The purchase of a TIC ownership interest may solve many of the issues involved in successfully completing a §1031 Exchange. It is often difficult, in the short 45 day time frame, to locate a property that has the right purchase price and debt ratio and to then arrange for any financing that may be required and close in a timely manner. TIC advantages include:

• Investment can often be diversified into more than one property
• Can be identified & closed in a timely manner
• Pre-arranged, usually non-recourse, financing
• Potential increased after-tax cash flow
• No active management hassles
• Economies of scale

With a TIC §1031 Exchange, you no longer have to feel burdened by your real estate. Through your management contract, a manager will be retained to manage the asset while you enjoy all the benefits of income property ownership - with no property management duties.

Your income from the replacement property may be higher than what was being received from the original property. You can potentially earn cash flow that may be up to 60% sheltered by the depreciation of the new basis in your TIC purchase.

Tenant-in-common offerings typically begin with a cash-on-cash return of approximately 7% to 8%. Of course, this is real estate, so the cash flow can fluctuate, up or down, based on many factors including, but not limited to, changes in tenant occupancy, expenses, market conditions and environmental issues.

Risks Associated With Tenant-In-Common Investments

Remember, all investments carry an element of risk. §1031 offerings have the usual risks of most real estate transactions; such as, possible loss of principal, economic risk due to vacancy rates, risk of default if unable to make payments on leveraged properties, or potential lack of geographic diversification among others.