1031 Tenant in Common News
Electronic Theater Specializes in §1031 and TIC Real Estate Investment Marketing Services
San Diego, CA (PRWEB) April 20, 2005 -- Electronic Theater, a full service
marketing agency based out of Southern California, has been working along side
top sponsors, broker/dealers and registered reps to provide high concept
marketing materials for the emerging §1031 Tenant-in-Common (TIC) industry.
While a §1031 exchange is not a new form of capital gains tax deferral
establishing its roots several decades ago, the TIC investment business has sky
rocketed since 2000 gaining stride from a 1.7 million dollar annual industry of
today to the expected 5 - 7 Billion dollar investment channel by
2007.
Due to expanded baby boomer retirement money hitting the market now
and in the next few years, billions of dollars of real estate investments will
be exchanged into fractionalized, undivided interests in larger property
investments utilizing an IRS Code 1031 Exchange which allows sellers of
like-kind investment properties to roll over and re-invest their profits in
higher quality properties without paying the IRS capital gains. Since the bond
and stock markets went south in 2000, the teeter-totter propelled the real
estate market into extraordinary high yields making it more attractive for many
boomers to relinquish smaller property investments and legally exchange into
larger ones without paying taxes. Like-kind properties, in this case, refers to
income producing real estate, not a residence.
An advantage of exchanging
or independently investing into a TIC managed property offered by broker/dealers
are their sponsors (real estate companies who finance, purchase and maintain the
properties) who take all of the up-front risks and liabilities of finding,
acquiring and marketing these deals prior to filling up the TIC placements. Most
of these expenses are charged back to the investors, however, the due diligence
expense is never recaptured if the property does not meet specific positive
analysis. As a title holder in a TIC unit investors do not have to hassle with
day to day management problems of up-keep, tenant leasing or distribution of
triple net expenditures. It would seem the sponsors, who are not allowed to take
a percentage of the eventual appreciated sale of the property, are at the
disadvantage. Sponsors not only take on all of the responsibility, they must pay
the broker/dealers and reps their commissions upfront regardless of how the deal
matures.
Who is responsible to the investors? Well, the SEC and NASD are
“eyes wide open” on sponsors, broker/dealers and registered reps to comply with
very strict rules and regulations regarding protection of the investor... as
well as the IRS to meet all of their rules for a competent §1031 exchange. In
2005, the SEC came down on many sponsors and broker/dealers by asserting new
rules that identify this type of real estate deal as a security, just like any
other security sold in the United States. Keeping up with compliance issues is a
full time job in itself. For information on current IRS §1031, visit the IRS
website at http://www.irs.gov and
type in the keyword “1031 Like-kind Exchange.” Currently there have been some
Presidential extensions to the 45-day identification period to include service
in combat and natural disasters.
In any event, this market is so hot
right now, the number of US-based TIC sponsors are growing exponentially as well
as off shore companies gobbling up the ever sought after $20 M to $50 M
buildings attracting this investment cash cow. The question will be: Are there
enough high quality industrial grade, commercial and office buildings to go
around?
For the past 5 years Electronic Theater has been working with
several companies in this industry building their new company brand by creating
websites, online sales and educational conferences, email blasts, business
presentations, print and tradeshow presence for top producers in this field.
Compliance and design are everything! Let us worry about your marketing
materials, you worry about location, location, location.
Article written
by Electronic Theater president, Jerri Nachman, producer and project manager for
premier sponsors, qualified intermediary, broker/dealers and registered reps.
Electronic Theater and associates built the Tenant-in-Common Association (TICA)
website at http://www.ticassoc.org where much of the TIC information is
available. For more information on Electronic Theater, visit: http://www.electronictheater.com or call
760-436-8449.
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Source : http://www.prweb.com/releases/2005/4/prweb230814.htm