Due to the sudden influx of real estate lawsuits, many of those in the business noticed a sudden spike in prices between different real estate properties around the world. The clamor for these real estate properties is reaching a record despite its normal price range.
To cope with this scenario, many real estate investors and individuals are looking for partners in the acquisition of real estate. This joint venture is best described as Tenancy in Common or TIC. This type of business allows people to pool their resources to purchase one or more properties to further expand their business or maximize profits, something quite impossible to achieve as a single person.
This type of company is quite popular for its ability to reduce the financial risk of the parties involved. Another advantage includes minimizing the business expenses of each co-owner by sharing it with the rest of the group, depending on the percentage of participation of each individual. This further reduced the risk of over-financing the business through unnecessary expenses.
Fractional loans
TIC lenders have formed a consortium around the fractional loan idea that allows co-owners to individually initiate corporate lending mortgages; which can be paid individually depending on the allocation of shares in joint ventures. ICT loan companies offer different rates, such as interest, depending on the scale of the business of these ICT companies.
A co-owner may participate in a separate loan with TIC lenders that involves a signed note covering the individual’s share in the property, along with a deed of trust covering the co-owners’ share. In the event of a loan default, TIC lenders can immediately enforce the co-owner’s participation without affecting others in the process, unlike those in group financing from other lenders. Many ICT groups are now targeting ICT lenders offering installment loans to minimize the risk of tarnishing the company’s image through bad credit or worse, ending the business.
Since its inception about 20 years ago, many private loan companies brought the idea of ICT lenders to various people in the joint venture. These loan companies now offer promissory notes and individual finance for fractional vacation home developments, which is on the rise since the steady influx of tourism.
Many ICT lenders, such as banks and other private companies, look at the potential returns that can be made on fractional loans, as opposed to regular loans for home development and business refinancing. Considering the low risks involved in such an undertaking, many ICT lenders recognized the potential growth in earnings and capital gains through these specific individual loans to joint leasing organizations.