How can CURRENT TIC owners re-organize so they can refinance their property? What structure should it be?

I understand that Lenders no longer like TIC ownership structures. How does a TIC make legal changes that are valid in all states?
In Property Management - Asked by William S. - Feb 19, 2013
Report Abuse
Answer this Question

Answer(s)

Rob B.
Chandler, AZ

William....
Yes, TIC, is a very difficult structure to finance today, with the separate but combined property ownership portions of the whole.
While I believe this question should be answered by an attorney, it in my own experience, I would suggest an LLC ownership form; or alternatively a S-Corporation.
I assume that you have a current TIC operating (or management agreement). The steps for gaining approval from all the TIC owners, should be covered within that agreement.
Again, the best recommendation I can make is to contact a real estate attorney within your state jurisdiction.
Onward and Upward,
Rob Baird
Holder of one of CA's oldest active DRE Licenses
CA DRE 544165
AZ DRE BR 641305000
rob@capratecommercial.com

Feb 20, 2013
Report Abuse
Glen W.
Lender/Mortgage Broker
Atlanta, GA

As a lender, we typically recommend an LLC or S corp (basically a single asset entity is easiest to finance). Before you setup your entity you will need to hash out management duties, who has authority for the entity, will partners guarantee a loan, operating agreements, etc....

Apr 17, 2013
Report Abuse
john s.
Appraiser
Troy, MI

I have financed TIC assets as a commercial banker in the past and these answers are correct. Attny first, corporate structure should be in an LLC or Corp. In general, the collateral will be the asset itself, remember banks are not really in the market to finance 100% of value, pretty much around 75 to 80% currently, the DSC needs to be at least 1.25x (investment product). Good luck!

Jun 3, 2013
Report Abuse

Welcome to Answers

LoopNet Answers is where the commercial real estate community shares what they know to help each other out. And it's all for free.

Ask a question to get advice from brokers, investors, professionals and local experts.

Answer questions to raise your visibility as a trusted advisor and build new relationships.

Ask a Question

Post Question