What is it?
A TIC works very similarly to a condo community and typically includes shared expenses and an HOA structure, with the main difference being how ownership is held on title. These are usually small apartment buildings or bungalow-style properties (typically 4–8 units) that have been converted into what’s called a tenancy-in-common. In this structure, multiple people jointly own the property, with each owner holding a distinct, transferable percentage interest while also having exclusive rights to occupy and use a specific unit. Well-written TIC agreements allow each owner can sell or transfer their share independently, without needing the consent of the other owners. Additionally, most current TIC agreements are designed so that if one owner defaults on their mortgage, it does not create financial risk for the others.
Why do I love them?
• Lower cost of entry for turn-key than a single family home or even regular condos in high-cost neighborhoods.
• Reap the benefits of homeownership...They appreciate in value! My colleague helped a client purchase a unit in a beautiful historic 4-plex two years ago and her unit has already gone up by more than $120,000.
• Preservation of historic architecture... Instead of an investor ripping down older, more unique buildings, these smaller apartment buildings are being preserved and offered at great prices in high cost areas allowing renters to become owners.
• Outdoor space! Many TIC units have some kind of outdoor space beyond just a balcony.
• Lower maintenance, low HOAs, less owners to deal with - smaller is better! Many owners of condos in larger buildings have to deal with sudden assessments due to maintenance and amenities that they don’t use like pools, big garages, etc. TIC communities are smaller which means less HOA price hikes.
• If you want turn-key in amazing locations at unbeatable prices as either a first time homebuyer or investor / landlord who wants less maintenance and upkeep, do not hesitate to start with a TIC. Many TIC properties do NOT have rental restrictions!
What's the catch?
There are few banks that offer mortgages on TIC properties in California because you have to get what’s called a “fractional loan” because of the way TIC properties are held on title, as explained above. For more information we can connect you to a lender to give you all the details based on your individual situation.
Christine Craven
DRE 02134343
(323) 452-1787
christine@christinecravenhomes.com