@JT Spangler
Actually, it's not advanced stuff, it's basic real estate, you can find it free through my signature.
Purchase and re-purchase agreements can have a sale based on an appraised value acceptable obtained in the future, to the owners at the time the contract is made, or the average of two appraisals, or a price agreed to today, it simple requires a price that can be ascertained when the contract is exercised. Such sale contracts can be over a specific period or time or be executed on a specific occurrence, trigger events could be the death of one partner in title, or both, or if the sun does or does not rise on a Monday, in other words, anything can be agreed to as a triggering event.
Title ownership is like a piece of pie, it can be divided many ways. This is taught in basic real estate classes. Tenancy in Common (TIC) is a form of ownership and the owners may use a "TIC Agreement", unspoken of on BP I believe, a TIC Agreement spells out out such matters as what an ownership interest an owner has, their rights to use a property, common areas, notices of sale, rights of first refusal, any option of other owners, future sales required upon certain events and any reversionary interests that may operate by law. This agreement does not need to be complex, but one could be.
TIC Agreements are more common in apartment complexes with multiple owners, it is used to avoid condo or planned unit development restrictions, however a TIC can be used for holding title to any real estate parcel, including single family residential properties.
Simply look up Tenancy in Common as rights change upon a sale or death of an owner, not a problem when a TIC Agreement is used, so consult your attorney as to local and state requirements.
Contrary to popular investor beliefs on the internet, nothing really ties up title other than a restrictive covenant to title or joint tenancy ownership exists where both or all owners must agree to pass all interests in title, subject to state laws. I can buy legal title to a property you hold an option on, subject to that option just as I can with any other lien or encumbrance. Again, basic real estate. Your right of first refusal is generally made as to passing all title interests, not part, so depending on how that agreement is made, I could buy a third interest, in the event all interests are to be sold, we'd give the holder a call! :)
In six years on BP, I've not seen any in depth discussion about the use of TIC ownership, I guess it's over the heads of the gurus, because most of the strategies attempted by investors can be better accomplished with TIC.
1. A minority interest in title keeps majority owners safe from general liens or judgments of a minority holder.
2. It allows the Wholesaler to advertise the property all day long, take out a billboard ad in front of the state real estate commission in Oho or any other state without fear of getting nailed!
3. It allows a fix and flipper to go in, obtain building permits as an owner, execute contracts and establish liens to the extent of their ownership.
4. It allows an owner to lease their interests or all interests of a property, that takes care of your sandwich lease junk where the first tear tenant, the investor, can't contract for repairs or maintenance.
5. Future equity may be assigned under a TIC Agreement, something long term option holders like to obtain.
6. It is much more difficult to have a TIC transfer with an unrecorded TIC agreement to be found or recognized as a disguised sale or an installment agreement. You simply declare the minority purchase.
7. Since minority interests are generally protected from creditors, it's a good tool for estate planning.
8. If not otherwise restricted by a TIC Agreement, an owner in TIC may obtain loans up to their interests held.
9. By slicing up the TIC interests you can have more than one owner holding the slice of pie of the total ownership, for those using partners.
10. A TIC can be in or part of an LLC or Trust, so the games played there are all available to the TIC ownership arrangement.
NOTE: Selling any interest in a property securing a mortgage can trigger the due on sale clause. Now, I have seen options and installment contracts as well as long leases trigger the DOS, I've never heard of a lender calling a loan due because title was held in TIC.
I hate to let the cat out of the bag, but this is just one aspect of why I tell beginners to learn real estate instead of this guru monkey business they chase like chickens with their heads cut off and getting into unethical and illegal messes.
There is nothing new in real estate and there is nothing that you can do legally that hasn't been done before.
You mean newbies pass up divorce deals where one party refuses to sell...... buy the interest held, the other party will sell, one way or another!
Learn the basics of real estate before trying to deal in real estate! :)
