 real estate exchange properties may enable you to defer the capital gains taxes that would be normally due on the proceeds from the sale of your current investment property. To purchase TIC interests as real property, the IRS requires that you possess substantial prior hands-on experience in owning and operating developed, income producing real estate.  Additionally, you must be competent to, and intend to, exercise your ownership control rights with regard to any tenant-in-common property that you may purchase.  Utilizing funds from a 1031 exchange to purchase a TIC share of qualifying property usually satisfies these IRS requirements.

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