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Interview each of the agents who answered your question here :) My team and I can help you sell your BMR unit. Call or email to schedule an interview. - Tue May 13 2008, 17:11

Excellent "specific" answers below.... a broader answer... if you buy in a slower market (now), in the less desirable part of town (south side instead of north side) you will have an easier time finding a "deal". Then, when the market heats up again, and Buyers can't cherry pick only the best properties in only the best locations (as they are doing now), you will see your south side prices rise proportionately higher.

A simplistic scenario.... let's say a home is now worth $1 million on the North side... but you find the same home on the South side and negotiate a $850k purchase price (you have no negotiation power on the north side because there are too many Buyers willing to pay the price - but you have tons of neogtiation power on the south side because you have little competition). Later, the market is up 10% so the North sider sells for $1.1 million, but with Buyers swarming all over, they spread out to the South Side and think the same house for $1 million is a steal. In this scenario you get a 17.5% gain vs. a 10% gain.

In hot markets buyers spread out... the hotter the market, the further out they go. As the market slows, everything contracts again. The best properties in the best locations maintain their value the most ... (as your question implies), but you can "buy" your future appreciation in a slower market if you are a saavy buyer. - Tue May 13 2008, 17:08

Tom,

What is your specific 'screening' concern?? Care to share??

If it's financial, the lending market is so tight right now that someone who is a financially risky partner won't get a loan any way.... the banks will do the screening for you whether or not the TIC agreement stipulates that you can see their finances. And if it's whether or not they are someone you're willing to live in the same building with, then you've got an even greater problem in a Condo building where no one screens anyone.

Hence my question... what are your concerns about partners in a TIC?

I know many, many, many Realtors here in town who think you have to screen your TIC partners... or else. But or else what? I've yet to hear an answer that would scare me, so I think they're being way too cautious. But that's great news for anyone willing to include TIC's in 3+ unit building because that fear keeps prices low giving you far great purchasing power and purchase options.

Meanwhile, the fear is largely gone with 2-unit buildings AND many think they are "deals" or investment opportunities. But... when "many" see anything... that's high 'demand'... so now prices on 2-unit building TIC flats practically match equivalent Condos. So... if you haven't been happy with what you found with Condos, I don't think you're going to find anything more appealing by including 2-unit buildings.

To get more bang for your buck, and more optionss, you're going to need to include TIC's in 3+ unit buildings. The catch is the difficulty to convert to Condos... or rather the extreme length of time in most cases (around 10 years instead of 2 years for a 2-unit).

But do you really need it to be a Condo if you can get your own loan, have exclusive rights to your apartment, can buy a much larger and nicer place for the money, can sell whenever you want to whoever you want.... and in many cases have the right to meet and screen your future neighbors when you can't do that in a Condo?

With fractional financing, and many years of perfecting TIC agreements by the lawyers Jed mentions below, the differences btwn TIC's and Condos have shrunk considerably... as has the supposed risk. Not everyone agrees... yet... and until they do... prices will stay lower, and those who are less risk averse will find far great "deals" and options. As the market gets more and more comfortable with TIC's.... which I believe they will.... the price gap between them and Condos will narrow.

So... my question back to you.... what is the "critical importance of screening"??? What risks are you hoping to avoid? What's the worst that can happen... and is it really that much better in a Condo? And how much of a price difference on a TIC in a 3+ unit building would you need to help you live with the "risk"? - Tue May 13 2008, 16:22

Aaron - drop me a line at rob AT sfishome DOT com. I know several money investors in various flip projects in the city who would be happy to get involved in another if it pencils out. - Wed Apr 16 2008, 17:58

Not to be too presumptive, but my guess is that the SELLER was the first to be upset. After all, you live right next door. It's possible that the Seller wrote that if a neighbor or someone they knew bought the home that they'd get to pay a lower overall commission.... and if you know the Seller, it's possible the Seller even named names.... and put your name in the agreement... so that if you bought they owed less of a commission.

Now I'm not a lawyer so I won't even attempt the right and wrong of it from the Seller & Listing Agent's point of view, but yes, YOU, the Buyer have every right to get any representation you want unless you were a party to the Listing Agreement which it sounds like you know nothing about. However, if the Seller spelled this out with their Listing Agent, THEY (the Seller and Listing Agent) should have dealt with the issue as soon as your offer came in. Sounds like a case of "too bad" for the Listing Agent. - Wed Apr 16 2008, 17:23