1031 exchange investors may find suitable replacement property in the form of Tenants in Common (TIC) ownership. Tenants in Common offerings are often pre-arranged with financing allowing for a simpler and faster closing of 1031 exchange replacement property. The acronym “TIC”, which stands for tenancy in common and tenants in common, refers to arrangements under which two or more people co-own a parcel of real estate without a “right of survivorship”.
Potential Benefits of TIC investments include:
- Potential for Greater Cash Flow
Most Tenancy in Common offerings have a projected cash flow based on the anticipated rental income less expenses. This could be a higher net cash flow than you currently receive on your rental property. As with all real estate the income cannot be guaranteed because the rental income and expenses can increase or decrease unexpectedly.
- Larger Properties
Access to Institutional Grade properties which are typically larger commercial properties that previously required significant capital to purchase.
Investors can select multiple Tenants in Common properties as part of their 1031 exchange allowing diversification of asset classes, cities and level of needed non-recourse debt.
- Minimal Investments
Tenants in Common have minimum investments as low as $100,000 – $300,000 of equity which allows investors to diversify. If you require a lower investment amount, let your Corcapa representative know and we may be able to negotiate a reduction in certain circumstances.
- Non-Recourse Loans
Virtually all the loans within the Tenant in Common (TIC) that are approved by DAI Securities, LLC are non-recourse which means the investor does not personally guarantee them.
- Financing Access
Easier access to financing for investors needing debt on their replacement property.
- Lower Risk
Investors like the pre arranged TIC programs so that some of their 1031 risk is removed.
Click here to learn more about Tenants in Common (TIC) investments and 1031 tax deferred exchanges.