It’s here. It’s finally happened. TIC is becoming a ‘thing’ here in Los Angeles.
SPOILER: Want to see TICs for sale in LA right now → TIC Listings
FREE TIC Brochure → TIC Brochure
It’s been a little over a year since the ‘escalator clause’ phenomenon hit East Los Angeles during the boom of Mt. Washington and Eagle Rock. That phenomenon was a hot trend in those neighborhoods, but overall Los Angeles has not caught on to the NorthWestern secret. Will L.A. catch onto this San Fran fad? or will it continue to be an under-the-radar rumor only the who-knows know of for years ;)
What is TIC and why does L.A. have it?
TIC stands for Tenants in Common. If you have ever owned a home you may have heard of Joint Tenants and Sole Proprietorship. Sole Proprietorship is what it sounds like, one person owns the property completely and can leave the property to whoever is in their will if they pass away. If this person does not have a will or descendants, that the property will be subject to probate. Joint Tenants and Tenants in Common both have multiple persons owning a property together, but there are some major differences.
“Joint Tenants must obtain equal shares of the property with the same deed at the same time. The terms of either a joint tenancy or tenancy in common are spelled out in the deed, title, or other legally binding property ownership documents. The default ownership characterization for married couples is joint tenancy in California. A joint tenancy is broken if one of the tenants sells his or her interest to another person, thus changing the ownership arrangement to a tenancy in common for all parties. tenants in common may have different ownership interests.
Tenants in Common can create a contract between the tenants to own different fractions of the property and its maintenance. For instance, Tenant A and Tenant B may each own 25 percent of the home, while Tenant C owns 50 percent of the property as a whole. Tenants in common also may be created at different times; so an individual may obtain an interest in the property years after the other individuals have entered into a tenancy in common ownership. A tenancy in common may end if one or more co-tenant buys out the others; if the property is sold and the proceeds distributed equally among the owners; or if a partition action is filed, which allows an heir inheriting the property to sell his or her stake.
One of the main differences between the two types of shared ownership is what happens to the property when one of the owners dies. When a property is owned by joint tenants with survivorship, the interest of a deceased owner automatically gets transferred to the remaining surviving owners. For example, if four joint tenants own a house and one of them dies, each of the three remaining joint tenants ends up with a one-third share of the property. This is called the right of survivorship. But tenants in common have no rights of survivorship. Unless the deceased individual’s will specifies that his or her interest in the property is to be divided among the surviving owners, a deceased tenant in common’s interest belongs to his or her estate.” (https://estate.findlaw.com/planning-an-estate/whats-the-difference-between-joint-tenants-with-survivorship-and-.html)
Los Angeles Heat
San Fran has been utilizing and marketing the TIC lifestyle for years now. Mostly because of the Tech Boom in SF, housing has been less than affordable if you can even find a listing in the neighborhood of your choice. Enter TIC. Because of TIC, owners of apartment buildings have the opportunity to share the costs and ownership of the property with the public. They sell portions of the building, defined by an agreed upon contract, and shift their communities from renters to owners who have real skin in the game. TICs are about 10–20% less expensive then comparable condos in the same neighborhood. Therefore, those that have been waiting for a lower entry point now have an opportunity. This is a big deal for those that have not been able to enter before in Los Angeles. TIC homes in Silver Lake and Echo Park are comparable to the price of what you can buy a small condo in Koreatown! TIC offers a new opportunity for Millennials trying to start a new family or those trying to break into Real Estate market.
Today, if you have an apartment building you can start selling the property as TIC if you are legally prepared. If you do not have a building for sale but are looking to purchase a TIC for yourself, great news! There are listings LIVE right now and fractional funding available as well. Check out a full webinar about fractional financing and the Los Angeles trend here —> https://rentinginla.com/tic-sales-watch-webinar/
Wanna know what TICs you can buy right now in Los Angeles?
This property is for sale at $649k at about $420 a square foot — which in Echo Park is a good deal for this cute of a place. TIC prices are usually around 10–20% less expensive than condos; however, you need to prepare yourself for some extra costs in legal fees if you have not done a TIC sale before.
Details and Legalities
While you should always do your own due diligence, there are several helpful articles and videos to get you up-to-snuff with the TIC trend and legalities.
A fantastic and detailed article about TICs in a seasoned market, San Francisco — > https://medium.com/silicon-valley-real-estate-review/tics-in-san-francisco-9af423c6f842
Live the Community Lifestyle
TIC tenants own the property together as a community. This means that most people will have more pride of ownership than an apartment — so everyone works together to keep the building in good shape and their home values up. By choosing to live with a community, here in Los Angeles you have the opportunity to live and own a property that you truly love and admire.
Live in the neighborhood you love in a home you can be proud of.
This property has 3 TIC units for sale. They share some common spaces that are perfect for entertaining. Each unit has its own charm and beauty.
Real Estate Revolution
As you may know from my other blogs, I am a big Blockchain Technology advocate for its improvements on the way we do business and our economy. I have heard about tokenizing real estate for a few years now — taking REITs to a whole new level! The tokenization of properties and the ability for crypto to facilitate multiple owners to fund a property is something that I can see changing the real estate industry. This, however, might take a long time for adoption. TICs are fractional ownerships happening here and NOW. One major limitation is that at this time there is only one fractional lender in Los Angeles. That means you must be approved by this lender or buy all cash — no exceptions! I will continue to report on this and other real estate trends happening in Los Angeles. Please feel free to email or message me if you have your own experience you would like to share.
Looking for TICs for sale in LA right now? — > TICs for sale HERE!
If you have further questions about escalator clauses, TICs or anything real estate email firstname.lastname@example.org for more info. #RealEstateRevolution
Lauren @laurenglasses (find me on social media ;)