cing or selling the property. Some co-owners may wish to hold a property that’s producing solid cash flow, while some may want to exit and take the gains while a particular market is hot. This can potentially create conflicts.

2. Il-liquidity – By their very nature, TICs are il-liquid investments. Because

An alternative for traditional replacement property in a §1031 exchange becoming increasingly popular is the use of Tenants-In-Common (TIC) offerings. Developed circa 1994, the TIC structure is a tool used between investors as a way of joining funds for the purchase of investment property. This helps smaller investors through economies of scale in nationally diverse markets that may have been otherwise unreachable.

Professional real estate companies soon learned the value a TIC can offer to investors. Approximately 7 companies (also referred to as ‘sponsors’) offered this alternative of TICs to investors from 1997-2000. Through the industry’s explosive growth in the past 3-4 years, 60+ sponsors now offer TICs. The amount of TIC business has doubled each year for the past 4 years. With such growth, also come challenges.

When is a TIC right for you? Although, there are many benefits for co-ownership in a Tenant-In-Common, there are also some items we’d like to address that may not be considered on a frequent enough basis:

1. Co-ownership Provisions - By the rules set forth in most TIC agreements, majority or unanimous voting by co-owners will decide major financial decisions such as re-financing, obtaining additional financing or selling the property. Some co-owners may wish to hold a property that’s producing solid cash flow, while some may want to exit and take the gains while a particular market is hot. This can potentially create conflicts.

2. Il-liquidity – By their very nature, TICs are il-liquid investments. Because a

stors through economies of scale in nationally diverse markets that may have been otherwise unreachable.

Professional real estate companies soon learned the value a TIC can offer to investors. Approximately 7 companies (also referred to as ‘sponsors’) offered this alternative of TICs to investors from 1997-2000. Through the industry’s explosive growth in the past 3-4 years, 60+ sponsors now offer TICs. The amount of TIC business has doubled each year for the past 4 years. With such growth, also come challenges.

When is a TIC right for you? Although, there are many benefits for co-ownership in a Tenant-In-Common, there are also some items we’d like to address that may not be considered on a frequent enough basis:

1. Co-ownership Provisions - By the rules set forth in most TIC agreements, majority or unanimous voting by co-owners will decide major financial decisions such as re-financing, obtaining additional financing or selling the property. Some co-owners may wish to hold a property that’s producing solid cash flow, while some may want to exit and take the gains while a particular market is hot. This can potentially create conflicts.

2. Il-liquidity – By their very nature, TICs are il-liquid investments. Because

000. Through the industry’s explosive growth in the past 3-4 years, 60+ sponsors now offer TICs. The amount of TIC business has doubled each year for the past 4 years. With such growth, also come challenges.

When is a TIC right for you? Although, there are many benefits for co-ownership in a Tenant-In-Common, there are also some items we’d like to address that may not be considered on a frequent enough basis:

1. Co-ownership Provisions - By the rules set forth in most TIC agreements, majority or unanimous voting by co-owners will decide major financial decisions such as re-financing, obtaining additional financing or selling the property. Some co-owners may wish to hold a property that’s producing solid cash flow, while some may want to exit and take the gains while a particular market is hot. This can potentially create conflicts.

2. Il-liquidity – By their very nature, TICs are il-liquid investments. Because

on, there are also some items we’d like to address that may not be considered on a frequent enough basis:

1. Co-ownership Provisions - By the rules set forth in most TIC agreements, majority or unanimous voting by co-owners will decide major financial decisions such as re-financing, obtaining additional financing or selling the property. Some co-owners may wish to hold a property that’s producing solid cash flow, while some may want to exit and take the gains while a particular market is hot. This can potentially create conflicts.

2. Il-liquidity – By their very nature, TICs are il-liquid investments. Because

cing or selling the property. Some co-owners may wish to hold a property that’s producing solid cash flow, while some may want to exit and take the gains while a particular market is hot. This can potentially create conflicts.

2. Il-liquidity – By their very nature, TICs are il-liquid investments. Because a secondary market does not yet exist for TICs, buying the property right is extremely critical. Defined exit strategies are seldom seen in this industry, and sometimes for good reason. Predicting future market patterns are difficult and even impossible at times. Even though they’ve recently sold faster, seven to ten years are typical projected hold periods in TICs.

3. Passive Management – Albeit a passive management role is a benefit to most investors, the property’s ability to perform on a daily basis is now the responsibility of the management company. Without proper management, an excellent property can become a poor producer in a matter of months. Some sponsors manage the properties themselves, some use 3rd party management companies. Some TIC sponsors retain interests as a co-owner themselves aligning their desires for the property to perform well with that of the investors. We personally encourage this type of alignment with the investors so that everyone has a vested interest.

4. Syndication Markups – Typical costs are inherent regardless of the real estate transaction (i.e. closing costs, lender & legal fees, etc.). However, additional “loads” are applied to TIC offerings for the sponsors and selling groups. Understa