DST Vs TIC, all things equal which is better?

2 Replies

Hi all, what’s the better option between a DST Vs a TIC all things being equal? Is using these fractional share investments a good “safety valve” if the purchase of a real property 1031 falls through?

Full disclosure - I'm in the DST space. Pros and Cons. Do you want to be totally hands off?

DST - no voting rights, but don't have to deal with whims of other owners, non-recourse debt, substitute 1099 reporting instead of K-1, access to institutional real estate deals and management, can typically be much more diversified geographically and in property type. In a DST, you're just dealing with the sponsor.

TIC - every investor has to be approved by the lender, you have a relationship with every other investor in the deal, voting issues, K-1 reporting, have to set up an LLC (cost to setup and maintain), could do a TIC with other investors if you didn't go the syndicated route. In a TIC, you're dealing with the sponsor and all the other investors.

There's very few sponsors that do syndicated TICs anymore.  I moved away from them a long time ago.

It's a bit too complicated to answer on a post, depends on an investors individual situation and risk tolerance and some questions needs to be asked before an answer is given ..... both are only available to accredited investors.