The following are answers to common questions about TICs. Please contact me for more in depth answers. Anthony Koutsos 415-218-2539 anthony.koutsos@gmail.com
What is a TIC? A form of property ownership where you own an interest in a multi unit building along with one or more co-owners with a written agreement in place that allows each owner to have exclusive use of particular parts of the building.
What about financing? Frational loans are now available to TIC owners through a handful of Banks, rates are about one percent higher than Condo Loans and all lenders currently charge a one point origination fee (one percent of your loan amount up front), these loans go up to 90% LTV and are assumable. TICs are now easier to buy and sell and the risk assosiated with a group loan is removed.
What are the risks? Since there is one tax bill for the building if a co-owner defaults the entire group is in default. A well written TIC agreement is the best way to minimize risk. It will have a provision that allows the co-owners to sell the defaulting owner's interest. Defaults are extremely rare.
Please go to the links below to read comprehensive articles about TICs written by the top San Francisco TIC attorneys: