Learning About the TIC: Subscription Risk - Part 1

TIC investments are investments that essential give a person ownership of a piece of large, institutional grade property and a sharing of the income among one or more other people.

The TIC: subscription risk is a very important issue to be aware of, especially if you are considering going through with the TIC investment yourself. You need to be aware of all the different risks and then weigh out the pros and cons and use this to decide whether it is a good idea for you or not.

What is the TIC: Subscription Questionnaire? - Part 1

A TIC: subscription questionnaire is a very important part of the TIC subscription process. There are a few steps involved in the process, including the TIC: subscription questionnaire, which will be discussed in more detail here...

What is the TIC: Subscription Questionnaire? - Part 2

The Process

The first step involves you, the investor, completing an accredited client form. Once you have done this the registered rep will be able to provide sponsor property offerings to you. You will also have access to a secure web page describing potential offering at this point.

The next step in the process is when the registered representative forwards offering brochures of potential TIC offerings. After reviewing the PPM both the broker dealer and the sponsor will need to fill out a TIC: subscription questionnaire.

This questionnaire will ask various questions, including questions regarding the investor’s tax returns, credit authorization, and may even require a financial statement to go along with it. It is very important that this TIC: subscription questionnaire be filled out properly and accurately, so that the rest of the process can go by as quickly as possible.

The length of this process will vary from one case to another, but generally it takes a couple of weeks to complete fully.

What is the TIC: Subscription Questionnaire? - Part 3

Benefits

Before you get around to filling out a TIC: subscription questionnaire, it is important that you take the time to actually consider whether a TIC is a good investment choice for you at this point in your life or not.

There are certainly many possible benefits that are offered by this investment, one of the most major being that cash flow is generally paid monthly and is tax-sheltered via depreciation pass through and interest deductions. This means more savings and value for you and less taxes that you have to pay out.

What is the TIC: Subscription Questionnaire? - Part 4

TIC investments also provide great flexibility and versatility, and allow you to avoid the taxable boot if your preferred real estate does not allow you to meet the full debt and equity requirements.

A TIC exchange offers strong benefits that translate into investment savings and with it you can eliminate day to day investment property management hassles, potentially increase cash flow, and take advantage of the ability to pick and choose the specific market and opportunity that best suits you.

If you need help filling out your part of the questionnaire, you can get a tax consultant or financial advisor to assist you and they will make sure that you are filling it out correctly.

Everything You Need to Know About TIC: Reserves, Financials, and Proforma - Part 2

Rules

There are a few rules related to TIC: reserves, financials and proforma, three in particular which are: the Three-Commercial Property Rule, the Two Hundred Percent Rule, and the Ninety-Five Percent Exception.

The first, the Three-Commercial Property Rule allows the exchanger to identify up to a total of 3 potential replacement commercial properties within the acquisition period. The Two Hundred Percent Rule holds that if there are three or more commercial properties that are identified as replacement commercial properties then their aggregate market value cannot exceed that of 200% of the value of the commercial property sold.

Finally with the Ninety-Five Percent Exception, this is only used in the event that the first two rules do not apply, and in this situation the aggregate market value of all properties acquired in the exchange must comprise of at least 95% of the closing value of the commercial property relinquished.

There is also other important information regarding TIC: reserves, financials, and proforma that any potential investor should be aware of, and if you are considering this the best idea is for you to talk to your tax consultant. They will assess your current situation and help you to decide whether or not this is going to be a smart move for you to make.

You can also do a bit of research on your own, by using the Internet and reading up on TICs and similar investments. The more educated you are the better off you are going to be, and the more intelligent and rewarding financial decisions you are going to be able to make.