Tenants in Common

(continued)

An experienced lawyer in TIC formation along with a TIC mortgage facilitator can guide potential tenants in common in developing an appropriate structure tailored to the requirements of their particular group and property. This will be documented in a written TIC agreement. The primary goals should be eliminating friction among TIC owners, maximizing re-sale marketability of TIC shares, and where appropriate, facilitating condominium conversion.

With the recent availability of “fractional interest” financing, each owner can sell his/her interest more easily, first refusal rights may apply. Prior to this financing option a “blanket mortgage” was required with each percentage owner obligated to the entire debt. That said, in some cases a group mortgage still maintains an advantage with regard to interest rate. Bridge Capital seeks to offer potential TIC owners more options with regard to financing.

Important financial considerations:

1. Do you market the property with a blanket loan or fractional loans?
2. In this changing financial market place wouldn’t you rather have three or four lenders bid the financing for your project in stead of just one?

In summary, tenants in common is not a class of real estate, but a creative way of conveying to multiple owners using a detailed tenants in common ownership structure. By selling the units fractionally, the apartment yields a much higher price. The buyers benefit by obtaining more affordable housing. Each new co-owner has an exclusive right to a particular area of the property.

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Please give me a call if I can assist with financing options. I began financing TIC projects in San Francisco more than ten years ago. My company can also assist with tenant in common financing financing for other types of commercial real estate.

T. Budd Fletcher - Bridge Capital CRES
425 Capitola Ave #4
Capitola, CA 95010

(831) 239-8504
or
bridgecapital@gmail.com