1031-TIC Pitfalls

Pitfalls of acquiring a 1031-TIC

While TIC Advisors believes that Fractionalized or Tenant-in-Common ownership is creating a paradigm shift in the way institutional real estate is owned; we also believe that this positive change will not occur without some growing pains. While 1031-TIC investments can be a wonderful exchange solution for investors wanting passive ownership, identifying and acquiring the best TIC exchange property have some of the following challenges:

Real estate prices are at historically high valuations. Investor demand for 1031-TIC properties is greater than the supply, which can cause investors to loose sight of core real estate fundamentals when trying to satisfy their exchange under strict IRS guidelines. Excess investor demand is causing some real estate Sponsors to be more aggressive in their underwriting standards of the properties they acquire. Lack of, and in many cases a complete absence of, broker/dealer due diligence. Many of the registered reps promoting TIC investments have little or no real estate experience.

Not all TICs are created equally and it is our belief that investing in 1031-TIC properties should be approached in a similar fashion to that which an investor would approach buying a property for sole ownership. TIC Advisors purchases and gathers 3rd party market research reports, tenant profile reports and informational mapping reports from the premier providers of research services to owners and real estate investors in the U.S. Our clients benefit from the forecasting models and economic experience of our data providers. Our commitment is to empower our clients with valuable information to better help them make informed decisions so that you can preserve their equity.