For those of you not familiar with Tenants-In-Common or Co-Ownership investments. 

Each TIC owner holds title to an undivided fractional interest in a specific property.

The percentage of ownership does not have to be equal.

Each TIC owner is entitled to their ownership percentage of income and appreciation.

Each owner retains the right to transfer, partition, and encumber their interests in the property without agreement or approval of any of the other Co-Owners, (subject to lenders approval).

TIC owners execute an agreement with the sponsor that establishes protocol for various decisions and operational functions relating to the property; however the owners still maintain control of the property and must consent to any major changes, including the sale and or refinancing of the property.

Why would an investor consider a TIC?

Investors have access to higher quality properties and tenants.

It is a passive investment with relief from trash, tenants, toilets, and day-to-day management. A TIC investment property allows investors to get out of the landlord business and still enjoy their proportionate share of income, tax benefits, and appreciation.

Co-Ownership is a simplified solution for a 1031 exchange. The pre-packaged nature of Co-Ownership or TIC properties makes it much easier to meet the 45 day identification and 180-day purchase deadline.

Failure to meet these time frames is the biggest reason exchanges fail.

Investors have the ability to diversify into multiple properties and markets with access to trophy properties previously available to only very large or institutional investors.

With low minimum investments, investors can achieve greater diversification by purchasing C0-Ownership in multiple properties in different geographical locations.

Another reason would be, the investor, invested in one property and has additional funds that need to be invested in order to defer taxes. TIC ownership could be the perfect solution.

Remember we don't set the rules, the IRS does. If the client does not exchange or misses their 45 day identification period there are severe penalties to pay, a 15% capital gains tax, 25% recapture of depreciation, and any applicable state tax, e.g. CA 9.3%.

That is one of the reasons most people will exchange in addition to creating wealth.