Anyone have experience co-owning a property as a Tenancy in Common (TIC)?

By TIC I am referring to the type of arrangement at the top of this page:
http://www.new-york-new-york-real-estate.com/t1.html

I own 2 row houses in Brooklyn and have started to think about how to lessen the stress by co-owning and, hopefully, make some money… The main obstacles I see are:

1) Finding a co-owner who trusts me and whom I trust
2) Financing

I figure I’d have a lawyer to help hash out mutually agreeable terms for handling repairs, any maintenance money, mortgage payment, subletting, etc.

Does anyone co-own property as a Tenancy in Common? If so, did you know your co-owners prior to purchasing? Was it difficult to get financing? Were there any unexpected difficulties? Any insights would be appreciated.

Thanks!

PS: I have seen the forum thread from 2007 and was hoping for updated comments/info.

fritz

in Real Estate - General 13 years and 9 months ago

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dylanfan | 13 years and 9 months ago

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Can’t speak from experience, because I *almost* bought a house TIC and then in the downturn my potential partners found they could buy one on their own, and I went on to another project. But I found my partners on this site, and it was in late 2007, so I think I was part of that conversation. I believe the lawyer CMU refers to is Zerline Goodman, in Brooklyn Heights. My potential partners and I went to see her to hammer out the legal specifics as we were about to buy one house. She is very good, and very patient. Found her on this site too. From my “almost” experience, I think what you want to do is possible with the right people. Also, we were told that after a set amount of years (I believe five) you can turn the place into two condos at a cost much less than if you were to do that at the outset. We probably would have done so, as it would have made separate sales easier down the line. But you have to find someone who is committed to at least five years.

fritz | 13 years and 9 months ago

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thanks for the input bklnite, I’ll be in touch (thanks for clarifying the photo!).

elbow, the properties are both 4 storey brick rowhouses, one located on the Clinton Hill border and the other in Bed-Stuy (Nostrand/Fulton), and are a 2 and 3 family respectively.

elbow | 13 years and 9 months ago

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I’ve bought a few properties as tenanciy in common but with someone I’ve known and worked with for a long, long time.  I’ve also gone the LLC route.  I’m dependable and keep my word and work when necessary on upgrading or leasing properties, as does my business partner.  The only place we’ve ever had problems is when he’s wanted to sell and I haven’t, I ended up caving because the properties worked best under the TIC.  WHere are your properties located?

Bklnite | 13 years and 9 months ago

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Fritz,

I’m assuming you live in one of the 2 rowhouses you own. I’ve been looking for some time for an investment property that could double as future downsizing opportunity. I’d like to know more, and see if there’s a deal (whether it’s TIC on one of the properties or an old fashioned sale) that might work for both of us. Another option aside from TIC is to set up an LLC as the owning entity. That’s more typically done for rental properties where you’re required to get commercial financing (5+ units). For 4 (or fewer) family properties, if you want to get 30yr fannie/freddy residential financing you need individuals (not an entity like an LLC) on the loan.

If you’d like to discuss, please email bklnite@gmail.com and I’ll reply with a phone # and we can talk.

needmtg | 13 years and 9 months ago

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No, br, I went about half the distance with 2 people (interestingly, both had lived in CA) but ultimately no go. I refi-ed and bought my x out, which is why I was trying the TIC.

Your point about banking may be correct, though Adam said having unrelated people on the same loan was not an issue. Only becomes one when one partner wants to sell, as you have to refinance with new owner. Agree it’s a hassle here. OP, I know of two TICs which are 1-siblings and 2-mother-son, and have heard of a couple with partners who went in together to buy a place. Maybe attracting a new partner is more difficult. Good luck. I know of a good TIC attorney if you need one.

fritz | 13 years and 9 months ago

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I don’t necessarily see TIC as inviting potential problems — it’s more an opportunity to leverage the property I already own while sharing the responsibilities (financial and upkeep) of home ownership. I can’t afford a property manager. I can manage the houses myself but would ideally SHARE that stress.

As I said, I’ve seen the Forum threads about this but they’re several years old. I remember a time not that long ago when condos were almost unheard of in NYC and I couldn’t understand that either. So I’ve been wondering if the thinking had changed at all about TICs and just wanted to see if anyone out there had done it successfully.

Boerumresident | 13 years and 9 months ago

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Also, in the forum, I can only see the title of the questions when I click through, not the actual text of the question.  Does anyone else have this problem?

Boerumresident | 13 years and 9 months ago

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CMU, I thought you finally found a place and went the TIC route? 

There is more of a banking infrastructure in Calfironia to handle TICs (including novation issues when one co-tenant sells its interest).

For the OP — is it the hassle of maintaining the properties that is making you look for an co-owner?  In that case, I’d just hire a proeprty manager.  Your income might be less than if the properties were TICs with shared maintenance responsibilities, but the legal and other hassles of TICs would be avoided.

needmtg | 13 years and 9 months ago

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See many previous posts on this issue (assuming search in archive works). In a nutshell, NYawkers mirror what dibs says above, they’re untrusting and risk-averse. In SF, TIC ownership is pretty widespread, which also means there’s a secondary market for part-ownership which does not exist here. That’s the main issue. I had a TIC for 10 years in SF, no problems and easiest real-estate transactions I ever did. I tried here and went nowhere.

daveinbedstuy | 13 years and 9 months ago

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Why invite unknown potential prroblems in with a new owner?  You’re going about this the wrong way.  If you have known and trusted someone for many years you might decide to own properties together and then look for them.

If you’re looking for some $$$, sell one of them.

With a TIC , and one you haven’t known long, you run the risk that they might, at some point, force the sale of the entire propoerty

interested in hearing others’ view on this.