TIC investments provide simplicity by eliminating active property management headaches. Individuals who are tired of the day-to-day burdens of being a landlord or who own land and would like an income producing property will appreciate the following benefits of a TIC investment:

• Cash flow is generally paid monthly and portions can be tax-sheltered via depreciation pass through and interest deductions. You may also share in the appreciation of the property when sold.

• Minimum equity requirements as low as $100,000 allow you to invest in multiple high quality, institutional grade properties.

• National real estate companies that structure these TIC programs acquire (identify and locate, evaluate, arrange financing, etc.), manage (maintain, lease, collect rent, service mortgage), and sell the TIC properties. They have a vested interest in the performance of the property. These companies usually have strong track records and extensive experience in various sectors, types, and locations of real estate.

• TIC investments enable you to replace your exact amount of equity and debt (when applicable) from your relinquished property for your 1031 exchange. In a TIC transaction, accredited investors assume non-recourse (no personal guarantee) financing on the TIC property. Debt on TIC offerings can range from zero debt up to 75% leveraged.

• TIC investments allow you to 1031 exchange your exact equity amount, investors can avoid paying taxes on boot when you cannot replace your TOTAL equity amount in a traditional replacement property.

Welton Street's ready inventory of TIC properties allows investors to easily identify TIC properties within the 45-day identification period, close within 180 days and select TIC investments that meet their equity and debt replacement requirements.

TICs are complex investments and may not be suitable for all investors. TICs are only available to accredited investors as defined by Regulation D of the Securities Act of 1933. Welton Street will help determine if you meet these requirements. Even if you do qualify as an accredited investor, a TIC may not be suitable based on your risk tolerance and investment time horizon.

TICs have long-term holding periods, limited liquidity and no active secondary market for the sale of TIC interests. This could impact your ability to access your investment. TICs have unique fees and expenses including sales loads different from other real estate investments that could impact cash flow and investment returns. As well, TICs are subject to risks similar to other real estate investments such as fluctuations in value due to changes in occupancy rates and economic factors. As well, although rare, TIC owners could potentially face capital calls on the investment. Prior to making an investment decision, investors should review the Private Placement Memorandum for information on fees, expenses and risks particular to the specific TIC.


Every Section 1031 Exchange transaction is different. These "Frequently Asked Questions" are intended to answer general inquiries. The application of these principles will depend on the specific facts of each transaction. Always consult a competent Qualified Intermediary, attorney, or tax advisor to determine how an exchange may best be structured to accomplish your investment objectives. Tenant-in-Common Investments (TICs) can be an attractive exchange option. However, TICs are not suitable for all investors.

Q – What is a Tenant-in-Common Investment (also known as Undivided Fractional Interest)?

The purchase of a Tenant-in-Common (or undivided fractional interest) structure allows investors to purchase an interest in a significant real estate asset, perhaps larger than they could obtain individually. The investor acquires a percentage ownership (title and deed) and receives passive rental income while receiving the tax benefits of traditional real estate. The investors own and control the properties, not a third party. TIC ownership provides investors with the first ever means for ownership diversity, both in location and type, of their real estate portfolio.

Unlike partnership real estate, TIC ownership entitles each owner to the same ownership rights regardless of the equity invested. This element of the investment structure puts no individual owner (or group of owners) in direct control of the property over any other investor(s). You can truly have all of the ownership benefits and security of a large commercial asset with significantly fewer obstacles. As with any type of investment real estate, the value of a fractional interest typically increases annually due to escalations inherent in most tenant leases.

Q – Who can invest in TICs?

TICs are considered securities and are subject to various securities rules and regulations. TICs are not available to the general public. Only accredited investors, as defined by Regulation D of the Securities Act of 1933, may invest in TICs. Welton Street will help you determine if you qualify as an accredited investor. An accredited investor is defined as:

• an investor having net worth at the time the investment is made greater than $1,000,000. • An investors having income for the last two years of at least $200,000 for an individual or $300,000 for a couple, and a reasonable expectation of reaching the same income level in the current year. • A trust with total assets in excess of $5,000,000 not formed for the specific purpose of acquiring the investment.

Q – Are there risks associated with investing in TICs?

TICs are complex investments and are not suitable for all investors. In addition to accreditation and suitability requirements, TICs have risks including but not limited to:

• long-term holding periods and no active secondary market for the sale of TIC interests. This could impact your ability to access your investment. • limited liquidity that could affect your ability to access or cash out your investment • unique fees different from other real estate investments that could impact cash flow and investment returns. TICs are subject to risks similar to other real estate investments such as: • fluctuations in value due to changes in occupancy rates and economic factors. • although rare, TIC owners could potentially face capital calls on the investment.

Q - What is a tax-deferred exchange?

In a typical transaction, the property owner is taxed on any gain realized from the sale. However, through a Section 1031 Exchange, the tax on the gain is deferred until some future date.

Section 1031 of the Internal Revenue Code provides that no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business, or for investment. A tax-deferred exchange is a method by which a property owner trades one or more relinquished properties for one or more replacement properties of "like-kind", while deferring the payment of federal income taxes and some state taxes on the transaction. The theory behind Section 1031 is that when a property owner has reinvested the sale proceeds into another property, the economic gain has not been realized in a way that generates funds to pay any tax. In other words, the taxpayer's investment is still the same, only the form has changed (e.g. vacant land exchanged for apartment building). Therefore, it would be unfair to force the taxpayer to pay tax on a "paper" gain. The like-kind exchange under Section 1031 is tax-deferred, not tax-free. When the replacement property is ultimately sold (not as part of another exchange), the original deferred gain, plus any additional gain realized since the purchase of the replacement property, is subject to tax.

Q- What is the difference between "realized" gain and "recognized" gain?

Realized gain is the increase in the taxpayer's economic position as a result of the exchange. In a sale, tax is paid on the realized gain. Recognized gain is the taxable gain. Recognized gain is the lesser of realized gain or the net boot received.

Q - What is Boot?

Boot is the term the IRS uses for the part of the exchange that is taxable. Boot generally arises for one of two reasons: the seller bought down, or the seller did not reinvest all proceeds from their sale.

Boot is also any property received by the taxpayer in the exchange which is not like-kind to the relinquished property. Boot is characterized as either "cash" boot or "mortgage" boot. Realized Gain is recognized to the extent of net boot received.