In the past, investors with small amounts of equity tend to limit their investments in single residences, duplexes, small apartments, etc.  With the recent development of Tenants-in-Common (TIC) structure, the sky is the limit for these investors.  The investors can now participate in the ownership of large commercial buildings, shopping centers, etc., with some including established national brand tenants such as, for example, Old Navy, McDonald's, T-J-Maxx, Pier 1 Imports, Lowe's, etc.  There are many advantages to the TIC structure that make it very attractive to the real estate investors.  Following are some of these advantages:

Higher Return on Investment

Most Tenant-in-Common owners may receive guaranteed returns between 7 and 9% on their purchased equity with yearly increases, higher sometimes than what they were receiving on their other property.

Access to Higher Grade Properties

The Tenants-in-Common buyer may be able to purchase strong, high grade properties that previously were available only to the largest of real estate buyers. These properties are able to attract high credit tenants and provide stable and reliable income and growth potential.

Combined Real Estate Experience

Each of the Tenants-in-Common may bring their previous real estate knowledge to the group. Thus, each decision of the Tenants-in-Common group will be backed by many years of real estate experience.

Professional management

Professional management in place to run the day to day operations. Tenants-in-Common only get involved for major decisions.

Diversification

Tenants-in-Common buyers may decrease risk by diversifying into different properties in various different marketplaces with different property mixes such as retail, office or residential.

Low Minimums

Revenue Procedure 2002-22 issued by the IRS allows up to 35 Tenants-in-Common in any one property. Most minimum purchase requirements are structured to meet this 35 Tenants-in-Common limitation and participation can range as low as $100,000 equity.

Exact Dollar Matching

With a Tenants-in-Common property, you can purchase any amount above the minimum. For example, if you have $146,749 of equity from the sale of a previous property you can purchase $146,749 of equity in a Tenants-in-Common property.

Deeded Interest

The Tenants-in-Common may own the property and receive a deeded interest which is transferable by gift, sale, inheritance, assignment, etc. Such transfer does not need to coincide with the transfer of all Tenants-in-Common interests in the property just their interest in the property.

No Special Allocations

All the Tenants-in-Common may receive lease payments, sale proceeds, and the depreciation tax benefits in proportion equal to their percentage ownership in the property.

No Closing Costs

Most Tenant-in-Common interests may be acquired with $0 closing costs.

Guaranteed Financing

Most Tenant-in-Common interests may come with guaranteed financing with no points.

Fast Closings

Tenant-in-Common interests may be closed within days of signing the purchase and sale, to meet the 180 day completion rule of a 1031 exchange.  Tenants-in-Common may be a great alternative in satisfying the 45 days identification period, especially when the identification period is reaching the end, and there is no other suitable properties available in the market.

*** This information is provided as a courtesy of Equity 1031, LLC to help the investors become aware of the available investment options.  Equity 1031, LLC does not advise or sell these investments.  Before participating in any investments, it is suggested that the investors should perform necessary due deligence including consultation with own attorneys, tax accountants, and investment advisors.