What is Tenants-in-Common Property?
Tenant-in-Common (TIC) is a form of ownership that allows for an investor to own an undivided fractional interest in a larger property, similar to that of the Delaware Statutory Trust, but with less restrictions and parameters placed on the property as outlined in our FREE downloadable guide, “Investing in Delaware Statutory Trusts”. 1031 Exchange TIC Properties are worth considering for accredited* investors who are more interested in potential appreciation through a value-add property as opposed to current income and diversification. Investment minimums for Custom 1031 Exchange TIC Properties are generally $1M.
How Does It Work?
We work with several real estate firms who structure and allow investors to exchange into Custom 1031 Tenants-in-Common properties. Generally, these properties are value-add in nature and will either substantially improve a property following an acquisition, redevelop the property, or work through renegotiating leases. Often, the number of investors allowed in a 1031 TIC is limited. Also, one investor may be a fund, owned and operated by the parent real estate firm. Custom TIC properties differ from one another in terms of the property type acquired and investment thesis of the real estate firm managing the TIC.
Benefits of Tenants-in-Common Property
Custom Tenant-in-Common Properties can present a tremendous opportunity to utilize Exchange dollars to acquire a fractional interest in a larger property and gain access to the skills and expertise of sophisticated, opportunistic national real estate firms. The firms we work with hold extensive track records that consist of opportunistic and value-add acquisitions. Generally, they co-invest both their managed funds’ capital and principles’ capital alongside our clients, aligning their interests throughout the duration of the investment. Custom 1031 Tenants-in-Common Properties tend to have a higher investment minimum but are an option worth considering for investors looking for a shorter investment timeline, refinance opportunities, and greater potential appreciation.