TIC-Talk

Another SF-centric post (sorry, Marinites). This time we focus on TICs; that mysterious property type that's not quite condo, not quite co-op, and completely confusing. (In truth TICs, or something like them, are popping up in other areas as well, but they are still primarily an esseff phenomenon.) This article does a good job of spelling out the facts, history, and controversy surrounding TICs.

One important corrective comment: very few newly forming TIC groups have a single loan any more. The vast majority now have fractional financing, a fact the article doesn't address until well "below the fold," and one that has, in our opinion, assured the long term viability of TIC ownership. In this sense, the New York co-op analogy isn't far off. In most places, buyers (and lenders) have understandable hesitation when it comes to co-ops. In New York, they exist right along side condos as a perfectly normal form of home ownership. We suspect that in another three to five years, TICs will have reached similar status in SF, if they haven't already. We also think we know what else needs to happen to speed this process, but that's a longer discussion. (Call for details!)

If you're considering TIC ownership, please call us. We like TICs . Heck, we own one! We just want our clients to have all the information before they buy.

For even more TIC talk, check out the link list at the right of the page. You'll find links to Andy Sirkin's (TIC guru and attorney) website, as well as to the SF.gov condo conversion page. Enjoy.

Now that's an article!

We've complained a few times in this space about newspaper articles that don't tell the whole story or try to tell the whole story based on half the information. We understand. They have to sell papers. And histrionics and hyperbole sell papers.
Since we've been critical in the past, we thought we ought to point out an article that deserves praise. James Temple's piece in the Sunday Chron did a terrific job of digging deep into a specific market; namely newer construction in South Beach/Soma/Rincon Hill. Temple is the new real estate writer at the Chronicle and, despite a couple of hiccups that we're choosing to blame on the editors, he does a consistently good job. This article acknowledges that the dynamics of this market are unique to the market itself; not determined by forces in Washington, Wall Street, or Sacramento. Moreover, Temple does a great job of informing interested readers about what's really going on in a part of the City that captured the interest of many local residents.
Give it a read. Whether you're curious to see who's moving into this area or what the future hold for their home values, we think you'll get a good look.

FH-What?

When you take classes to get or maintain your real estate license in California, the textbooks have a section on financing. There are many pages devoted to something called FHA (Federal Housing Administration) Loans. Until now, these loans were so rare in our state, that most of these classes glossed right over that section of the book. Why worry about something that's never going to come up? Here's why. FHA Loans are actually an exceptional way for less qualified borrowers to buy homes. (Better than, say, sub-prime lending practices, eh?) And in most of the country, they've long been a popular way to enter the real estate market. The problem was, the limits for FHA loans have remained low as California real estate values have skyrocketed. That's finally changing (though perhaps temporarily) and we at Next Generation Real Estate think that's a good thing.