An added plus to harnessing TICs is that they can be set up as separate, independent limited liability corporations (LLCs). This strategy protects investors from worst-case scenarios, such as discovering that a property has a toxic dumping problem, for example, that it is going to cost twice as much to clean up as the property is worth. “The [liability] should stay in that property,” says Mendell. When an LLC is correctly structured, the investor’s other assets are insulated and protected from lawsuits resulting from a problem property.

“It’s as if you had five different businesses,” Mendell says, referring to TICs. “If one business goes bankrupt, and the corporation is correctly structured, [the bankruptcy] should not affect your other businesses or your personal assets.”

In Austin, Texas, David Reue invested in three TIC exchanges. “I sold a lot in Austin that we were going to build a house on,” he says. “We had owned the lot for a few years, and it went up quite a bit in value. Finally, we elected not to build on it and to sell it instead.” Reue took the proceeds from that sale and placed it into three TIC exchanges: a shopping center called Washington Square in Texas; a student housing condo development in Provo, Utah; and a medical office building in Davis, Utah.