Tuesday, August 28, 2007
Andy Sirkin is the premier attorney to consult when structuring a Tenant In Common (TIC) investment purchase in the San Francisco Bay Area. It is definitely attractive to purchase a home in San Francisco significantly less in price than the same size condo. What are the downsides? Will you ever be able to convert to a true condo? Who oversees the overall maintenance of the building? These are significant issues that need to be answered when buying a TIC. What are the advantages besides price? I will follow up with some more research into this very viable home option soon.
Please consider that there is always a bad real estate market AND a good real estate market at the same time. There is always an advantage position in every market. If there is low inventory and many buyers (seller's market) - then it's great to be a seller and not so great to be a buyer. In today's market - it's not so great to be a seller and very good to be a buyer. If you have the ability to play the side of the fence that is attractive at any give time, do so. I just sat down with a client yesterday who owned a fourplex in San Jose. We decided that it was not the time for him to sell. It was definitely a time for him to buy. Prices are down approximately 15% in that fourplex neighborhood in a year and rents are up maybe 10% in the same year. The trend for both those indices will remain the same for a while. Those who make strong, long-term purchase decisions this year amidst all the negativity will do very well in the medium to long run.
There are many "life events" that affect how we manage our real estate assets. One event, that I have been personally educated in, is going through a divorce. Whether you own one family home which you may want to sell to go your separate ways or you have a portfolio of properties that must be divided - divorce requires planning for best results. Capital gains issues are very important. 1031 issues too play a big role if you have investment property. I humbly say that my ex and I did mediocre at best planning. This was due to antagonistic communication and general distrust. There is never win-lose - that really is lose-lose. Play the win-win game - no matter how tempting is revenge. Both parties can walk away happier and have more assets to start their "phase two". I plan to write more specifics about divorce and real estate issues in further blog entries.