A new book on TIC, or Tenant In Common, a form of 1031 real estate investing is out and looks promising. Effortless Cash Flow: the ABC’s of TICs (Tenant in Common Properties)  offers some great hints on how to participate in this market especially as profitable opportunities in residential real estate are drying up. The following is some advice for those looking to participate in a Tenant In Common purchase by the author, Kathy Heshlow.

It is easier to list some of the examples when an investor should NOT consider a TIC investment:

* Don’t consider a TIC if you do not want to lose management control of your real estate investment. (A professional management company will be handling the day to day).
* Don’t consider a TIC if you need to negotiate everything. (These are prepackaged deals whereby everything has already been negotiated and the deal is ready to go. Contracts, TIC Agreements, loan documents, etc. are set).
* Don’t consider a TIC if this is to be a short-term investment. (TICs should be considered long-term, whether that means 2 to 5 years or 10 years. The property will be resold and you will benefit from your pro-rata share of the sale proceeds at that time. Real estate is illiquid, and there is no developed secondary market for TICs at this time).
* Don’t consider a TIC if you don’t want to be in a group investment with others unknown to you. (In a TIC, you have a deeded percentage interest in the property).
* Don’t consider a TIC if you intend to live entirely on the cash flow from it. This would not be considered suitable in securities terms.
* Most minimum equity requirements start no lower than $100,000 – they are usually higher. So if the proceeds from your investment property sale are lower than $100,000, it would be difficult to consider a TIC. In fact, many of the lowest requirements today are $250,000 to $300,000.

A few reasons to consider investing in a TIC include:
* you are accredited and you want to diversify your real estate into various property types or geographical areas.
* you know real estate but are tired of managing it.
* you want a cash flow and enjoy the tax benefits of real estate, but this is not your only income.
* you want to diversify your overall investment portfolio of stocks, bonds, mutual funds, business investments, etc.
* you want to ‘trade up’ to better quality real estate.

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