Tenant in Common (TIC) vs. Syndication: Which Fits an Apartment Deal?
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In a tenant-in-common (TIC) deal, each investor holds a deeded, undivided fractional share of the building itself. In a syndication, investors hold membership interests in an LLC that owns the building, and the sponsor manages it. The choice changes who can decide, how the loan works and which investors the deal suits.
What is a tenant-in-common deal?
In a TIC deal, two or more people own one property together, each holding an undivided fractional interest on the deed. Each owner can sell or leave their share to heirs, subject to any co-ownership agreement. The IRS set out conditions under which a TIC interest is treated as real estate rather than a partnership interest for a 1031 exchange in Revenue Procedure 2002-22, including a cap on the number of owners and limits on the owners' powers. That is why TIC deals mostly appeal to investors selling other property who want to defer tax. See DST vs. syndication for a 1031 exchange.
How is a syndication different?
A syndication puts the building in an LLC. Investors are members, the sponsor is the manager, and the operating agreement sets distributions, voting and exits. Investors hold no title to the building, and the LLC is usually taxed as a partnership, with a K-1 for each investor. See how syndication works.
Which is easier to finance?
A syndication is usually easier. A lender sees one borrower, one set of documents and a manager with authority to sign. With TIC, the lender must deal with several owners, each with a separate interest, and many lenders avoid it or require a structure that holds the owners in a single entity, which can undermine the reason for choosing TIC. Check the lender's rules for co-ownership before you commit. See apartment loan types.
Who makes decisions?
In a syndication, the manager runs the property and the agreement lists the major decisions that need investor consent. In a TIC deal, the owners usually have to agree on major decisions, which gives each investor a veto and slows a sale or refinance. Many TIC deals appoint a manager, but the more control the sponsor holds, the more the arrangement resembles a syndication.
Is a TIC interest a security?
Often yes. When a sponsor packages TIC interests and sells them to passive investors who rely on the sponsor to run the property, the offering can be a security, and sponsors commonly use Regulation D. Whether yours is a security is a question for a securities attorney. See what is Regulation D.
Which should a sponsor choose?
For most sponsors raising from friends and followers, a syndication is the practical choice: one borrower, one operating agreement, one K-1 per investor and a clear way to run the building. TIC fits a narrower case, usually a small group of investors who each need to hold real estate directly. If an investor asks about TIC, ask what they need it for, then compare the full cost, including legal and loan terms.
How DoorRaise fits in
DoorRaise helps sponsors raise equity for apartment buildings from their friends and followers under Rule 506(b) or 506(c), and verifies that every investor is accredited before they sign. Investors fund by wire into the deal's escrow account at Enterprise Bank & Trust. Sponsors pay a $1,500 setup fee (non-refundable) and a flat $5,000 a year administration fee; see pricing or how it works.
FAQ
Is a TIC the same as a joint venture?
No. A TIC is a form of ownership of the property. A joint venture is an agreement between partners, often through an entity. See joint venture vs. syndication.
Can a TIC owner sell their share alone?
Generally yes, subject to the co-ownership agreement, which often limits sales or gives other owners a first chance.
Do TIC owners get K-1s?
Not when the IRS treats them as owning real property directly; they report their share of income on their own returns. A syndication LLC taxed as a partnership issues K-1s.
Can I use TIC for a 1031 exchange?
It can be used if the structure meets the IRS conditions. Talk to a qualified intermediary and a CPA first.
Sources
This article is general information as of November 2026, not legal, tax or investment advice. Examples are illustrations, not projections. Talk to a securities attorney and a CPA about your deal. DoorRaise is not a law firm, broker-dealer, investment adviser or funding portal.