Types of TIC Loans – Pros and Cons
Group loans are regular multi-unit-building or commercial loans where the parties agree to each pay their share. The parties apply for the loan together. Most groups have a joint bank account where everyone deposits their money and the money is sent every month to the lender. Back before 2007 or so, this was the norm for TICs and it was the main reason TICs were generally worth 25% less than condos. People had to consider the risk of applying for and maintaining a loan larger than they could generally support on their own with a group of other people – some of whom were likely strangers when the initial TIC was set up.
How buyers and sellers in San Francisco split the closing costs pertinent to the sale of real estate is ultimately decided in the purchase contract itself, but this list details how they are typically split in San Francisco County.
The process of closing in California is asynchronous. It is not all in one day either. So the seller signs at one time, you sign at another, the money is funded by you and by the lender and when the escrow company has everything they “release” the file to record with the county. To flush it all out, the steps look like this…
There are many parties involved in buying a home. You are already familiar with your Realtors (hopefully us!) and your lender if you are buying a home. When you have a ratified contract on either the buyer or seller side, the next person you will meet is your escrow officer. Opening escrow is the happiest moment in real estate, other than someone getting a lot of money wired to their bank account or getting the keys.
January 2020 changes to San Francisco Rent Control
SF has expanded our rent ordinance to include eviction control for every property. Previously, properties built before 1978 were entirely exempt from the rent ordinance. If you have any situation with a tenant occupied property whether in SF or elsewhere, I urge you to seek legal advice before speaking with your tenants. I am here to provide referrals for this so please reach out.
2019 Statewide Rent Control Ordinance – CAR Quick Guide
What is the Tenant Protection Act (TPA)? Effective 1-1-20, the TPA establishes, throughout all of California, a maximum amount an owner may increase a residential tenant’s rent in a 12-month period. The cap is 5% plus inflation, not to exceed 10%. There are exemptions.
Live/Work Lofts versus Regular Condos
Back in the 90s, some clever developers working with the City came up with a way to build condos with higher density than would have otherwise been allowed, in locations previously not zoned for residential and with a different set of standards than regular condos required.
What is COPA and how will it affect my 3+ unit ownership, sale or purchase?
COPA is another attempt of the City of San Francisco to regulate the free market and prevent units from being converted from rental to owner occupied use.
Why is the value of tenant occupied property in SF so low compared to the rest of the market?
Why is tenant occupied property harder to sell and less valuable than vacant property in San Francisco? There are a few different factors making tenant occupied property less valuable and/or harder to sell.
Sales with Court Confirmation Explained
Some sales state that they are subject to “court confirmation,” or you will see a “1st overbid” price stated. What does this mean?
What’s wrong with TICs? In a nutshell …
Your regular lender will not lend on a TIC. You need what is called a “fractional” loan, which is similar to what is used to buy a Co-op in NYC. For this, you need a special lender – there are several. Sterling is my go-to, Bank of Marin, NCB, Bank of SF to name a few. Please ask me for a referral.
A few words about equity sharing programs …
Last year, Mark Zuckerberg got a lot of press for his “philanthropic” funding of a company called “Landed” to help “teachers buy houses.* It is a good idea, but it is not philanthropy to co-invest funds with a home buyer in exchange for a portion of their future equity.
Pricing Strategies, Offer Timing and Pre-Emptive Offers FAQ …
In most real estate markets, sellers put their hopeful sale price on a house and wait for a buyer to come along and make an offer. In some of the most active markets, many homes are sold by pricing them just under value by a few thousand dollars to draw attention. But in San Francisco, and some of the most attractive parts of the Bay Area, homes are almost arbitrarily priced far far below value and sellers invite the buyers to compete. Many times this results in the best possible sale price and terms for the home.