Who’s Involved in a 1031 or TIC Investment?
When it comes to executing a successful 1031 exchange — especially when investing in a Tenant-In-Common (TIC) structure — there’s more to it than just selling a property and buying another. A number of key players work behind the scenes to make these transactions compliant, secure, and aligned with your investment goals.
Understanding who does what in a 1031/TIC transaction helps investors feel more confident and informed. Whether you’re new to the process or just want a better grasp of how everything fits together, here’s a look at the major participants you’ll encounter.
1. The Accredited Investor
At the center of every TIC investment is the investor — usually someone classified as an accredited investor by the SEC.
To qualify, you must meet at least one of the following:
Have a net worth over $1 million, either individually or jointly with a spouse (excluding your primary residence)
Earn over $200,000 per year individually, or $300,000 with a spouse, for the past two years, with a reasonable expectation of earning the same this year
Most TIC offerings and many real estate-based securities are only available to accredited investors due to regulatory guidelines. This standard helps ensure participants are financially sophisticated and capable of understanding the risks involved.
2. Qualified Intermediary (QI)
A Qualified Intermediary, or QI, plays a critical role in any 1031 exchange.
When you sell your property, the IRS prohibits you from receiving the cash directly. Instead, a QI holds the funds in a segregated trust account on your behalf. They act as a middleman, managing the proceeds and disbursing them only when you close on a new, qualifying replacement property.
The QI ensures the exchange stays compliant with IRS rules — including the 45-day identification period and 180-day closing deadline.
3. Broker-Dealer and Registered Representatives
A broker-dealer is a licensed firm that can sell securities to investors, including TIC or DST interests. They often work with Registered Representatives, who are licensed professionals trained to help investors evaluate opportunities.
These reps don’t just sell — they also perform due diligence on the sponsors, help match investors with suitable offerings, and ensure that each deal aligns with the investor’s financial objectives, risk tolerance, and income needs.
Think of them as your guide to the investment marketplace.
4. The TIC Sponsor
Finally, there’s the TIC Sponsor — the entity behind the offering.
Sponsors are typically experienced real estate firms that:
Acquire the property
Structure the TIC investment
Arrange financing
Conduct ongoing due diligence
Raise capital from accredited investors
Manage the property and oversee operations
Handle the eventual sale to realize returns
In short, the sponsor makes the deal possible and manages the asset throughout the investment’s life cycle. Some handle property management directly, while others hire third-party firms to do so.
Bringing It All Together
While 1031 exchanges and TIC investments may seem complex, understanding the roles of each party involved makes the process much more manageable.
At ICON1031, we bring all of these players together for you — connecting you with trusted QIs, broker-dealers, and vetted sponsors to ensure your 1031 exchange is smooth, compliant, and tailored to your goals.
If you’re considering a 1031 exchange or exploring TIC investments, we’re here to help.
Schedule a free consultation and let’s build your investment strategy together.
