Methods and investment instruments for performing tax-deferred real estate exchanges

Abstract

Methods and investment instruments for investing in real estate are described wherein a portfolio of investment real estate is divided into a plurality of tenant-in-common deeds of predetermined denominations, and which are subject to a master agreement and master lease to form “deedshares.” Holders of the deedshares receive a guaranteed income stream from the master lease and yearly depreciation, without having to maintain or manage the real estate. The holders of deedshares are subject, under the master agreement, to a mechanism that enables the master tenant to purchase, or arrange for the purchase of the deedshares at fair market value (or some other calculable value) at the end of a specified term. Because the deedshares qualify as interests in investment real estate, they are eligible for tax-deferred treatment under §1031 of the Internal Revenue Code.

What is claimed is: 
     
         1 . A system for managing a plurality of investment instruments adapted for performing tax deferred exchanges of real properties comprising:
 at least one database having:
 property related database entries containing information associated with at least one real property, wherein title for the at least one real property has been divided into a plurality of part interests, each one of the plurality of part interests subject to a master agreement and a reaggregation provision; and 
 investor database entries containing information associated with holders of the plurality of part interests in the at least one real property; 
   a report generator for generating at least one of a report required by securities laws, a report on the value of the at least one real property, a report of rental income due to each of the holders of the plurality of part interests in the at least one real property and a report of information required by said holders for reporting income tax;   a communication device coupled to a network for allowing remote access to the at least one database.   
     
     
         2 . The system of  claim 1  wherein the property related database entries comprise a name and an address of the at least one real property, a current income level associated with the at least one real property and a most recent fair market value of the at least one real property. 
     
     
         3 . The system of  claim 1  wherein the investor related database entries comprise a name and address of each holder of the plurality of part interests in the at least one real property, a most recent fair market value of each holder's part interest and a current level of income provided to each holder. 
     
     
         4 . The system of  claim 1  further comprising mortgage related database entries containing information associated with mortgage indebtedness of each holder of the plurality of part interests in the at least one real property. 
     
     
         5 . The system of  claim 1  further comprising database entries containing information associated with the master agreement. 
     
     
         6 . The system of  claim 5  wherein the master agreement is a master lease, and the database entries containing information associated with the master agreement include database entries containing information associated with a master tenant. 
     
     
         7 . The system of  claim 6 , wherein the database entries containing information associated with a master tenant comprise a name and address of the master tenant, a credit rating of the master tenant, and a value of rent paid by the master tenant. 
     
     
         8 . The system of  claim 7  wherein the database includes property related database entries containing information associated with a plurality of real properties and further includes database entries containing information associated with a plurality of master tenants, each master tenant being associated with a corresponding real property. 
     
     
         9 . The system of  claim 1  wherein the part interests comprise tenant-in-common deeds. 
     
     
         10 . A computer implemented method of creating real estate investment instruments adapted for performing tax-deferred exchanges comprising:
 creating a real estate portfolio comprising at least one real property;   storing information associated with each real property in the portfolio in a computer database;   encumbering each real property in the real estate portfolio with a master agreement;   recording the master agreement with a public recording office;   dividing title in the real estate portfolio into a plurality of part interests, each of the part interests subject to a provision in the master agreement for reaggregating the plurality of part interests;   selling the part interests to a plurality of investors;   storing information associated with each of the plurality of investors in the computer database;   recording the part interests with the public recording office.   
     
     
         11 . The computer implemented method of  claim 10  wherein each of the part interests is a deedshare comprising a tenant-in-common deed to a portion of the real estate portfolio. 
     
     
         12 . The computer implemented method of  claim 11  wherein the deedshares have at least one predetermined denomination. 
     
     
         13 . The computer implemented method of  claim 11  wherein each deedshare is subject to a provision in the master agreement for reaggregating the plurality of tenant-in-common deeds after a specified interval. 
     
     
         14 . The computer implemented method of  claim 10  wherein encumbering each property in the real estate portfolio with a master agreement further comprises encumbering each property with a master lease to a master tenant who pays rent to holders of the part interests. 
     
     
         15 . The computer implemented method of  claim 14  wherein creating the plurality of part interests further comprises structuring the provision to include a put provision that allows holders of the part interests to force the master tenant to purchase their part interests at a calculable value and a call provision that allows the master tenant to force holders of the part interests to sell their part interests to the master tenant at a calculable value. 
     
     
         16 . The computer implemented method of  claim 14  wherein encumbering each property in the real estate portfolio with a master agreement further comprises including a sublease provision in the master lease enabling the master tenant to sublease the property.