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Getting Started In Real Estate Investing
With all the stories of people making tremendous amounts of money in real estate it's no wonder why so many are looking at real estate as an investment vehicle. It offers more security than the stock market, provides great potential returns, offers tax ...
How to Sell Your House For Full Price
How to Sell Your House For Full Price Without a Broker Many people believe that a real estate broker is needed to sell their house. So they post it with a broker who may or may not sell it and if they do charge exorbitant fees. One would think that that ...
Wired. It's More than the Name of a Magazine
Recently I posted a couple of articles on my blog that discussed the new products that were being introduced at February's International Homebuilder's Tradeshow in Orlando, and how they will ultimately change the way new homes are built in the future. ...
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TIC, also known as Co-ownership of Real Estate (CORE), enables an investor to participate in the ownership of institutional-grade, professionally managed investment properties. The investor's equity can be diversified amongst several different properties, geographic markets and real estate companies, potentially increasing both the value and safety of the real estate investment. TIC/CORE investments are designed to offer preservation of capital, predictable cash flow and long-term appreciation in institutional-quality investment property assets that benefit from greater economies of scale.
With its features and benefits, TIC/CORE is an increasingly popular 1031 exchange option for many real estate investors. However, 1031 exchanges and TIC/CORE transactions are very complicated, with both tax and legal issues topping the list of potential pitfalls. It is therefore essential that investors be knowledgeable about what to look for in a quality advisor. Financial advisors are required by securities law to be properly licensed in order to consult clients regarding TIC/CORE transactions and other investment interests in real estate. Financial advisors should hold both Series 7 and Series 63 securities licenses to qualify them as knowledgeable, well-rounded consultants in the investment process. It is essential that they have experience in the commercial real estate business, in addition to an understanding of personal investment objectives and client suitability issues.
But perhaps the most important component to look for in a TIC financial advisor is their intimate, trusted and deeply rooted relationships with key real estate companies. This attribute is critical to their ability to provide the best opportunities for their clients. There are almost 80 real estate companies across the United
States that are either already involved or considering involvement in the TIC/CORE industry as a real estate provider. As with any industry, these 80 companies represent varying degrees of acumen, experience and quality. To achieve the greatest potential for a client, a financial advisor should have consistent access to the top ten percent of these companies in order to provide their client access to the best properties available. Obviously, a new financial advisor with little or no experience or industry knowledge may not have access to the top real estate providers, as these providers prefer to work with experienced consultants that specialize in this unique segment of the market.
Investors should also be aware of how their financial advisor stacks up, looking for a history of successfully completed transactions. A long and proven track record indicates that a financial advisor is an experienced professional. An investor wants such an advisor in their corner asking all the right questions, making appropriate and suitable recommendations, understanding the nuances of successfully completing TIC/CORE transactions and providing answers to any and all tax and legal
questions.
When considering a 1031 exchange or TIC/CORE investment, investors should ask the following specific questions of the financial advisor:
* What percentage of your business is 1031 exchange and/or TIC/CORE related?
* How many investors have you consulted that invested in TIC/CORE structured properties this year? How many last year?
* How long have 1031 exchanges and TIC/CORE been a focus of your investment recommendations?
* Do you have the appropriate licenses to complete this transaction (Series 7, Series 63 securities licenses)?
* With which real estate providers do you work most closely?
As customer demand continues to drive this segment of the real estate market, the emphasis on quality - quality consulting, quality property, and quality transactions - will be increasingly important. Part of the qualitative process is ensuring that financial advisors representing a client make appropriate recommendations for that client based on the client's best interest and not based on any "bias." A final issue that needs to be addressed is that it is not unusual for "referral" compensation to be paid between referring parties. This practice is illegal and a complete breach of ethics,. Therefore, if any form of compensation changes hands - disclosed or undisclosed - between financial advisors and Qualified Intermediaries, real estate companies or other unlicensed individuals derived from an exchange transaction, a felony may have occurred.
In short, investors should take the time to identify a reputable advisor who not only can provide acceptable answers to the above questions, but who will also have the relationships necessary to guide their clients into the appropriate investment. It is important to remember, firms or individuals involved in recommending, offering or selling 1031 TIC/CORE investments must be licensed with a broker-dealer, the SEC, the NASD and the state securities regulators in every state in which the firm or individual operates and in which the client resides. Any "unlicensed" firm or individual involved in recommending, offering or selling these investments is in direct violation of federal and state securities laws.
Co-ownership is the fastest growing option for 1031 exchange investors seeking suitable replacement property. Properly structured and presented, such investments can also generate new listing opportunities for real estate agents while satisfying both the IRS "like-kind" investment property requirements and the SEC and NASD securities regulations. The advantages of co-ownership of institutional-grade real estate are clear and compelling. When exploring co-ownership, smart investors need to seek out industry experts to guide them through the replacement property process. It is indeed the wise investor who is aware of his or her long-term goals that seeks experienced guidance to chart their course, thereby turning TIC/CORE investment opportunities into realities.
(c) 2005, 1031 Exchange Options.
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Real estate: Economic impact in 2011, expectations for 2012VanguardAlitheia Capital Limited, an impact investment firm based in Lagos, noted in a report that by end Q2, real estate transactions and construction borrowing picked up slightly. Sector growth fell (by 0.2%) compared with the corresponding period in 2010. |
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Global real-estate markets continue promising trendThe NationWhile economic uncertainty still affects the main commercial real-estate centres around the world, global real-estate markets are showing steady improvements, according to Jones Lang LaSalle's new suite of global forecasting reports. |
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