TIC Securities Broker-Dealers Stand to Make Lots of Money

TIC Securities Broker-Dealers Stand to Make Lots of Money
By Gary K Landry

The TIC industry is entering into its eleventh year and expectations are high that growth in this industry will be appreciable because investor confidence is growing all across the board and volumes of transactions too are rapidly increasing and more and more new sponsors are also entering the market.

In fact, it is believed that from the end of the year 2001 till the end of the previous year the deals struck accounted for as much as, it is believed, 3.7 billion dollars.

Thus, becoming a TIC Securities Broker/Dealer is surely going to prove to be a paying proposition. The fact of the matter is that many TIC sponsors are also choosing to structure their TIC investments as securities and though they may be regulated by SEC as well as by NASD, it throws open the doors for many more TIC securities Broker/dealers to earn hefty commissions from brokering or affecting such transactions.

Many Challenges To Confront

Since 1031 TIC exchanges are most often handled by TIC securities Broker/dealers under the Securities and Exchange Commission's oversight, there are many challenges that the TIC securities Broker/dealers have to confront including not involving real estate professionals who only help in buying and selling real estate. Still, to protect one from the pitfalls of securities investments an investor dealing with TIC securities Broker/dealers must consider a few things.

One of the more important aspects that you will need to consider when dealing with TIC securities Broker/dealers is to learn about the percentage of business that the broker does with regard to TIC interests in the form of securities, and to be on the safe side, you should ensure that the TIC securities Broker/dealers are in fact mainly dealing with TIC exchanges in the form of securities and which must form the core of all their business dealings and which is not a side business for them.

Also, according to law courts in the US, an investment is deemed to be a security if the money earned by way of profits from investments comes through efforts made by others.

So, if you are planning to use TIC securities Broker/dealers for your TIC exchange transactions, it is necessary that you first of all apply what is known as the Howey test to ensure that you don't end up selling through a real estate broker, even though the temptation to do so is high given the fact that real estate TIC interests have lower fees as compared to when selling securities.

Your best bet with regard to dealing with TIC securities Broker/dealers is to follow the National Association of Securities Dealers' notice that reviews the rules regarding broker-dealers when selling your TIC shares.

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TIC Securities Broker-Dealers Stand to Make Lots of Money

What You Need to Know About TIC Market Risks

What You Need to Know About TIC Market Risks
By Gary K Landry

There are risks in any and every aspect of the real estate market, even in 1031 TIC exchanges. (1031 is the tax-deferred version of Tennant In Common or TIC real estate investment). Just trying to find out what it is carries its own risk.

Just look at the headache I have now! Oh, you can't see me. I forgot. Let's go on to some more practical advice about identifying and avoiding TIC market risks.

Let's Be Careful Out There

You wouldn't just dive into any old pool of water without knowing how deep it was, would you? (In case you didn't know - you shouldn't do that). Any piece of real estate wanting to be sold to a TIC group shouldn't just be snapped up without a second thought. You need to know the TIC market risk for that particular piece of real estate.

In one sense, assessing the TIC market risk of a piece of real estate is like trying to pick a horse to bet on in a horse race. What is the past performance?

If you wouldn't put $1 million on the nose of a horse that has always finished last in his or her last 100 races, then you shouldn't invest that same million for a building owner who has tenants that never pay their rents.

You need to do your homework in order to assess just how much of a TIC market risk the property is. What condition is it in? What is its past performance? How much does the owner have in outstanding debt?

What shape is the real estate market in that area? All of these things must be looked into not only by you, but your broker, and any legal counsel available to you.

Never Gamble More Than You Can Afford

Real estate is not as reckless of a gamble as betting on race horses, but it's nearly as bad. Just because a horse has won 10 races in a row does not mean he or she is a shoo-in to win the next race.

That's the same with real estate. You need to be really honest with yourself over your finances, in case you have to be responsible for some unseen financial problems with the property.

Unlike gambling on horses, you need to devise an exit strategy with any TIC 1031 exchanges, in case your view of the TIC market risk was way too optimistic. There should be a holding period of five to seven years, where at the end your group can try to refinance for lower payments.

Article Source: http://EzineArticles.com/?expert=Gary_K_Landry

What You Need to Know About TIC Market Risks