Tenancy in common seems to be getting quite a bit of attention here in Los Angeles. At first glance, it seems like an interesting concept but it sounds like things may start to get regulated a bit more. Tenancy in common, how we talk about it here, is taking vacant apartment buildings and turning them into condo-like units for people to purchase and own. Instead of renting the apartment unit, people can purchase the apartment unit and own it just like they would a condo but for a smaller price than a condo.
Tenancy in common, also known as TIC, is not new here in California but people have started to implement this strategy to maximize their investments and provide first time home buyers with more affordable options to owning property. Some are saying this could change the housing market but just aren't sure if it would change for better or worse!
Lenders are now starting to catch on to this TIC craze and are becoming more flexible when funding investors looking to turn buildings into TIC's and also for the purchasers of these units. Finding these opportunities, just like other apartment investments, can prove to be difficult though. In a perfect world, you'd find a bungalow court style building (each unit has its own privacy) and then would need to negotiate with the current tenants to relocate so you can begin the TIC process to sell them off individually. As you can imagine, some people aren't crazy about this idea of "evicting tenants" even though that usually comes at a steep cash for keys cost. That's another story though.
I think this is a good idea if everything is gone about in the right way. It's a unique way to look at potential apartment investments and seems to be filling a void for people who don't want to rent anymore but can't own a home in Los Angeles. Seems like there are a lot of details in the contract as far as taking care of the building and potential HOA fees but nonetheless it'll be interesting to see how things shake out with Tenancy In Common here in Los Angeles!