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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