Where are the Real Estate TICs?
A TIC has become increasingly common in 1031 tax-deferred exchanges since the IRS clarified in 2002 that fee-simple, fractional interests are eligible for use. TICs are technically real estate; however, during their peak in 2003-2007, they were predominantly sold as securities. The fact remains, however, that many TIC sponsors sold their TIC properties as real estate during that period. Investors who purchase fractional interests in an entire property receive their warranty deed in this format of tenant-in-common ownership. The average person can enjoy the right of an institutional-grade property with a minimum investment through TICs. It is possible to own multiple TIC Properties with a minimum investment of $50,000, offering maximum diversification. Investment real estate ownership is made more accessible for passive investors with TIC properties. The advantage of real estate TICs is that non-accredited investors can invest in them.
Are You Looking For TIC Properties?
TIC Properties exceptionally well serve real estate investors participating in 1031 exchanges. Many national and regional tenants at TIC Properties, such as Walgreens, AutoZone, and Dollar General, provide a secure monthly income with no management duties or expenses. TIC property owners share any income or appreciation enjoyed by their neighbors. It is still possible to find firms that provide these investments in 2018 for 1031 and cash investors.
Process for TIC property purchases
- Your 1031 intermediary should identify one or more TIC properties
- TIC purchases require signed documents
- You should instruct your 1031 intermediary to wire funds to you
- Warranty deeds record your ownership percentage
- You receive your income directly into your bank account each month
Income from passive sources
Passive investing in real estate has its downsides. Investors become less willing to deal with hassles, moving parts, and market fluctuations as they approach retirement. Instead of them working for real estate, they want it to work for them. To reap the benefits of passive income from these properties, a person must give up some control. It can be challenging for some people. When considering your objectives, you might ask yourself, “Am I the owner of the property, or is the property the owner of me?”
In most cases, investors are willing to give up control when considering their lifestyle. Receiving passive income can be as easy as giving up day-to-day management headaches, ongoing decision-making, and unexpected expenses. TIC Property owners receive their prorated rent directly in their bank accounts. When you receive passive income, you can be anything but passive – you can spend your time doing what matters!
Have Questions?
Wherever you are in your 1031 process, our advisors are here to help – no spam and no strings attached.