Real Estate Sponsor

A Sponsor is a real estate investment company that: structure TIC Investment properties for purchase by individual Investors, sources the property, perform initial property due diligence, arrange the asset and property management along with financing, and offer the property to Broker/Dealers for participation by Broker/Dealer clients.

• A Sponsor will acquire institutional quality properties available in various geographical locations. This process of acquiring institutional properties often requires significant financial resources and management expertise.

• A Sponsor performs extensive due diligence on a property before a commitment to purchase the property is made.

• Investors benefit from Sponsors packaging institutional properties so that investors/exchangers may participate in owning a larger property that may not be available to them on their own.

• Financing typically consists of a nonrecourse loan to the investors/exchangers. In a TIC transaction, each co-owner will be required to individually qualify for their share of the debt in the property.

• An institutional property owned by co-owners requires daily property management, which is typically supplied directly by the Sponsor or by a professional third party. TIC owners receive updates on the investment through regular reports, including: payment of distributed cash flow, year-end tax documentation, and overall property performance.

Broker Dealer (B/D)
B/Ds “engage in the business of effecting securities transactions for the account of others,” as defined by the Securities & Exchange Act of 1934.

• A securities B/D is responsible for assessing the Investor’s suitability for the TIC investment and for making recommendations, according to a familiarity, with the Investor’s financial resources, risk tolerance and investment experience.

• B/Ds operate within self regulatory organization guidelines to ensure all Investors are protected and are well advised throughout the investment process.

• After extensive due diligence, if a B/D deems that an investment opportunity is something that Investors might be interested in, the B/D can approve the offering and then offer the B/D approved investment through their network of Registered Representatives.

• B/Ds are paid a commission by the Sponsor based on the equity invested by their clients.

Registered Representative (REP)
Registered Representatives are individuals who have received their securities licenses and who are registered to offer securities to qualified Investors.  An informed Representative (Rep) can provide an Investor access to many TIC structured properties.  The Rep can help Investors understand the property fundamentals and advise them regarding market characteristics.  TIC opportunities are available in all real estate asset classes in multiple markets by many different Sponsors, and investors should investigate as many alternatives as possible before arriving at a decision.  A Rep can assist the Investor during their 45-day window by introducing many properties and TIC opportunities otherwise unknown to the Investor.

• Reps are the Investor’s first source of information on available TIC properties, potential options and specific information regarding each investment opportunity.

• Reps are there to understand the Investor’s goals, objectives and risk profile to ensure that investment opportunities presented meet the Investors’ needs.

• Reps are compensated based on a percentage of the commissions earned by the B/D which are paid by the Sponsor.

Investors
Investors must meet two conditions to invest in any TIC offering. 

Investors:

1. Must be accredited and should understand the risks associated with investing in real estate.
2. Must have a preexisting, substantive relationship with their Representative or B/D prior to reviewing any TIC offerings.

Once these conditions are met, Investors work with their Representative to review and understand available investment opportunities.

A TIC Investment is offered by means of a Private Placement Memorandum (PPM). The PPM is a highly detailed, stand-alone document that allows an investor to make an informed and educated decision.  The PPM is a legal document prepared by the Sponsor outlining and disclosing the terms of the investment, the associated risks and a description of the property.

An Investor must evidence, in writing, that they have thoroughly reviewed the PPM before they are permitted to invest.

By sharing goals, objectives and risk profile with their Representative, the educated Investor ensures all investment opportunities presented to them meet their investment needs.