What is a Tenants in Common Real Estate Investment?

In 2002, the IRS issued guidelines (Revenue Procedure 2002-22) governing the structure of Tenant In Common (TIC) property investments. These guidelines dictate that a Tenants In Common, also known as co-ownership of real estate (CORE), should have no more than 35 investors. The typical structure includes from 12 to 20 TIC/CORE investors in a property..
Tenants In Common investments vary from property to property. The minimum equity amount varies depending on the property, the amount of equity being placed, and the number of co-owners. Generally, loans range from 5-10 years and coordinate with the specific business plan set forth for buying the investment property. The typical stated minimum investments range from $100K to $650K, though some of the larger investment properties will have much higher stated minimums.
Each Tenant In Common investor receives monthly checks, with initial cash flow ranging between 5-8% of the initial equity (cash) invested. Overall annual returns are projected in the low to mid teens including cash flow, appreciation, and principal reduction of the non-recourse financing, depending on the property.
An investor's TIC/CORE interest can be purchased, sold, gifted, bequeathed by will, or inherited, and is subject to property taxes, gift tax, estate and inheritance taxes in the same manner as a sole ownership property.
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