What are the Risks Associated with TIC and DST Investment Properties?
• Leasing Risk- Tenants may vacate the space and there can be no assurance that new tenants can be found in a timely manner • Market Risk- Real estate values fluctuate and there is no assurance against loss in the future. • Liquidity Risk- There is no secondary market to sell your interests and there is no assurance that a property can be sold in a timely manner. • Management Risk- Investors will rely on the expertise of the property manager • Lack of Control- Investors will give up a certain level of control with these types of programs • Interest Rate Risk- A rise in interest rates could negatively affect cash flow and property values • Exchange Risk- the IRS could disallow an exchange if the structure is deemed to be a partnership and not a fractional ownership. • Capital Call- If cash flow and reserve amounts are not enough to cover capital expenditures, investors may have to make additional contributions into the property What is Non-Recourse Financing? Non-Recourse Financing is a
