Home Buying in Pacific Beach>Question Details

Breanne Brehm, Renter in Honolulu, HI

What does own 1/8 ownership mean???

Asked by Breanne Brehm, Honolulu, HI Sun Mar 31, 2013

I saw this on a gorgeous house listed for 100000 and so does this mean I share the house with 7 other people like a time share or...???

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This question was asked from this property: http://www.trulia.com/property/3078165536-835-Felspar-St-San…

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15
Hi Breanne,

It's referring to the type of ownership interest in the property. With this particular property, title is held as Tenants In Common. That means you can become owner of as little as 1/8 of the property. You would have the right to use the property, presumably a single unit of an 8-unit complex, and can sell your interest at any time. If you were to acquire all 8 interests, you would be sole owner of the entire property. This is not the normal way to hold title to a property, when you intend to own a condo.

ROYCE E. KEMP | Premiere Properties
c: 858-480-5570 f: 888-839-8898
http://www.RoyceKemp.com
DRE Lic#01920485
2 votes Thank Flag Link Sun Mar 31, 2013
The 1/8 ownership is another term for fractional ownership which is common in the beach area...
0 votes Thank Flag Link Tue Dec 10, 2013
Be sure this has been legally documented as a TIC/Fractional Ownership and is zoned accordingly. We are in the process of developing such a property and it took us 11 years and 17 entitlements to do so. There's a lot of hair on these types of deals. Proceed with caution.
0 votes Thank Flag Link Wed Apr 3, 2013
Each owner has approximately 6 and a half weeks per year. Call me at 619 813-8233 for details on this tremendous vacation, fully furnished newer home less than two blocks to the ocean!
Cordially,
Pat Park
0 votes Thank Flag Link Wed Apr 3, 2013
835 Felspar St is a fractional ownership listing with the list price of $100,000 being for 1/8th ownership or roughly 6 1/2 weeks per year (1 week every 8 weeks) so time can vary, not a set time of year. There is 1/8th to3/8th's ownership currently available. It is fully furnished and equipped, located less than 2 block to the beach. The condo fees are $225/month for 1/8th ownership. Please let me know if you would like additional information or I can answer any specific questions. Thank you for your inquiry
0 votes Thank Flag Link Mon Apr 1, 2013
Hi Breanne,
There are some wrong answers on here, so I wanted to be clear for you: This is a fractional ownership, meaning you can buy 1/8 of the ownership of this condo for $100,000.00 (so in essence, they are stating that this condo is worth $800,000 total). It is kind of like a timeshare. You would most likely be entitled to about six and a half weeks a year depending on what agreements there are in place. There is also an opportunity to buy more shares of the home. I don't think this is what you are looking for, but it's important to ask these questions and get right answers! Feel free to contact me directly.

Thanks!
Sinead McAllister-Clifford
Real Estate Broker/ Realtor®

McAllister Homes Real Estate
Residential Sales & Property Management
http://www.McAllisterHomes.com
License 01366009
858-205-5215 CELL
brokermcallister@gmail.com EMAIL
0 votes Thank Flag Link Mon Apr 1, 2013
Yes, it is Fractional Ownership. There are a lot of Condos in Fl that are Sold with these terms. Like getting 6 weeks out of the year instead of 1 or 2 for Timeshare Properties.
0 votes Thank Flag Link Mon Apr 1, 2013
I would think 1/8 interest means there are 7 other units in the community 8 including the one you own.

I'm a realtor in Coronado and I work throughout San Diego. I am very familiar with the areas you are considering and would love to assist you in finding a perfect home. Please feel free to email me sandra.seader@gmail.com or call 303-217-6540. I can get you in touch with a lender and do a rent vs buy portfolio for you. Additionally, I can send you an MLS search customized with your real estate needs just so you can view properties, prices and images to familiarize yourself with what's available in the area. I would love to work with you and look forward to hearing back soon!
0 votes Thank Flag Link Mon Apr 1, 2013
Hi Breanne,

It sounds like a 1/8 interest in a property, meaning there are 7 other units in an 8-unit complex, and you would have the other eighth.

If you're looking at a house, it probably means you'd be sharing ownership with others, an equity sharing situation. Equity sharing is often done with investment properties, where each owner would have a certain percentage of interest in the property. It could be split evenly, or maybe one person took the risk of the loan, so they'd get extra interest in the property, or maybe one person had a higher down payment, so their share would be larger, etc. Owners are often Tenants in Common in this this type of ownership.

For example, if you and two friends bough a house together, and you all had the same down payment, you would have 1/3 ownership.

Hope that helps!

Cory
0 votes Thank Flag Link Mon Apr 1, 2013
Hi,

This is called "fractional ownership" meaning that you are entitled to 1/8 of the time per year in this unit, it's not a bad deal in the sense that that condo would probably sell for about $725-750K in this current market. You would be giving it a valuation of $800K since it's $100K times 8 owners. That's not too bad...many of these fractional ownership situations have valuations that are 200% of true value.

What is important is: 1) how this time is split up, 2) your monthly fees/taxes, 3) any limitations on usage.

I would be glad to look into all of this for you. Feel free to contact me at:

Frederick Remick
Keller Williams RE
619-519-3287
http://www.remickhomes.com
0 votes Thank Flag Link Mon Apr 1, 2013
When you see this type ownership mentioned, more than likely it is a condo complex. It simply means that you own your own property and the space around it which includes the land, the recreation areas, such as pool, Jacuzzi, tennis courts, etc., you only own a fractional percentage of those areas.
0 votes Thank Flag Link Mon Apr 1, 2013
This would be different than a time share, but yes, you would own it with 7 other parties. You would each own the entire property equally and split all expenses such as taxes, insurance, hoa, maintenance ect. You would actually OWN the unit and be on title where as a time share you would own the right to use it during that time but have no responsibility to pay other expenses.

Typically this type of ownership would be used if friends or family members were to buy a property together (usually a vacation type property). In those cases you would all agree upon who gets to use it when. When buying into a "tenants in common" type situation, be sure to know what has already been agreed upon for usage. If it is set in stone for specific dates or if it is flexible (Like rotating out holidays).

You may also have the future options of buying more "shares" if the other parties were willing to sell.

Hope this helps and good luck.

~Cassandra
0 votes Thank Flag Link Sun Mar 31, 2013
I have a friend who once got together with eleven other friends and bought a condo in a vacation area. Over time, since their agreement gave the other owners the right of first refusal, he acquired two more shares when the original owners wanted to sell. Each share equated to one month’s use. Over time, he disposed of all of his shares.

You could purchase 1/8 ownership or more. If you only bought 1/8 you would have to make arrangements with the owners of the other 7/8 to share the time that you could use the property. There could be one owner who owns the other 7/8 or there could be several owners. You would not be buying “time” to use a property as you would be in a timeshare, you would be buying a fractional ownership of the entire property. In function, yes, similar to a timeshare.

The point is that the owners make their own agreement of how the time is split up among the owners. There is also the overriding rules of the homeowners association…assuming the property is in a “community”.

It is a concept that will work for some and not others.
0 votes Thank Flag Link Sun Mar 31, 2013
You've got it correct. You are sharing ownership with 7 other parties. This is a common scenario for vacation homes where each books the property a certain number of weeks or months each year.
0 votes Thank Flag Link Sun Mar 31, 2013
That's right. It is pretty confusing and misleading when looking for a home to be so happy to see a great price only to find out it is fractional ownership. This ownership arrangement makes sense for someone who wants to have a regular part-time home at a special location
0 votes Thank Flag Link Sun Mar 31, 2013
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