There are 4 common types of Tenancy-in-Common:
1. Equity Sharing
2. Fractional Ownership or Timeshare
3. Investments
4. Residential with Exclusive Occupancy
Equity Sharing TICs
Equity sharing happens when the investor and occupier each contribute to the down payment, occupier lives in the home, keeps it up, and makes the monthly payments, and the parties share the home appreciation. Andy Sirkin, a prominent TIC lawyer in San Francisco discusses this form of TIC in great detail in the article (http://andysirkin.com/HTMLArticle.cfm?Article=5) Topics include: ownership and possession, financial contributions, repair and improvement, and owners' rights at the end of the equity share. Currently, San Jose has an equity share program for teachers. The city will put down a percentage of the down payment. When that teacher sells that house, the city gets that same percentage of the equity back. An equity-share agreement is usually around $2000.
Fractional Ownership TICs
We are most familiar with vacation TICs under the name Timeshare. Timeshare’s younger cousin, Vacation Fractional Ownerships enable the buyer to purchase only the amount of time that they will use the property whether it be 1 week or several months per year. Concierge services will store the buyer’s personal items and place them out before they arrive. Some will even stock the refrigerator and pantry before the owner arrives to enjoy their time.
Investment TICs
This type of TIC is usually done by people who already have income property. They do a 1031 exchange (§1031 of the Internal Revenue code of 1986) into a TIC with other like-minded investors into a new-to-them property. They derive tax-benefits while obtaining an income from the property. For Investment-type TICs and other Real Estate Based Investments See the Ambar Financial Website. http://www.ambarfinancial.com .
Residential TICs- Exclusive Occupancy
This type of TIC allows a Buyer to purchase a building with friends, coworkers, or family members with less than it takes to get a similar size in a single family house. There are specific mortgage and legal agreements that make this work. TICs are better then ever, because of the Fractional loans that are available. These great alternative loans are available through conventional banks and have proven more stable then conventional mortgages with 0% default rates. Andy Sirkin, a prominent TIC lawyer in San Francisco discusses this form of home ownership in great detail on his website: (http://andysirkin.com/Index.cfm?Page=13). A TIC agreement is usually less than $2000.
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