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Types of Investments

These are the four common investment structures we use to own investment real estate

Limited Liability Company

LLC

The property is usually held in a Limited Liability Company (“LLC”), General or Limited Partnership structure, usually domiciled in Delaware. These entities are reported as a partnership for tax purposes and the members of the LLC receive a K-1 partnership tax return for federal and state income taxes.

Delaware

Statutory Trust

DST

An investment structure used for a single asset or portfolio of assets. The DST qualifies for IRS 1031 exchange as like kind property.  Investors report their investment on Schedule E as direct real estate investment in the federal tax returns

Tenant In

Common

TIC

Direct ownership with up to 35 direct owners used for a single asset or portfolio of assets.  TIC usually qualifies for IRS 1031 exchange as like kind property.  Investors report their investment on Schedule E as direct real estate investment in the federal tax returns.

Private Real Estate Investment Trust (REIT)

An investment structure that is a “pass through” entity, meaning it is a disregarded entity from tax and IRS perspective.  Investors receive a 1099 for the dividends received each year.