Friday, September 01, 2006

Stirring It Up

Headlined "A Tenancy-in-Common Owner Sings the Blues," a Surreal Estate column in the Chron last August 11 focused on a Pacific Heights TIC owner. According to the story, this owner was paying an "emotional toll" for her TIC ownership. The stresses and strains included uncertainty about condo conversion after three years of ownership, and difficulties related to the fractional loan application process. The writer said after 21 months this group's refinancing - "a bureaucratic nightmare of Sisyphean proportions" - was still not complete.

After reading this, I alerted my group. If we wanted to go for a fractional loan we had better plan our strategy way in advance, and be prepared for a complicated and "unending process."

I guess I am one of the gullible few who believes most of what she reads. Someone familiar with the building recently gave me this clarification:

"The group did not really focus on getting the loan until the past 60 days. Prior to that, it was unclear to the lender whether they even wanted to refi. Their docs are now in order and they are about to close. Also, contrary to what the article said, they knew going in that their loan was only fixed for 3 years and that there was no possibility of condo converting within that time. Also, there were no individual loans available then. So, the notion that their expectations were not being fulfilled was completely fabricated to create a story. Things are actually turning out better than they could possibly have imagined when they bought the building with a 3-year fixed."

The key word here is focus. When you are working as a group, you need to rally behind a decision and march forward as one. Don't even bother getting involved with banks, contractors, insurance companies or any other vendors unless you have a quorum and an action plan.

If you have your paperwork in order, closing on a fractional loan should take about 8-10 weeks.


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