Any tips/advice on considering a TIC?

[ysette9]

We live in a high cost of living area. We have lived further away from work in a more affordable place and commuted in and are now renting in a more expensive area closer to work. There is such a huge quality of life improvement being in the middle of everything and commuting on surface streets rather than the freeway that I don't ever want to go back. That means, however, that we have to make some compromises when it comes to purchase our next place.

With that preface, on to my question. There is almost nothing where I would really like to live in a price range that doesn't make me sick to my stomach. There is this little house on a tiny lot in a fantastic neighborhood in a fabulous school district. The house has sat on the market for a long time now in an area where it would normally sell in less than a week because 1) it needs some work but mainly 2) it is a tenancy-in-common (TIC).

I am not really familiar with TICs too much but am interested in learning more about the risks and downsides since it seems to be keeping everyone else away from what otherwise could be a decent little place for us in an area I would love to it. Experience? Tips? Questions to ask and things to look out for?

[electriceagle]

Are you in SF?

Keep in mind that TIC mortgage interest rates are higher than single family & condo interest rates because the securities that they generate are less liquid (the bank can't sell the loan to the government). Also, only a few banks write loans for TICs.

You should be able to whip out excel and figure out the single family-equivalent price on the property.

TICs also can have the same management issues as small condo associations. In addition, a sale by someone else in the association may trigger revaluation under prop 13. TIC association bylaws should prevent this from affecting you, but who knows what would happen in a sale forced by bankruptcy, etc.

[ysette9]

Interestingly this is not in the city, which is the only context in which I have seen TICs so far. This is a case of two housee on one lot that cannot be subdivided. Peninsula. That does make this situation quite unique. Good point on the financing. That wasn't something I had thought of.