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July 21, 2009
Tenancy in Common and Mortgage
We're 3 friends looking to purchase a multi-family home in brooklyn to move in and rent out the remaining apartments. We have a couple of questions:
1. We're a little confused about the legal agreement we need to protect our individual investments. tenancy in common sounds like the most common one for our situation. does anybody have experience with that in brooklyn?
2. We're planning on individual mortgages to leave the most flexibility for each partner. our bank is not familiar with the concept and pushes for a combined mortgage. any bank or lawyer that comes to mind that is familiar with a set-up like ours? thanks!
Comments
tenancy in common 'experience in brooklyn' is no different than anywhere else.
And can't imagine you are going to get separate mortgages for 1 bldg unless that bldg is already a condo.
Doesn't sound like you really know much about owning -
what do you know abou running a bldg, mechanicals, etc.
Better start reading, going to seminars, etc. before plunging ahead.
Posted by: Petebklyn at July 21, 2009 9:44 AM
email me if you want cmurthi [youknowwhat] seeinggreen.net ... I am in the process of setting up a TIC, and have done so in the past. Also know a TIC lawyer's name.
No need for seminars, don't listen to the incredible nay-sayers on this site, if one did, it'd be a miracle anyone does anything anywhere.
It's pretty straightforward if you have common sense and TRUST your partners.
Posted by: cmu at July 21, 2009 10:41 AM
TIC is very common but you won't get separate mortgages. In fact, most mortgage companies will want to see at least two of you "related."
Talk to an attorney and the mortgage company about the differences between TIC and forming a LLC.
Posted by: daveinbedstuy at July 21, 2009 11:49 AM
I second DIBS, for once--talk to an experienced attorney about forming an LLC. I say that as a tax lawyer (but not one pitching my services). Not sure it will allow you to get separate mortgages (they would have to be structured as loans to the members to acquire their interests in the LLC, secured by their interests in the LLC; no idea if banks would be willing to do that) but speaking generally it would allow a lot more flexibility, often be better for estate planning purposes, and could substantially limit your liability as well.
Posted by: toadie at July 21, 2009 12:06 PM
rob,
sorry but I have to say it..........
I have been holding my tongue for over 6 months. your comments are consistently irrelevant, childish and add nothing to the topics at hand. you are not funny and you are not cute. Please refrain from commenting on every single topic ( much of which you know nothing about) and make some room for people who actually have knowledge about real estate. I have been on this site for about 3 years and offer my experiences and opinions WHEN I ACTUALLY HAVE SOMETHING TO CONTRIBUTE. Please, if just for a day, give us all a little break from your non clever witticisms......
Posted by: owner12 at July 21, 2009 1:14 PM
To each his own. I enjoy Rob's comments, thank you very much!
Posted by: mopar at July 21, 2009 2:00 PM
I am not a naysayer and I endorse and urge people to buy.
Certainly buying a house with rentals has been great for me.
But this person really sounds clueless and I think does need reading, seminars, etc....not just for the legal ownership but in maintenance, etc.
Also, that type of ownership with partners - need to discuss many issues of control, finances, what if someone wants out, etc, etc, etc. I am fine with people doing it but need to be very up and all issues that can arise.
Posted by: Petebklyn at July 21, 2009 2:26 PM
I own my brownstone as TIC with my partner. That part is easy.
I don't think it possible for you to get separate mortgages on a single family home. It doesn't even really make much sense. What would happen if one of you stopped paying - that person's bank forecloses on 1/3 of the house?
owner12 - There are a great many people on this site who find rob amusing. I suggest you refrain from unprovoked ad hominem attacks. If you don't think he's funny - just ignore him.
Posted by: geekspice at July 21, 2009 3:28 PM
I think it's a great idea. . but. . .
I'm sure you won't get separate mortgages, for the good reasons others mention.
I also think you ar run into problems with 3 people involved.
What if one person wants to redo the facade for $200K becuase it really needs doing, but the other two don't have the dough right now?
Or one person wants to hold out for a higher rent on one of the units but the others need to get some cash flow?
It's not that simple even if you are all friends.
Also make sure to write down what happens if one person wants/needs to get out of the deal.
Posted by: ontheparkway at July 21, 2009 3:39 PM
done all the time in certain places (like nearly all of san francisco). not done so much here so people will look at you like you have your hair on fire. no need for seminars, just get the right people. one mortgage sorry to say. I think you could think about conversion to condo once the dust settles but I dont know how that's done -- I'm sure it's about finding the right people again.
Posted by: Ringo at July 21, 2009 3:51 PM
A well written LLC will stipulate all the details like what's to be done if one person needs to get out.
Posted by: daveinbedstuy at July 21, 2009 5:17 PM
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