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Learning about TIC: Fees and Loads in a TIC Deal

Jul 24, 2008
If you are considering purchasing a property with additional investors, upfront you need to know more about TIC: fees and loads in a TIC deal. Fractional interest ownership in property is a growing trend as more people see real property as a solid investment for retirement. The most predictable and profitable properties generally will have multiple investors to share the burden, and profits. If you are looking to invest in property with a group, you should be as informed about TIC: Fees and Loads in a TIC Deal as you can because these fees will directly affect your bottom line.

TIC: Fees and Loads in a TIC Deal as They Apply to You

The most important thing to remember about TIC: fees and loads in a TIC deal is that these fees and loads are paid upfront at the time of closing. In general, before closing, all the fees and loads are reviewed and presented with an impact statement as to their affect on profits and taxes. Make sure that, before you invest, your fees and loads will not outweigh the profit you hope to make off the property in the long term. Short term you will take a hit paying these fees and loads, but they should not be so high as to affect your overall investment.

TIC: Fees and Loads in a TIC Deal, How Are They Calculated?

For the most part, these upfront fees are how the property sponsor makes a large portion of their money. They acquire the property, then sell it to you, the investor, and collect the fees and loads as their profit. These markups can vary and are figured based on how much the sponsor has put into preparing the property for investment. For the most part, TIC: Fees and Loads in a TIC Deal should hover around ten percent of the overall investment. These fees can be accumulated from due diligence costs, securities fees, commissions, financing expenses, and other charges. The load can increase the cost of a property significantly and you the investor have to be acutely aware of what percentage the TIC: Fees and Loads in a TIC Deal are.

Understanding where they come from and how they are derived will go a long way in protecting your investment. If you do not understand TIC: Fees and Loads in a TIC Deal than you will be doomed to lose money. An astute investor can negotiate the TIC: Fees and Loads in a TIC Deal to ensure and maximize profitability in your property investment.
About the Author
Kathryn R. Landry is a business writer for TIC Advisors, Inc . A company that can give you the most complete information on a 1031 exchange or TIC properties nationwide.
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