What are my exit options? 

Four common paths exist as exit options for your appreciated real estate:

1. PAY TAXES Sell the property and pay taxes on the appreciation realized in the property. 

2. SOLE OWNERSHIP Exchange the property for another property maintaining 100% ownership.

3. TIC OWNERSHIP Exchange into a TIC-structured property, owning a fractional interest in real property

4. Set up a STRUCTURED SALE.

Pros of Sole Ownership 

1. You are able to defer capital gains taxes on appreciated real estate IF IRS guidelines are followed. 
2. You are able to remain in an active management role in the property.
3. Sole Ownership of property might involve lower fees, if you are not taking compensation for your time.

Cons of Sole Ownership

1. You may find it difficult to located and close on real property within strict 1031 guidelines.
2. You may find it difficult to geographically find a property with a manageable distance.
3. Institutional quality properties cost more than the typical investor can afford.

Pros of TIC Ownership

1. You are able to defer capital gains if guidelines are followed.
2. TIC investments provide simplicity by eliminating many of the headaches associated with active management.
3. TIC ownership allows you the ability to diversify your 1031 exchange into professionally managed multiple properties. 
4. You may be able to own larger, institutional grade real estate.  You can use leverage to build wealth.
5. Cash Flow from operations is typically paid monthly
6. You are often able to move from a secured, recourse loan to a more desirable non-recourse loan with TIC properties

Cons of TIC's

1. Fees are sometimes higher that typical real estate. 
2. TIC Investments are illiquid.  See the typical exit paths from TICs here
3. No day-to-day management.  While this has great appeal to many investors, those active investors that like to plunge toilets and chase down rent checks will want more input and control. 

Pros of Structure Settlement

1. Unique structure allows the seller of an asset to pay taxes over time. 
2. Payments are guaranteed by a high credit quality alternate obligor, who accepts assignment of the buyers payment obligation.
3. Transactions can currently be done as small as $100,000

Cons of Structured Settlement

1. Capital gain is still recognized with each payment received.
2. Interest is taxed annually, even in years during the contract where no installment payments are received.
3. The main selling point of Structured Settlements has always been that you could create a continuing stream of income without management worries.  Before TIC's and Revenue Procedure 2002-22 in 2002, the only way to do this with a 1031 was to buy a high quality Triple Net Lease property leased to a national credit tenant, but these properties are hard to find and typically start at a Million Dollars.  With TIC's, we can now do the exact dollar amount needed, with institutional grade properties, and no management headaches.  Payments are not taxed as capital gains, and are in fact mostly sheltered through depreciation, and leverage can be used to build wealth.