How fractional ownership works, what it costs, where it makes sense, and the places it does not. Most guides to this subject are advertisements. This one is not. A tenancy in common (a TIC) lets several households buy one building together, each taking a deeded percentage and the exclusive right to live in one specific unit. In Southern California it is how many people have bought a first home in a neighborhood that had priced them out, typically for 10 to 20 percent less than a comparable condominium. It is not free money. The mortgage is a bit different and not as easy to obtain. You will make building decisions with three or four neighbors. For some people that trade is obviously worth it. For others it is obviously not. This guide is built to help you tell which one you are. Every figure is sourced and dated. Where the honest answer is “this concern is correct,” it says so. 10–20% Below a comparable condominium the structural discount $425K–$995K Recent Los Angeles TIC listing prices August 2026 20–25% Down payment, typical no FHA, no VA, no 3% option 4–12 Units in a typical TIC building you will know your neighbors What a TIC is not Not a timeshare, not a co-op, not a condominium. It is a recognized form of real property ownership that California courts confirmed in 2004 and San Francisco has used at scale for more than twenty years. Los Angeles is a younger market, which is both the opportunity and the reason to read carefully. Why it exists at all Turning an apartment building into condominiums in Los Angeles means a tract map, multiple agencies and a discretionary approval nobody controls. A TIC needs none of that, because it does not divide land. Months instead of years, and the discount is what that speed costs. Contents 01 What is tenancy in common? 02 What you actually own 03 Condominium vs TIC 04 Applying for a TIC loan 05 Myth and reality 06 The risks, honestly 07 The Los Angeles market 08 The San Diego opportunity 09 How we work   01 What is tenancy in common? Four things make a TIC work. Understand these and the rest of this guide follows. 1 · The agreement (TICA) The contract that assigns you one specific unit and binds every future owner. 2 · Title One parcel, multiple deeds. Each deed records a named percentage of the whole. The TICA states exclusive rights, areas and rules of the community. 3 · Financing Meriwest, NCB and 5th St. A fractional loan secured only by your interest. Portfolio lenders only. 4 · Property tax One bill for the parcel. Only your fraction is reassessed when you buy, based on the amount of your purchase. The short version Several buyers purchase one property together. The deed records what percentage each of them owns. A separate contract, the TIC Agreement, assigns each owner one specific unit, along with the parking, storage and outdoor space that goes with it. Nothing is subdivided. The county still sees one parcel, one assessor’s number and one tax bill. That is the source of both the advantage (no subdivision approval needed) and every complication that follows from it. The legal foundation. California courts upheld exclusive-occupancy tenancy in common in 2004. It is settled, not experimental, but it is governed by your contract rather than by statute, which is why the agreement matters so much. How it differs from a condominium Subdivision A condo divides the building into separate legal units. A TIC does not. Governance A TIC has a private contract among owners. Financing A condo gets a conventional loan. A TIC needs a portfolio lender. Price A TIC generally trades 10–20% below the equivalent condominium. A building of five or more units requires a public report from the California Department of Real Estate before interests can be sold. Four units or fewer requires no state approval at all, only a TIC agreement, which is why most Los Angeles TIC product is four units or under. Three things that surprise first-time TIC buyers The bank reviews the building Not just you. Unit count, owner-occupancy ratio, reserves and the master insurance policy all get underwritten. A building can fail on any of them while your own file is spotless. There is one tax bill It arrives for the whole parcel, and the owners divide it between themselves using a formula written into the agreement. Only your fraction is reassessed when you buy. Your policy is not an HO-6 That form assumes a condominium and an association. A TIC owner needs different cover, and the building’s master policy is a shared cost you should read before you offer.   02 What you actually own Two documents. One gives you a percentage of a building. The other gives you your home. One parcel · one APN · one tax bill (example) Unit 1 28% undivided interest Unit 2 26% undivided interest Unit 3 24% undivided interest Unit 4 22% undivided interest Your deed A recorded percentage of the whole property. Real, insurable, inheritable, financeable. Your TIC Agreement The exclusive right to live in your unit. Binds every current and future owner. The percentage is real property Your deed is recorded in your name at the county. You can finance it, insure it, sell it, refinance it and leave it to your children. It is not a membership or a share certificate. If you own 26 percent of the building, you own 26 percent of the building. The agreement is where the value lives Under ordinary co-ownership law every co-owner may possess the whole property. The TIC Agreement is what converts that into “you live in Unit 3 and nobody else may.” It binds every current owner, every future owner and anyone who ever buys an interest in the building. Read it before you write an offer. If an agent will not hand it to you, that itself is information. The clauses that decide everything Exclusive occupancy: your unit, parking, storage and yard space Your percentage: keyed to relative unit value, not floor area Cost sharing: and the property-tax apportionment formula Two reserves: capital replacement, and a default reserve for building maintenance and upkeep Default remedies: lien, advance-and-recover, forced sale Partition waiver: express, or a court can order a sale Transfer rules: buyer and lender approval, no further splitting Rental limits: which also protect everyone’s financing Forced refinance: so one owner cannot hold the group hostage Dispute resolution: mediation, arbitration, a buyout mechanic   03 Condominium vs TIC The same money buys three different things. Here is the honest comparison, including the rows that favor the other two.   Tenancy in common Condominium Single-family What you own A deeded % of the parcel plus a contractual right to your unit A deeded airspace unit plus a share of common area The lot and everything on it Governed by The TIC Agreement, a private contract Davis-Stirling statute, with an HOA You Down payment 20–25% 3–20% 3–20% Loan type Portfolio fractional, usually adjustable Conventional, FHA or VA Conventional, FHA or VA Rate vs conventional Roughly +0.5% to +1.0% Market Market Price vs comparable condo 10–20% below Baseline Typically, above Reserves required by law Agreement-dependent Statutory study and disclosure N/A Property tax Only your fraction reassesses; one bill for the parcel Your unit reassesses; your own bill Reassesses; your own bill Your insurance Master policy plus a contents policy; no true HO-6 exists for TIC Master policy plus HO-6 with loss assessment A homeowner’s policy Resale pool Smaller: owner-occupants with 20%+ down Broad Broad Neighbors A handful, and you decide together A board, and rules Nobody When the condominium wins You need a low-down-payment loan. You might move within three years. You want statutory reserve protection and an association that handles things. Or you can simply win a condominium at a comparable monthly cost, in which case buy it, and we will tell you so. When the TIC wins You have the down payment and the reserves. There is a specific neighborhood you want and a lower cost of entry. And a building where four owners agree a budget together sounds workable rather than exhausting. One structural point worth holding on to. You buy at a discount, and the discount tends to carry through to resale. Your appreciation is calculated on the full value of the property, not on the discounted price you paid for it.   Continue the guide 04–06, 09 · Financing, myths, risks and how we work → 07–08 · The Los Angeles and San Diego markets →   How we work Start with a conversation, not a listing. Tell us your numbers and your neighborhoods and we will tell you honestly whether a TIC is the right instrument for you, and if it is not, what is. Martin Fish · Martin Fish TeamCitivest Realty Services Inc. · DRE# 01988997(310) 905-4834 · Martin@martinfishteam.comLos Angeles · San Diego Edition 2026. Current as of September 2026 and subject to change. Figures are illustrative and are not a quote, an offer or a loan commitment. Listing prices reflect selected listings and are not a comprehensive survey. San Diego County price data: San Diego Association of REALTORS®, August 2026. Affordability data: California Association of REALTORS® Housing Affordability Index, Q2 2026. We are not lenders, attorneys, accountants or insurance brokers, and receive no compensation from any lender. Terms, availability and law vary by building, by borrower and by jurisdiction, and municipal procedures change; confirm current requirements with the relevant agency. Nothing here is legal, tax, insurance or financial advice; consult your own advisors before purchasing. Equal Housing Opportunity.

Sections 04 to 06 and 09 of our TIC buyer’s guide. New to TIC? Start with Part 1. Contents 01 What is tenancy in common? 02 What you actually own 03 Condominium vs TIC 04 Applying for a TIC loan 05 Myth and reality 06 The risks, honestly 07 The Los Angeles market 08 The San Diego opportunity 09 How we work   04 Applying for a TIC loan This is where most TIC purchases fall apart. Start here, not at an open house. Qualify. Confirm down payment, reserves and credit with a TIC-experienced lender. Screen the building. Unit count, owner-occupancy, reserves and insurance are underwritten too. Pre-approve. In writing, from a lender who has funded a fractional TIC. Review. Agreement, budget, reserves, title and insurance during your contingency. Close. Record your deed, then file your Homeowner’s Exemption. Why the loan is different Almost every mortgage in America is sold to Fannie Mae or Freddie Mac after it closes. Neither will buy TIC paper; Fannie’s Selling Guide names this exact structure as ineligible. So every fractional TIC loan stays on the originating bank’s own balance sheet permanently. That is a portfolio decision, not a judgment on your credit, and it explains everything else: the rate premium, the larger down payment, the short lender list, and the discount on the price. The product is younger than people assume. The first individual fractional TIC loan launched at Bank of Marin in spring 2005. Before that, everyone in a building shared a single group loan. The bank underwrites the building, not just you. Common overlays: no more than about twelve units, at least 75% owner-occupied, and a minimum unit size. A building can fail any of those independently of your credit, which is why we screen it before you write. Typical terms, 2026 Down payment 20% minimum, 25% common in Southern California Rate Roughly 0.5% to 1.0% above a comparable condominium loan Structure Usually adjustable with a 3-, 5- or 7-year fixed period. True 30-year fixed products exist but are rare and often capped lower Credit score 700 for most pricing, 740 for the best Reserves About six months of payments left in the bank after closing Maximum loan Around $2,000,000 Not available Fannie Mae, Freddie Mac, FHA and VA do not finance this structure Terms vary by lender, loan size, credit and building, and move without notice. Ask for today’s numbers before you set a budget. Bring these to the first call Two years of returns, W-2s or 1099s, and recent pay stubs Statements for every account holding your down payment and reserves A rough credit score, and a heads-up on anything unusual Your timeline, and whether this will be your primary residence   05 Myth and reality Most TIC marketing answers every concern with “that’s a myth.” Some of these concerns are correct. Here we outline the reality. Myth A TIC is riskier than a normal property purchase. Your interest is deeded, insured and recorded like any other real property. On a fractional loan you have your own mortgage secured only by your interest, so a co-owner’s default hits their lender, not yours. The risks in a TIC are real, but they are specific and listed below, not general. This one is true It is harder to get a loan. True, and anyone who tells you otherwise is selling. A short list of portfolio lenders, 20–25% down, 700+ credit, six months of reserves, and no FHA or VA. Budget for it and start with the lender, not the listing. Myth You cannot sell or refinance a TIC unit. You can do both, and people do constantly. Refinancing works, but limits are tighter than on purchase, so build equity. It depends TICs do not appreciate like condominiums. It depends on the building and the street. You own a percentage of a whole property, so you capture appreciation on the full asset. But your resale is constrained by the same financing that constrained your purchase, so the discount tends to persist rather than close. Myth A TIC is basically a timeshare. Absolutely not. A timeshare is a right to occupy for a period each year. You are buying recorded title to a percentage of real property with a permanent, exclusive right to one specific home. It depends There are too many legal complexities. There are more moving parts than a condominium: the agreement, the reserves, the lender overlays, the insurance. None of it is exotic and all of it is handled routinely. What matters is whether your agent screens the building before you fall for it. Does a TIC actually resell? You are marketing to an exclusive, like-minded buyer pool, which lets you use the same value proposition that attracted you, while keeping a reliable and predictable exit timeline. San Francisco, where this market is mature, is the best available read on whether TICs trade at all. 120 TICs sold in San Francisco January–May 2026 $1.2M Median sale price San Francisco +7.5% Average sale above asking San Francisco The constraint in this asset class shows up in price level, not in whether homes sell. Los Angeles and San Diego are younger and thinner markets; plan on more patience than those figures imply.   06 The risks, honestly Six things that can cost you money. None of them are reasons not to buy. All of them are reasons to buy with your eyes open. The refinance you will eventually need Most TIC loans adjust after three, five or seven years. The lender list is short, refinance limits are tighter than purchase limits, and there is no government backstop. Sterling Bank once did the large majority of Los Angeles TIC lending and exited around 2023. Mitigate it with more equity than the minimum and a five-year-plus horizon. Insurance, which is the quiet one The building carries a master policy as a shared expense, and California’s market is under real strain. Two things to know: there is no true HO-6 policy for a TIC owner (that form assumes a condominium and an association), and if the building sits on the FAIR Plan without a wrap policy, that can block financing for every owner at once. Ask which carrier writes the building before you offer. Under-funded reserves No statute requires a TIC to fund reserves. Lower assessments than a condominium is partly a real saving and partly a deferred bill. Read the reserve schedule and insist on a separate default reserve, which we provide with HomWorks. A weak TIC Agreement Silent on partition, no default reserve, no forced-refinance clause, proceeds split by percentage rather than by what each owner improved. An agreement can be fixed before you buy and is very hard to fix afterwards. Group loans Some older buildings still share one blanket mortgage. Properties with individual fractional loans sell for materially more. If you are shown a group-loan building, price it accordingly, and understand that one co-owner’s non-payment can reach you. Your co-owners Typically there is no HOA required, no manager unless the owners hire one, and no statutory dispute machinery. A well-run building is a genuine pleasure. We set you up for success, with an owners’ association already in place to keep the building running smoothly. What we check before you write an offer Unit count against every lender’s overlay Owner-occupancy ratio today, and after your purchase The master insurance policy, carrier and renewal date The TIC Agreement, clause by clause Both reserve schedules and the operating budget DRE public report status for buildings of five or more units Any Ellis Act history and recorded constraints on title Whether any owner is on a group loan   09 How we work Start with a conversation, not a listing. Likely a good fit if… You have 20–25% down plus closing costs, and roughly six months of payments left in reserve. There is a specific Los Angeles or San Diego neighborhood you want and cannot otherwise afford. Likely the wrong product if… You need a low-down-payment loan; there is no FHA, VA or 3% option. You want no involvement at all in how the building is run. What to ask for before you offer The TIC Agreement: the full document, not a summary The operating budget and both reserve schedules The master insurance declarations page, with the carrier named The owner-occupancy count as of today DRE public report status, for five units or more Any Ellis Act history or recorded constraints on title The preliminary title report Whether any owner is on a group loan Written pre-approval from a lender who has closed TICs What happens next A call about your numbers and your neighborhoods. An introduction to a lender who has closed TIC loans. We screen buildings against the list above.   Continue the guide 01–03 · What a TIC is and what you own → 07–08 · The Los Angeles and San Diego markets →   How we work Start with a conversation, not a listing. Tell us your numbers and your neighborhoods and we will tell you honestly whether a TIC is the right instrument for you, and if it is not, what is. Martin Fish · Martin Fish TeamCitivest Realty Services Inc. · DRE# 01988997(310) 905-4834 · Martin@martinfishteam.comLos Angeles · San Diego Edition 2026. Current as of September 2026 and subject to change. Figures are illustrative and are not a quote, an offer or a loan commitment. Listing prices reflect selected listings and are not a comprehensive survey. San Diego County price data: San Diego Association of REALTORS®, August 2026. Affordability data: California Association of REALTORS® Housing Affordability Index, Q2 2026. We are not lenders, attorneys, accountants or insurance brokers, and receive no compensation from any lender. Terms, availability and law vary by building, by borrower and by jurisdiction, and municipal procedures change; confirm current requirements with the relevant agency. Nothing here is legal, tax, insurance or financial advice; consult your own advisors before purchasing. Equal Housing Opportunity.

A four to twelve unit building in a good Los Angeles neighborhood is usually worth more sold as individual homes than sold whole to an investor pricing it off rents. Tenancy-in-common is the structure that makes that possible on buildings that cannot practically be condo-converted. The basic arithmetic An investor buys your building on a cap rate applied to in-place rents. Owner-occupant buyers pay on price per square foot for a home they will live in. On rent-stabilized stock with below-market rents, the gap between those two numbers is often very large, and TIC is how you capture it. The gap is not free: you take on the time, cost and execution risk of a unit-by-unit sale. Which buildings are candidates Small unit count, typically four to twelve, in a neighborhood where buyers want to live rather than only invest. Units that read as homes: separate entrances, real light, parking, layouts that stand on their own. A clean path to delivering units vacant, handled lawfully and with proper relocation, or units already vacant. Physical condition that supports individual sales, or a budget to get there. What the process involves Feasibility and pricing first: what each unit sells for, what the whole building fetches as an investment, and whether the spread justifies the work. Then the legal structure, drafted by TIC counsel. Then lender lineup, because your buyers need fractional financing to exist before you launch. Then unit preparation and a staged release to market rather than dumping every unit at once. The risks, stated plainly Timelines are long and the tenant-relocation side is regulated, costly and legally exacting. Financing availability moves with rates and with a handful of lenders. Carrying costs run while units sit. Value is only realized on units that actually sell. A TIC conversion is an operating project, not a listing. Start with the numbers We will run the two scenarios side by side on your building, at no cost: what it sells for whole, and what it sells for unit by unit net of conversion costs and time. If the spread is not there, we will tell you. General information only, not legal, tax or financial advice. Tenant relocation and rent-stabilization compliance require qualified counsel.

Sections 07 and 08 of our TIC buyer’s guide. New to TIC? Start with Part 1. Contents 01 What is tenancy in common? 02 What you actually own 03 Condominium vs TIC 04 Applying for a TIC loan 05 Myth and reality 06 The risks, honestly 07 The Los Angeles market 08 The San Diego opportunity 09 How we work   07 The Los Angeles market Three forces built this market, and all three are still running. That is why almost every TIC in Southern California is in the City of Los Angeles. What Los Angeles TIC homes are listing for Selected listings across core TIC neighborhoods, August 2026 Atwater Village · 1 bed   $425,000 Los Feliz · 1 bed   $495,000 Frogtown · 1 bed   $495,000 Echo Park · 2 bed   $499,000 Atwater Village · 2 bed   $535,000 West Adams · 2 bed   $595,000 Los Feliz · 2 bed   $688,000 Hollywood · 4 bed   $799,000 Mid City · 3 bed   $995,000 Selected listings, not a comprehensive survey. Individual prices vary with unit size, condition and building. What drives it A transfer tax on large sales. Measure ULA adds roughly 4% above about $5.4 million and 5.5% above about $10.9 million, indexed each July. An owner selling a building whole absorbs that in one hit. Selling unit by unit as TIC interests does not reach the threshold. Rent-stabilized income is capped harder. From July 2026 the RSO adjustment formula moved to 90% of CPI with a 1% floor and a 4% ceiling. Capped income plus a taxed exit pushes long-time owners toward a unit-by-unit sale. Condominium conversion is slow and discretionary. It requires a tract map, review across multiple agencies, a per-unit city fee and an approval that can be appealed. TIC requires none of it, because it does not divide land. What that means for you as a buyer. The discount you are offered is not generosity and not a defect in the building. It is the price of a financing constraint, in a market where sellers have strong reasons to choose this route. 4–12 units Typical building size the lender overlay band Four or fewer Units needing no state approval five or more triggers a DRE public report Owner-occupants Who the lenders will finance 75% owner-occupancy is a common overlay Where the product sits on the map The eastside corridor Echo Park, Silver Lake, Atwater Village, Frogtown, Los Feliz. Small older buildings, one and two bedrooms, the most consistent supply. Central and western pockets West Adams, Mid City, Koreatown, parts of Hollywood. Larger floorplans, wider spread between listings. Almost nowhere else Outside the city the three drivers weaken, and so does inventory. Expect a short list in any given month.   08 The San Diego opportunity Los Angeles took twenty years to build a TIC market. San Diego has the same economics, a bigger affordability gap and almost none of the competition. Here is what that means if you are early. $1,120,000 Median detached home +4.7% year over year $670,000 Median attached home +0.1% year over year San Diego County, August 2026. Source: San Diego Association of REALTORS® market report, August 2026. Affordability: California Association of REALTORS® Housing Affordability Index, Q2 2026. The $450,000 gap between detached and attached is exactly where a TIC competes. The affordability gap is the whole case Seventeen percent of San Diego County households can afford the median single-family home, and qualifying takes an income of about $268,000. The detached median is $1,120,000. Attached is $670,000 and close to flat. Everyone priced out of the first number is competing for the second. A TIC interest priced the customary 10–20% below an attached comparable lands in the mid-$500,000s: the difference between renting in North Park and owning in it. The condominium route is narrower than it looks San Diego’s map waiver is real, and for a vacant four-unit building inland it is the better tool. It just does not apply as often as assumed. Five units or more means a tentative map, a Planning Commission hearing and a DRE public report. Every conversion is subject to the Inclusionary Housing Ordinance. Anything in the Coastal Overlay Zone carries an affordable-housing replacement obligation or an in-lieu fee into the Housing Trust Fund. And a tenanted building means seven separate notices, a 180-day clock, a 90-day right of first refusal and three months of relocation at HUD fair market rent. A tenancy in common triggers none of it, because it does not subdivide land. No map, no hearing, no public report, no replacement obligation. Months instead of years. Where a TIC wins here Five units or more: the map waiver stops at four The Coastal Overlay Zone: replacement obligations bite Tenanted buildings: no 180-day conversion clock Sellers on a timeline: at market in months, not years Buyers under $650,000: where supply is thinnest Why we are building this market There is no established TIC channel in San Diego yet: no sponsor, no conversion company, no brokerage that specializes in it. In Los Angeles that gap closed years ago and the discount narrowed with it. Here it is still open, which means the earliest buyers get the best buildings at the widest discount, and the earliest sellers reach a pool of purchasers nobody else is marketing to. We are building the lender relationships, the agreement templates and the pipeline to make that work. What is opening up next ADUs sold separately City amendments effective 22 August 2025 let accessory dwelling units be converted into separate condominium homes and sold individually, a new class of small ownership product. The unincorporated county The County adopted its own ADU ordinance effective 4 April 2026, with owner-occupancy measures from 18 September 2026. More fractional-style ownership, not less. Starter-home subdivisions State law now allows ministerial subdivision into ten or fewer fee-simple parcels on vacant or multiple-dwelling-zoned land, a tool that expands this market.   Continue the guide 01–03 · What a TIC is and what you own → 04–06, 09 · Financing, myths, risks and how we work →   How we work Start with a conversation, not a listing. Tell us your numbers and your neighborhoods and we will tell you honestly whether a TIC is the right instrument for you, and if it is not, what is. Martin Fish · Martin Fish TeamCitivest Realty Services Inc. · DRE# 01988997(310) 905-4834 · Martin@martinfishteam.comLos Angeles · San Diego Edition 2026. Current as of September 2026 and subject to change. Figures are illustrative and are not a quote, an offer or a loan commitment. Listing prices reflect selected listings and are not a comprehensive survey. San Diego County price data: San Diego Association of REALTORS®, August 2026. Affordability data: California Association of REALTORS® Housing Affordability Index, Q2 2026. We are not lenders, attorneys, accountants or insurance brokers, and receive no compensation from any lender. Terms, availability and law vary by building, by borrower and by jurisdiction, and municipal procedures change; confirm current requirements with the relevant agency. Nothing here is legal, tax, insurance or financial advice; consult your own advisors before purchasing. Equal Housing Opportunity.