Pros and Cons
In general, it is important to be aware of the pros and cons of something before going through with it, and the same rule applies to the TIC financing option. There are a lot of different factors that one should consider when purchasing a TIC. Whether there have been any evictions on the property they are considering, how long the current TIC partners have been in place, and how many units are in the building, for instance, are all relevant and very important to take into consideration here.
Although they do hold many benefits, TICs are also quite risky, and are subject to changes in legislation that could offer a negative blow at any point. Because of this it is important for anyone even just considering investing in a TIC to make themselves more educated and to speak to a professional in this area so they can get help in deciding whether this is going to be a smart financial move for them or not.
Tuesday, August 12, 2008
What is a TIC: Attorney Opinion Letter? - Part 2
What it is
Sponsors here obtain legal opinions from their own law firms, stating that the TIC interests they are selling are interests in real estate, rather than securities. The client can then use this opinion and rely on it, and can even seek to obtain damages from the party that gave the opinion if any of it proves to be false or if the opinion turns out to be incorrect in some way.
TIC promoters and investors in TICs should exercise all the caution and prudence that they can, in order to best protect themselves and also to ensure that the entire process goes through as smoothly as possible. There are many ways that one can do this, one being that if the Master Lease arrangement should be used to avoid the prohibition on the use of a single name.
In this and similar cases, a TIC: attorney opinion letter should be obtained in order to negate any possible tax penalties.
Sponsors here obtain legal opinions from their own law firms, stating that the TIC interests they are selling are interests in real estate, rather than securities. The client can then use this opinion and rely on it, and can even seek to obtain damages from the party that gave the opinion if any of it proves to be false or if the opinion turns out to be incorrect in some way.
TIC promoters and investors in TICs should exercise all the caution and prudence that they can, in order to best protect themselves and also to ensure that the entire process goes through as smoothly as possible. There are many ways that one can do this, one being that if the Master Lease arrangement should be used to avoid the prohibition on the use of a single name.
In this and similar cases, a TIC: attorney opinion letter should be obtained in order to negate any possible tax penalties.
What is a TIC: Attorney Opinion Letter? - Part 1
One of the most important components of any TIC investment is the TIC: attorney opinion letter. Most PPMs of securitized TICs will, or at least should, include the TIC: attorney opinion letter, and so it is something that all investors and potential investors should be aware and understanding of.
What it is
The TIC: attorney opinion letter is used in particular situations. Occasionally, TIC interests are treated as real estate rather than as securities, and in this situation a TIC: attorney opinion letter can be used.
What it is
The TIC: attorney opinion letter is used in particular situations. Occasionally, TIC interests are treated as real estate rather than as securities, and in this situation a TIC: attorney opinion letter can be used.
The Guidelines of a TIC: Agreement - Part 3
Problems
There are also a few problems that come with the TIC: Agreement however, and these problems can easily become very complex. One of the biggest problems is that this agreement does not cover current issues, and even worse, if the persons involved do not have any agreement at all then neither will be covered and serious liabilities and expenses may occur as a result.
By being aware of both the pros and cons of this agreement before getting into it, people will be more prepared and also more understanding on what they have available to them. In summary however, these investments do offer many huge advantages, which should definitely be taken into consideration by potential investors.
There are also a few problems that come with the TIC: Agreement however, and these problems can easily become very complex. One of the biggest problems is that this agreement does not cover current issues, and even worse, if the persons involved do not have any agreement at all then neither will be covered and serious liabilities and expenses may occur as a result.
By being aware of both the pros and cons of this agreement before getting into it, people will be more prepared and also more understanding on what they have available to them. In summary however, these investments do offer many huge advantages, which should definitely be taken into consideration by potential investors.
The Guidelines of a TIC: Agreement - Part 2
Advantages
There are many advantages that people sharing property together holds from having a TIC: Agreement set into place. For one, ownership of a TIC: Agreement allows the investor to own a fractional interest in a large, institutional-grade investment property.
One of the major advantages of this agreement lies in the potential it offers for tax-free exchange treatment. A taxpayer can use a TIC investment as either relinquished property or replacement property in a qualifying tax-free exchange.
There is also the option of reselling interest in a TIC investment, because significant value could result from this decision. It is important, especially for anyone not completely educated on the agreement speak to a tax consultant or other knowledgeable professional in this area who will be able to help them decide whether or not this is going to be a smart move for the
There are many advantages that people sharing property together holds from having a TIC: Agreement set into place. For one, ownership of a TIC: Agreement allows the investor to own a fractional interest in a large, institutional-grade investment property.
One of the major advantages of this agreement lies in the potential it offers for tax-free exchange treatment. A taxpayer can use a TIC investment as either relinquished property or replacement property in a qualifying tax-free exchange.
There is also the option of reselling interest in a TIC investment, because significant value could result from this decision. It is important, especially for anyone not completely educated on the agreement speak to a tax consultant or other knowledgeable professional in this area who will be able to help them decide whether or not this is going to be a smart move for the
The Guidelines of a TIC: Agreement - Part 1
A TIC: Agreement, or Tenants in Common Agreement, is an agreement that is used to establish the rights of people who own property together but who are not related by marriage. Any people who own property together but who are unmarried are considered as being tenants in common, and the TIC: Agreement is then used to cover them and to consider an entity, the property, that they own together.
There are certain issues that should be covered by this agreement, including the division of property into individual and group shares, formulas for determining each owners’ monthly payment in advance and periodically adjusting the amount, and provisions defining when a default has occurred and to then describe remedies to solve the problem.
There are certain issues that should be covered by this agreement, including the division of property into individual and group shares, formulas for determining each owners’ monthly payment in advance and periodically adjusting the amount, and provisions defining when a default has occurred and to then describe remedies to solve the problem.
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