1031 Exchanges

 

Investment Real Estate Options
You Don’t Know About
With $100,000.00 or More ? TICs ? REITs ? Income Funds
Become Attractive

Did you know you could simplify investment real estate to provide you the benefits of owning real estate but without all the hassles. Specifically there are areas that provide “hands-off” real estate investments for our clients.

 
Fractional Ownership – Code Section 1031 Tenant in Common Exchange Properties (TIC’s):
 
 
 
Fractional ownership in a specific piece of property has become extremely popular for those wishing to complete a tax deferred 1031 Exchange, or those wanting to invest in one piece of real estate. The investor holds physical title to a fraction of the real estate deed as opposed to ownership in an entity such as a REIT or partnership. Most of these TIC properties are designed to be held five to seven years. The structure allows owners the ability to sell their investment real estate, perhaps one that they have been actively managing for years, and exchange the proceeds into a professionally managed institutional grade property. Owners get the benefit of all future appreciation, monthly cash flow, quality tenants, and pre-arranged financing to comply with the IRS regulations of a 1031 exchange. These high quality, income producing properties can also be purchased by real estate investors not completing a 1031 exchange. Consequently, anyone desiring to acquire quality real estate can purchase a TIC interest.
 
 
 
Whether trying to complete a 1031 Exchange or just desiring to invest more funds into real estate without the hassle of tenants, these are excellent options available.
 
In all these structures you are relying on the expertise of national institutional property managers to identify the property, perform due diligence, purchase, finance, manage and position the property (s) for a profitable sale.
 

 

The risks of a TIC investment include:

Purchasers will be required to rely on a third party manager to operate the property purchased.

The sponsors and manager of the real estate purchased may have conflicts of interest that can adversely affect an investor.

TIC interests are generally illiquid.

Tenants can default, which may reduce cash flow to investors.

The selling prices for properties often are not the result of arm’s length negotiations.

TIC interests are not diversified, so investors are more exposed to risk of decline in real estate values of a single building, a single type of building, or a single geographical area.

 

*Always consult your tax advisor before making any investment related decisions.

                                                                                                               
 
For more information on 1031 Exchanges please call (810)664-1326