Real Life Example Of Why You Should Identify A TIC Property

Bobby, 71 years who has been recently widowed, and finally sells her duplex rental she has owned for 15 years for $500,000. Bobby is now met with a steep capital gains tax along with depreciation recapture taxes. A friend of hers recommended that she entertain an 1031 exchange and purchase a TIC Property. Her CPA gave her instructions and referred her to a Qualified Intermediary who acts as the escrow agent to carry out the 1031 exchange. She was instructed by her CPA that the QI cannot be a regular agent such as her lawyer, accountant or real estate broker.

At the closing of her duplex, the funds from the duplex go straight into the escrow account of the Qualified Intermediary, where Bobby now has only 45 days to find a replacement TIC Property. Bobby is permitted to identify up to three properties and 180 days to close on the deal. Her first choice she decided to identify a 20,000 square foot warehouse leased out to a local distributer at a 9.5 cap. Her second choice was a 5,000 square foot office building leased to a national tenant and for the third alternative she identified a class “A” power retail center anchored by Airplane! move Last Exit movie download Target and Super Wal-Mart located in Orlando Florida being sold as a TIC Property.

Now that Bobby has all three properties under contract she begins her due diligence. Over the next week Bobby starts her due diligence on her identified properties. She learns that the warehouse operator has only been in business for 2 ½ years with weak financials, so she eliminates that property.

She then focuses her attention to the office building.

Upon reviewing the lease carefully, her attorney informs her the tenant has an out clause after every 12 months with only a small penalty to pay. She decides not to pursue this one. Which leaves her with the potential TIC Property. If this doesn’t pan out, she’s going to be forced to pay the 1031 capital gains tax.

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The TIC Property is only 1 year old with no structural problems. Even though Bobby lives in Texas, since there are no management responsibilities on her end, the fact that the property is located in Orlando doesn’t bother her. In fact, she figures every couple years she’ll just plan a vacation in Orlando and check how her TIC Property is holding up.

Even though the cash flow wasn’t as high as the other two she identified, the credit can’t get much better and the area is growing by leaps and bounds. In addition, she doesn’t have to personally sign on any loans. Since the TIC sponsor recently purchased the property, he already had performed all the due diligence leaving Bobby and her attorney to just review the documents.

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Within a few days her attorney had completed his review of the TIC Property and given it a clean bill of heath and recommended Bobby to move ahead with the 1031 exchange. Tupac: Live at the House of Blues full movie

1031 TIC Properties often close quickly and even though Bobby had up to 180 days to close and complete her 1031 tax exchange, she finalized this trade in three weeks! Now Bobby is a proud co-owner along with 23 other investors in one of the most upscale shopping centers in Orlando and has successfully satisfied her 1031 exchange by purchasing a quality TIC Property.

TIC Buyer Beware.

TICs should be offered as a security with appropriate due diligence and transparency of all Sponsor fees.  We confessions of an innocent man online recommend you avoid a TIC that is not packaged as a security. Tenants in common structured as securities are offered through Registered Representatives who are appropriately registered through and associated with an actively registered broker/dealer that is a member of the NASD (National Association of Securities Dealers). Offerings are sold by a Private Placement Memorandum only, and are offered solely to pre-qualified Accredited Investors.

Recommended TIC Referral

If looking at TICs we recommend you only purchase TICs from a professional who is both real estate licensed and securities licensed. If you would like to be put in contact with a Registered Representative that has access to tenants in common’s sold as securities nationwide, please contact our office. The Clique release

Disclosure

Certain real estate professionals affiliated with Westwood are dually licensed and therefore have their securities license to sell TIC properties. These professionals are Registered Representatives with MICG Investment Management LLC.  Westwood Net lease Advisors and MICG Investment Management are not affiliated in any way.

MICG Investment Management LLC Branch office at 5121 Center Street, Suite 100, Williamsburg VA  23188

To be connected to a licensed TIC representative call 866-638-1031 ex 102 (Susan Gitt)