Flipper/Rehabber · Pasadena, CA · Member since 2020 · 45 posts · 16 votes
I worked with people here in Los Angeles that buy and refurbish properties for Tennent In Common or TIC sales and exit strategy. They had a tough time with people having opinions on gentrification and TIC. However, TIC is a real way people can buy in these neighborhoods at 1/2 or 1/3 the normal entry price
Are any Lender open to working through the full strategy of investing with the remodeler and then being prepared to finance the individual home buyers as well?
Unless every applicant can qualify for the full mortgage it sounds like a really bad/risky plan for the lender. Imagine I “owner” defaults. Do they foreclose on the other 2 and take their equity away? I mean it’s reared to begin a purchase with so much negative equity? Imagine you buy 1/3rd of a $600k home for $200k. Then you run in to financial trouble, decide you hate the other buyers, want to leave the state, whatever. How much do you think you can sell that 1/3rd for? $100k? MAYBE. If the buyer knows the other owners. You certainly can’t sell for enough to pay off your mortgage.
They might be harder to bite into outside of an over bid neighborhood. Here where TIC is appropriate if a resident fell out you would make more money reselling the unit because it would have appreciated. They exist here because people are clamoring to live there. They are on the market now selling and reselling with financing: