Tenants-In-Common (TIC) allows two or more people to have an undivided, fractional interest in an investment property.  They often used in the Exchange Last Structure of a Reverse Exchange.  Property shares between the owners do not need to be equal, and ownership interests can be inherited.  Co-owners must receive an individual deed at closing and his undivided percentage interest in the entire property. 

Any person who would like to be a property owner can participate in a TIC exchange.  The main requirement for a TIC exchange is that two or more people must invest in the same property.  As many as 35 investors can invest in the same property.  This allows investors to purchase properties they would not be able to afford on their own, and it also allows them to put toward an investment property only as much money as they have. 

The average person can enjoy ownership in an institutional-type property with a minimum investment. Because of this fact, the TIC structure can be very attractive to real estate buyers.

An average person can partner with others to buy expensive properties. Properties like this are reliable income and have growth potential, and they can attract tenants with greater financial strength and stability than possible if each owner had the property himself.

Exchangers can invest the exact amount they receive from their Relinquished Properties into the Replacement Properties. For example, if an Exchanger sells land for $40,536, he can invest $40,536 in a larger TIC property.

As many as 35 investors can put their money toward a property.
 
Diversification

Investors can put their money toward many different properties, including property in prime retail areas with high traffic counts.

 

A Triple Net Lease designates the tenant as being solely responsible for all of the costs relating to the asset being leased. Examples are any insurance, maintenance, taxes, upgrades, utilities, repairs, etc. For this reason, tenants involved in NNN leases must have very good credit rating because they have a large responsibility.

This is a very helpful setup for a TIC exchange, because NNN leases are nearly 100% management free. Property owners do not have to worry about the maintenance of the property, and in this case could earn even more money with less hassle. When the tenant pays for normal expenses of ownership, the owner is free of day-to-day management responsibility.

Triple Net Leases are negotiable and should be discussed before signing the lease. One major issue to include in a NNN lease is roof repair. Even though a renter usually pays for structural repair, the property owner typically pays for roof repairs.