TIC Sponsors Are Entering The Industry In Greater Numbers

Todays changing real estate investment vehicles have made the industry more accessible to different kinds of investors while at the same time complicating things for professionals who are already engaged in the real estate business. A good example is TIC or tenancy-in-common through which costly investments in real estate are made accessible to many more people who otherwise would not have been able to afford to make investments individually.

Investments Must Be Considered As Real Estate

As far as TIC sponsors are concerned, they would prefer having their investments defined as if it were a real estate piece and nothing else as this would help the TIC sponsors to bypass the process of securitization that is both costly as well as time consuming. However, today most TIC sponsors may actually claim that TICs are in fact securities and thus are willing to go through the trouble of spending more and doing more paperwork in order to treat their TIC interests as real estate as well as securities.

The fact of the matter is that for TIC sponsors it would definitely not be to their advantage to consider TIC as security because of the additional costs involved and they would actually be able to realize greater profits if they treated the TIC as being real estate and nothing else. Furthermore, there is also the fact to consider that securitization costs a lot of money and it also takes up a lot of time and thus if you ensure that TIC interest is qualified just as interest earned in real estate and not from security, as TIC sponsors you stand to save considerably in terms of securitization fees as well as costs of attorney hiring, and it would be far better for the TIC sponsors to offer the products at prices that are on the lower side and thus be able to earn greater profits.

In the present times, it is also usual for TIC Sponsors to hire a broker or dealer in securities through whom he or she can sell their TIC interests though there is also a lot of pressure being exerted by real estate brokers who would like them to be also made a part of the process as well. Real estate brokers can of course also earn commissions whenever they sell real estate to TIC sponsors, though they are not made a part of the remaining portion of the process including sales of TIC interests which is something that the brokers would like to fix.

However, the bare facts point out that today there are increasing numbers of TIC sponsors that are entering into the industry despite the fact that they have not always been successful with their first deals and an example of such TIC sponsors is DeSanto in Media, PA and Equitable Cos. in Los Angeles.

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