TIC (Tenant in Common) Resales

[Hank Schneider]

This is only somewhat related to appraisal, but I want an honest, informed opinion, which is why I'm posting the question on this forum, rather than on a brokers forum.

You can't swing a dead cat on the 'net without coming across ads promoting TIC real estate investments. They sound great, but here's the catch, (and possibly the opportunity) as I see it. Everyone wants to sell them, but I have seen no way for people to resell them. So, when it comes time to sell, you probably have to sell them at quite a discount. Has anyone had any experience firsthand or otherwise, reselling a TIC investment?

I'd be tempted to run an ad in the paper offering to purchase TIC investments. It would have to be at a discount given the time spent investigating the tic, attorney's fees, etc, but I'd think that as more of these are sold, people are eventually going to try to get out of these and will take pretty much anything offered, especially if no one else if offering to buy them.

So, whadayathink?

Hank

 

[T.E. Faravelli]

Everyone wants to sell them, but I have seen no way for people to resell them.

So, whadayathink?

Hank

How or why would holding title in TIC restrict its transferrability? I have many a sale with title vested TIC.

 

[H.B. Userman]

In my market, TICs are organized as an alternative to investing in property with an IRA. I don't know much about selling them, as I've only seen a few sales, all of which sold with 100% of the parties' interests.

As far as selling a partial interest, I'd bet there are some critical issues. I have no partial interest experience, but some appraisers specialize in that. You will probably find one here with some good input.

 

[Stephen J. Vertin MAI]

Hank:

Welcome to the forum. Before I answer could you please tell us if you are talking about buying partial interest in a TIC. It sounds like you are but I would like to make sure. Further what type of property and where is its approximate location.

Steve Vertin

 

[Howard Klahr]

Here are links to a few articles you may find interesting.

Retail Traffic Article - TICs

Intro to TICs

Realty Times - TICs Q&A

 

[Hank Schneider]

Steve,

Thanks for continuing this discussion. Howard thanks for the links.

I'm at the stage of doing preliminary research on TIC's, I'm not about to invest in one. It would most likely be a partial interest. It all depends on what's available. Have you heard of how one goes about getting OUT of a TIC investment? With so many people getting into TIC's, it seems that there should be some way to get out of one, but I haven't heard of one yet. And therein lies the potential opportunity, buying people's interests in TIC's that they want to get out of.

There would have to be a fair amount of due diligence on the TIC sponsor and properties before I'd buy one. But if the discount should be enough to cover those costs and still allow for a nice return.

TIC's remind me of the saying, "The pioneers get the arrows, the settlers get the land."

 

[Betsy M. Landrum]

Attorney Expert

San Francisco has a very active TIC market. We have a prominent attorney expert here who has tons of information on his website:

http://www.andysirkin.com/

Hope this helps, and good luck!