What is a TIC investment property?

By
Commercial Real Estate Agent

Tenant-in-Common real estate investments offer investors the opportunity to share in the ownership of large properties such as shopping malls, office buildings, and housing developments, as well as multi-million dollar industrial complexes. This investment structure is designed to allow you to invest in institutional quality real estate without having to buy the entire property. Differing goals can be accomplished by using this method such as a steady stream of income or aggressive appreciation depending on the product.

According to IRS guidelines, no more than 35 investors may take part in a TIC property. TIC investors have a fractional deeded interest in a larger property which is professionally managed. Monthly payments are made to each investor according to his initial equity along with regular reports as to the performance of the property.

When you invest in a TIC property, you reap the benefits of ownership. Rather than buying the right to use a property, as you would in a time-share agreement, you're buying a portion of the deed. As a property owner, you're entitled to income, appreciation and tax benefits. You can also sell your share, or pass the property on in a will.

Tenant-in-Common properties are often sold out in a matter of days, if not hours. This highly desirable and low-maintenance investment opportunity is attractive to a variety of different investors. If you want to gain the competitive edge, or find a property fast, you need to work with a company that has the right connections.

If you'd like more information on TIC properties or further details on possible structuring don't hesitate to contact me via my website.  WWW.SOUNDADVISORS.NET

Ryan Haddock

Comments (5)

Richard Perkins
R PERKINS REALTY - Stockton, CA

Very good stuff. Good info Thanks for the post and keep up the good work

Nov 15, 2007 08:14 AM
Bill Exeter
Exeter 1031 Exchange Services, LLC - San Diego, CA
1031 Tax-Deferred Exchange Expert

Hi Ryan,

So true!  The TIC investment may also allow an investor's estate to discount the value of the TIC investment for estate tax purposes because they are only a minority interest holder.  We have had a number of clients complete 1031 exchanges into TIC interests specifically for estate tax planning purposes. 

Dec 12, 2007 02:28 PM
Brad Whiteman
Coldwell Banker - New Haven, CT
Brad Whiteman
Is this a syndication or does it differ? I'll check out your site as well.
Dec 16, 2007 02:10 AM
Sandy Nelson
Riley Jackson Real Estate Inc. - Olympia, WA
your Olympia area Realtor

Ryan,

Would TICs also work for residential properties and how difficult are they to set up?

Sandy

Dec 21, 2007 02:14 AM
Abe Do
Olympia, WA

Sandy -  Yes it would work in residential, although it would take the right transaction to allow it to cashflow.  Often times you find TIC properties in vacation spots such as Hawaii where 5-10 families own a home and take turns in either renting it or using it themselves.

The real difference with the commercial properties is it is professionally managed and in place - and those management companies do pay brokers for their part in the transaction.  Instead of using my $150K for a $1M dollar property I just end up using my $150K for a 5% share of a $6M property that gains a 6-7% rate of return. 

Many people use this for 1031 purposes if they are having trouble identifying property and then when they do find the property they are looking for can do a reverse exchange out of it.

Dec 21, 2007 02:23 AM

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