Buying into a does this work?

Asked by Lawrence, San Francisco, CA Mon May 14, 2007

As someone who is new to the urban real estate scene, the whole TIC thing is completely foreign to me. From what I understand, TIC means I'm partnering with some other people to buy a place together. What are the most noticable differences between TIC and buying a place outright? What happens if one of the other owners defaults? Any help would be appreciated.

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Hien, , San Jose, CA
Mon May 14, 2007
TIC means Tenants in Common. Basically, you are purchasing a property as a joint effort with other people who are also interested in being the owner of the same piece of property. Depending on how you agree upon the term of purchase, you can have equal share in the entire property or one can have a larger share than the other. This is of course based on how much one would like to invest in at the initial stage (down payment). So let's say it's a duplex that you are purchasing, one person may have owner of one duplex and the other person will have ownership of the other duplex. The line of ownership will of course be stated in the grant deed when you record the purchase.

The main noticable differences between TIC and buying a place outright is the fact that you purchase something that is pending on someone's else interest as well. When you purchase a property outright on your own, you are entirely on your own and you don't have to consult or get agreement of anyone when you want to sell that property.

That's the simpliest explanation that I can come up with without going into technical details.
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K Wei, Agent, San Francisco, CA
Thu Jun 7, 2007
In San Francisco, Andy Sirkin is the man. Go to andysirkin dot com, and you'll find a wealth of information.
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simplenickel, Both Buyer And Seller, San Francisco, CA
Mon May 14, 2007
Put simply. You get a group mortgage with the other owners. Instead of owing your space like a condo, you own a percentage of the building. All in all, TICs are very similar to the condos on the market. The risk is in the group financing. TICs are fast becoming the affordable way to get into the market in San Francisco, so you'll be seeing a lot more of them in the future. In addition, many lenders now offer individual financing on TICs which lessens the risk. Then there is the condo-conversion process which can give you a potential 100k price appreciation if you win the condo lottery. A great resource for TICs can be found here (Andy's law firm is the authority on TICs):
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