San Fernando, CA · Member since 2015 · 1 post · 0 votes
Looking at buying a condo in LA and wondering if anyone on here has come across TIC arrangement and what your thoughts are. What are the pro and cons on this type of arrangement? Any assistance would be greatly appreciated.
Commercial Real Estate Fund Manager · Lynchburg, VA · Member since 2015 · 1k+ posts · 1k+ votes
6y
Hi @David Mancilla. I just saw your post. Did you get an answer? What did you decide to do? There is certainly not much info available about this strategy as you've seen here.
Investor · Lafayette, CA · Member since 2016 · 20 posts · 6 votes
6y
Paul & David - Hoping you are getting more TIC feedback away form the forum. I've been looking at a lot of TIC posting that are years and moths old. We are interested in converting existing properties into Shared-Ownership via TIC's. We have several sets of parents who do not like their options for care in the future. They want to live with friends, care for one another and share the cost of care once it gets beyond their ability. We have floated the idea of "Aging in Community" as co-owners of a great large format home. I am searching for mortgage packages that are TIC focused. So far, no joy.
Would you please ping me with any leads you come across? I am also interested in developing my TIC intelligence, please share your TIC stories.
Real Estate Consultant · Salt Lake City, UT · Member since 2025 · 16 posts · 9 votes
11mo
I work with investors who use Tenants in Common (TIC) for income property, and the key is to separate the concept of being on title from how you run the partnership. In a TIC, each owner holds an undivided, fractional interest directly on the deed, which typically allows you to take depreciation and complete 1031 exchanges in proportion to your percentage. The tradeoff is that you also carry your share of liabilities and you need a solid governance framework to avoid gridlock.
Everything lives or dies in the TIC agreement. Make sure it clearly defines who handles day-to-day decisions, which actions need unanimous consent, how capital calls are triggered and enforced, what happens if someone won't or can't fund, how transfers work, and exactly how disputes are resolved. I always focus on exit mechanics: rights of first refusal that actually function on a timeline, an appraisal method everyone accepts in advance, and a pre-agreed path to sell or buy out without torching value. If the group can't articulate how a partner exits cleanly, that's a red flag.
Financing is the next pinch point. Some lenders underwrite and require carve-outs from every TIC owner; others push for a single signatory with special-purpose entities behind the scenes. More owners usually means more underwriting friction, slower closings, and tighter covenants. If you're doing a 1031 into a TIC, get the lender's TIC requirements in writing before you start your identification clock so you're not scrambling inside the exchange timeline.
Underwrite the real estate as if there were no TIC—cash flow durability, DSCR, rollover and lease exposure, realistic rent growth, capex, and exit cap assumptions—and then underwrite the people. Balance sheets, experience, time horizon, and risk tolerance all need to line up. I've seen otherwise strong deals stumble because one co-owner wanted a quick flip while the rest planned a longer, cash-flow hold. Alignment up front is cheaper than mediation later.
Operationally, aim for fewer decision-makers when you can, set reporting expectations for the property manager, and give yourselves the contractual ability to replace the manager based on objective performance. Build healthy reserves at closing and agree in advance on what triggers additional contributions so you’re not negotiating in the middle of an emergency repair or a vacancy spike. Decide early how you’ll choose between refinancing and selling so you aren’t inventing a process under pressure. If your group mixes 1031 buyers and cash buyers, align the tax and timing goals at the outset; otherwise exit timing can turn into a recurring argument.
The recurring risks in TICs are partition actions, transfer friction when someone wants out, and lender restrictions that make ownership changes cumbersome. With a well-drafted agreement, those risks are manageable. The right team matters: use a real estate attorney who drafts TICs regularly, a tax advisor who understands depreciation allocation and exchange rules, and a lender that is explicitly comfortable with TIC structures.
If you share the property type, market, rough deal size, number of co-owners, and whether a 1031 is involved, I’m happy to sanity-check the structure. TICs can be excellent tools to fractionate larger assets and preserve 1031 flexibility, but the success rides as much on partner alignment and paperwork as it does on the pro forma.