|  What are 1031 TIC Exchanges?
1031 TIC - A Primer
TIC FAQ's
Tenants in Common Defined
Articles
Qualified Intermediary
Rules for Identification
TIC Risk Consideration
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WHAT IS TENANT-IN-COMMON OWNERSHIP?
TIC fractional ownership is the co-ownership of a property by two or more investors. Each TIC
investor owns an undivided fractional interest in real estate and receives a proportionate share of
net income, tax benefit, losses and appreciation. Essentially, a TIC investor has many of the same
rights, benefits and risks as a single owner of the property, but their share in the property is equal
to the percentage of their equity participation. Title to the investment property is held by each
TIC investor and each investor receives a deed for their ownership percentage. TIC ownership
programs can involve up to 35 TIC investors.
Most TIC ownership programs consist of commercial properties, such as apartments, industrial
properties, office buildings, shopping centers and warehouse/distribution properties ranging from
$5 million to over $100 million in value. For many real estate investors who have “done it
themselves,” they have never had access to these types of commercial properties that have
historically been accessible only by pension funds, insurance companies, and other large institutional
investors, due to the overall value of the property.
The minimum investment varies depending on the type of property, the total amount of equity
being raised, and the number of TIC investors. Although there is no standard minimum
investment, some TIC investments start at $200,000 and can accommodate $20,000,000 or more
per individual investor. In most TIC ownership programs, the provider makes the day-to-day
decisions allowed under the management agreement or master lease. TIC investors make the
major decisions such as approving or rejecting leases, refinancing, or potential sales. Majority
approval by the investors is required for major decisions relating to the property. In short, TIC
investors make the big decisions regarding the property while a professional management team
handles the day-to-day activities and management of the property.
Source
Asset Preservation, Inc., www.apiexchange.com
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