What are TICs and what's
so special about them?
Tenants In Common
Tenants in common co-own a property together, and are allocated a percentage of the property that makes up their individual unit.
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What does that mean?
This means that you can buy a fraction of a property with others under a special TIC contract. This allows for you to sell or leave your portion of the property to someone else, without needing to involve the rest of the owners.
Why are TICs so hot right now?
TICs are rental communities converted to home-ownership communities. These new communities are offered at 15-20% below market rate, due to the limited financing options available today. These communities are developed with everyone in mind for a harmonious community lifestyle.
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What's the difference between
TICs and Condos?
Tenants In common share one APN number. That means all the units In a TIC have one physical location and deed, but the owners hold title of a specific fraction of that property.
Tenants In common have dues like an HOA that help maintain the common areas. The TIC Agreement explains the community rules.
Currently, there are two lenders who finance TICs In Los Angeles. Financing for fractional ownership Is a new program that more lenders are adopting.
Each TIC owner pays for their own fraction of the tax bill attributable to their unit, which Is paid through their mortgage payment or thorough the TIC Agreement.
Condos have their own APN number. That means the building Is divided up Into physical parts that are mapped, numbered and have their own deed.
Condos have an established HOA that has monthly dues to maintain and manage the building and common areas. These rules can be found In the CC&Rs and HOA Docs.
Condos can be financed by most banks and lenders. There are several different programs and options to choose from Including FHA loans.
Each condo unit will get their own tax bill separate from the building and will pay through their mortgage payment or on their own.
TIC Guru:
Meet Andy Sirkin
Andy Sirkin is a real estate attorney who specializes in fractional ownership. He has paved the way for TICs since the 1980s when he bought his first property with his friends in San Francisco. They created a community together and he wrote the TIC Agreement for this community. Now, he write almost all the TIC Agreements here in Los Angeles.
What is a TIC Agreement? The TIC Agreement is the contract between all owners in a TIC Community that convey the rules of the community much like CC&Rs or HOA Docs in a condo. This agreement details how the community will handle taxes, maintenance, rules, and disputes. The TIC Agreement is what frames the community and keeps it together through its lifetime.
Fractional Loan
Today, TICs can only be financed through fractional loans. These loans allow each TIC buyer to qualify independently and sign an individual note. Each note is secured by a deed of trust covering only that owner's percentage.
Lenders
Currently there are two lenders who offer fractional loans: Sterling Bank & National Cooperative Bank. As TICs become more popular, more lenders may offer fractional loans.
Financing Options
Sterling Bank and National Cooperative Bank offer ARMs for TIC Financing. You must have at least a 10% down payment.
Note: 30 year fixed rate loans are not offered at this time.
TIC Masterclass
Online Video Tutorial
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how they came to Los Angeles?
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In purchasing a TIC home?
Tune In for the TIC Masterclass, taught on a weekly YouTube series brought to you by Lauren Biedenharn.
Meet: Lauren Biedenharn
Trusted, Tech-Savvy Real Estate.
Lauren Biedenharn Is your perfect partner when finding your new home and lifestyle. With a background In the arts and technology, she has a unique touch In her service to find and achieve your next real estate milestone. She has been a pioneer In new types of ownership from TICs, to tokenized ownership and blockchain technology.
Lauren has created a platform for any first-time homebuyer to learn and prepare for their first purchase through their medium of choice. Lauren Is continuously posting new Information, fabulous house tours, and cutting edge technology virtually on social media, YouTube and In person with her clients and followers. Follow Lauren on her everyday adventures for Insider tips and fun!
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