BENEFITS OF TENANCY IN COMMON REAL ESTATE OWNERSHIP
By: Karlin Conklin, IMG Principal & Executive Vice President
What is TIC ownership?
Tenancy in Common (“TIC”) is a real estate ownership arrangement in which there are two or more (10 maximum) co-owners. Each co-owner has a separate legal title to their undivided interest which can be exchanged or sold.
Below are four reasons a Tenancy in Common may be the right investment strategy for you right now.
1. You want to defer capital gains taxes
The US tax code gives real estate investment and ownership favorable treatment from depreciation, interest and expense write-offs, to capital gains deferral through the 1031 exchange process.
The exchanger can not only invest in a high-caliber, income generating, professionally managed TIC property, but can defer Federal, and in most cases state, capital gain and depreciation recapture taxes.
In 2002, the IRS issued formal guidelines for structuring TIC offerings to satisfy the “like-kind” requirements of 1031. Since then, thousands of real estate investors have used TIC investment properties (as an alternative to sole ownership) for 1031 exchanges.
Investors Management Group, Inc., as Sponsor, designs its offerings to meet current IRS guidelines and to accommodate the needs of accredited exchange investors.
2. You desire diversification in your portfolio
Think of Tenants in Common as a “strength in numbers” approach. This ownership structure allows multiple purchasers to combine their equity, thus providing access to investment grade real estate in a variety of emerging cities and suburbs across the United States. In fact, exchanging property across state borders is a common thing TIC investors do.
Especially during an economic downturn, investors desire this kind of diversified real estate portfolio offering professional property management and sophisticated asset management plus a higher quantity and quality of tenant.
3. You have no desire for hands-on property management
Many investors looking for steady cash flow seek a Tenancy in Common ownership structure in order to be freed from the day-to-day management hassles of sole ownership.
Each Tenant in Common is on title and benefits from legally proscribed involvement and voting rights. However, after an apartment asset is acquired, a Sponsor typically oversees the asset and makes improvements to add value to the apartment community, so the investor group enjoys a “hands-off” ownership experience.
Throughout the entire ownership period, a Sponsor delivers detailed property performance reports, personal investment information and annual tax forms for each Tenant in Common.
4. You value real estate expertise in a skilled sponsor
A Sponsor sources acquisition properties, conducts due diligence, arranges financing, provides asset management and accounting reports and executes the final disposition – all for the benefit of its investors.
Investing with an experienced Sponsor with a proven track record provides an opportunity for you to:
- Invest in larger or more exclusive properties with the potential for better returns
- Grow equity over the long term in well-located apartment properties, known to provide the best risk-adjusted returns in the industry
- Benefit from connections within a group of successful investors and nationally known industry experts
IMG’s TIC investment offerings are structured as 506c securities, and only accepts funds from accredited investors.
Read more in Karlin Conklin’s GlobeSt.com article: Tenancy In Common Versus Delaware Statutory Trust
Call Dave Mikkelsen at (971) 888-4010 ext. 108 for more information.
All offers and sales of any securities will be made only to Accredited Investors through a Confidential Private Placement Memorandum and any exhibits and attachments thereto (collectively, the “PPM”). Past performance of IMG-sponsored investments may not be indicative of future results.