Real Estate Investments - TICs

911skb · 03-21-2006, 01:13 PM

HardDrive's question about Rental Property Financing, got me thinking.

Has any one here been involved in Tenants In Common (TICs) investment properties/programs? From my limited knowledge, you basically give a company X amount of $$ and specify whether you want to buy into apartments, hotels, business office space, etc. Then you should see a return on that investment and can sell your shares anytime.

If so, what experiences, returns and opinions do you have?

turbo6bar · 03-21-2006, 01:22 PM

I've heard you can do a 1031 exchange into TIC. If that is true, it has great potential. Sorry, I don't have any experience in this area.

I saw a blurb on CNBC about REITs currently being overvalued. It wasn't very long ago that REITs were proported to be immune to a RE bubble. Now, it is possible there will be some downside. It is not unreasonable to believe such downside could extend to TICs. That's my speculation.
regards,
jurgen

911skb · 03-21-2006, 07:20 PM

Jurgen,
Yeah, I've heard that you can do a 1031 exchange into a TIC. It sounds like a good way to get out of the "hands on" real estate investment game and into a hands off real estate play.

I've heard that you can pick and choose what types of properties you want your money invested in and where geographically. Seems to give some sense of control on being able to do your own research and find something that fits your desires.

Any one with direct experience in TICs?

Scooter · 08:05 PM

Yes, you can 1031 into a TIC. Unlike other real estate investments where you invest in an entity that owns a property, you actually own a piece of the real estate with a TIC, hence meeting the "like-kind exchange" requirement. TICs are normally sold through an investment broker, not a real estate broker. It is considered (by most) to be a security, not real estate. By the time it gets offered to the public, it should be heavily scrutinized by the broker, because the broker's reputation is at stake. It can be a great investment for investors who don't want to deal with the everyday headaches of being a landlord, but like the appreciation of real property while receiving income from renters.

Oh, and most TICs are large commercial buildings. A TIC allows the average (wealthy) person to own a piece of a more substantial building, which in turn shares the risk.