Tenants in Common Los Angeles - YouTube

(calm music)

Hi, my name is Felipe Crook from Realty One Group United

and today I want to talk to you about tenants in common.

What is that you ask?

It is a form of ownership that is starting

to become very popular in Los Angeles.

It's been around for 30 years in San Francisco

but it's starting to become more and more common

here in Los Angeles.

So I want to explain what it is

and why it's beneficial to some buyers.

So this is a form of ownership

where you will own a percentage of the overall property.

The best way to describe this is,

let's say you have a fourplex,

you would own 25% of the overall property of your unit.

You have exclusive rights to this property.

You can do whatever you want on the inside.

And then you have what's called

a tenant in common agreement, or a TIC agreement.

It's similar to an HOA rules and restrictions

that'd you'd get in a condo or any kind of HOA,

but it's called the TIC agreement.

Now this will spell out everything about your ownership.

It'll spell out the percentage that you own,

exclusive use of that unit, common grounds, the fee,

there is a TIC fee which is similar to a HOA, per month.

If anyone defaults on the property,

any ways that they want to amend the agreement,

those are all located in the TIC agreement.

So it's going to be really important

when you're doing this kind of transaction,

to talk to an attorney, review the TIC thoroughly

because that is how you can live

and the rules and restrictions of your ownership.

Now there is financing available for TIC properties.

There are some restrictions.

So you will have to have at least 10% down.

You will have to provide two years of tax returns.

You have to have at least a 700 FICO score

if you're employed

and a 720 FICO score if you're self-employed.

The only loan programs

that they have available are adjustable-rate mortgages.

They have a 3/1, 5/1, and a 7/1 ARM

or their more popular program is a five and five ARM.

What does that mean?

It means that every five years the property will adjust

in terms of the interest rate.

So it will adjust to market rates.

There is a cap on there but all of those details

I can explain to you once we talk to a lender.

But that one is their most popular program.

Now there are some risks in TIC purchases

but there are risks in a regular transaction

for real estate as well.

So you just need to gauge your risks

and talk to an attorney, see if it makes sense for you.

But here's the reason why I wanted

to show you some of these properties I saw yesterday.

One was a gorgeous little bungalow

that's been fully renovated.

It's 599 just outside of Atwater Village.

You can't find anything for 599 in Los Angeles

that's in good shape in a good neighborhood.

So this gives you the opportunity

to get into a neighborhood for a lot cheaper price.

So if you keep watching this video I'm going to show you

three other properties that I saw yesterday.

One in Silver Lake for 650 and two in Frogtown,

which is outside of Atwater Village, for 599.

So if you have any questions about TICs,

please give me a call.

I would love to help you get into a property.

My phone number is 213-340-5352.

Let's get you into a house in 2020.

I can make that happen, have a good day.

(calm music)