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1031 Exchange - Tenant in Common triple net lease vs. 1031 Exchange - Tenant in Common tenants in common
Sole Ownership NNN vs. Tenants in Common (TIC)
Since the mid-1990s, 1031 exchange investors have reinvested their equity into triple net lease investment properties structured as Tenancy-in-Common. If you are an accredited and pre-qualified investor searching for a triple net lease property, you may consider the following potential advantages of investing in a tenants in common: (also click here to see potential tenants in common Pitfalls)
1 Selection of Qualified exchange 1031-triple net lease properties.
A limited variety oftenants in common -triple net lease properties usually exist for sale in different asset classes and geographical locations.
2 Diversification.
There is always risk, but net proceeds may be split among several tenants in common -triple net lease properties and thus invested in several different markets and asset classes, depending on an tenants in common exchanger's equity/debt requirements and the limited number of tenants in common properties available during the Exchanger's identification period.
3 Locating 1031-tenants in common -triple net lease replacement 1031 properties.
A real estate company typically locates the 1031-tenants in common -triple net lease property, conducts its own due diligence research, arranges for the financing, manages the acquisition of the new investment property, sets up the tenants in common program, and provides the new owners with a management contract with a property management company to manage the property on a day-to-day basis.
4
The tenants in common
exchanger can potentially invest in institutional grade properties.
Large institutional grade properties could potentially benefit an investor by having access to more competitive lenders, institutional buyers, and a stronger, more stable tenants base.
5 The 1031 exchange exchanger may benefit from non-recourse debt.
Investors assume institutional grade, pre-arranged, non-recourse (no personal guarantee) financing. tenants in common-1031 properties that have no debt, or up to a range of 75% leverage are sometimes available. (Note there are usually certain carve-out provisions wherein tenants in common owners could be personally liable.)
6 tenants in common Exchangers may often match or exceed exchange equity/debt requirements.
tenants in common investments offer investment opportunities ranging from as little as 50K equity up to several million dollars.
