TICs Aren't Condos. The Financing Isn't the Same Either.

TIC properties are becoming a bigger part of the conversation in California real estate.

That's especially true in expensive housing markets where buyers are looking for alternatives to traditional condominiums and single-family homes.

But there's one mistake I see buyers make repeatedly.

They assume financing a TIC works like financing a condo.

It doesn't.

A Tenancy in Common has a different ownership structure. Instead of owning an individual unit with a separate title, buyers own a fractional interest in the entire property along with the other owners.

That difference matters when it comes to financing.

Not every lender offers TIC loans.

The available loan programs, down payment requirements, interest rates, and underwriting guidelines may differ from traditional condominium financing.

The TIC agreement and the property itself may also need to be reviewed.

That's why buyers should understand the financing before they start writing offers.

I've talked with buyers who found a TIC they loved, negotiated the purchase, and only afterward discovered that the lender they were working with didn't finance TIC properties.

That's a frustrating position to be in.

The better approach is simple.

Get the financing reviewed first.

Understand your purchase price range.

Know how much you may need for the down payment.

Have the property and ownership structure reviewed when appropriate.

Then start shopping.

TICs can create opportunities for buyers in markets where traditional homeownership has become increasingly expensive.

But they're a specialized type of purchase, and specialized purchases require the right financing strategy.

If you're considering buying a TIC in California, send me the property you're looking at.

We'll review the financing options before you make assumptions about what will—or won't—work.

— Michael Belfor

American Pacific Mortgage