Anybody like to group to invest in properties on a TIC basis? (Tenant-in-Common). You can also share your traumatic experience if you have a recent en-bloc. Like what to do with too much money.
One enbloc can set you free. Put back $300 to 400 K in a beautiful spacious HDB flat say in Punggol and the remaining million plus into annnuity for $60Kpa will set you free for life. Your only problem left is how to live beyond 85 and beat the house odds.
We call this "HomeRun". The final stretch. Hee-hee.
TIC basis, You mean a group of SHC members buying a property as an investment and specified the respective shares to be held by each of you. The profit from the investment will then be distribute accordingly. I wonder will this work? Also the whole process may be complicated, taking into account that a decision to the property must agree 100% by share holders. As in the case of en-bloc, it take years before all dispute are being dissolved. If I have too much money, I will probably buy a Condo and rent it out. Steady income, not to bad an ideal hor!
Ah Nee
KT,
I believe many of us dont have the opportunity or the experience to be involved in a en-bloc sale. I therefore assume such participation will involve a good amount of money.
For information, can you share what is involved, and how much do you think this investment will require.
Personally, I would not participate nor do I have the resources. Do share your thoughts on this Post.
Terence Seah
The administration of a Tenancy-in-Common can be difficult, tedious and frustrating.
People are born with different likes and dislikes, idiosyncracies as strange as don quixote meeting mr bean, will not easily agree on a matter big as the disposal of a property.
Unless a decision is unanimously taken, what right has anyone to say that the majority prevails? (Even if a property is owned by a company, it takes a special resolution meaning at least 75% agreeing & not a simple majority, to dispose of a substantial asset).
It might end up in an expensive legal wrangle to be finally resolved by a judge who may be as confused as a drunk confucius.
Heee, the “HomeRun” may become running around looking for a home and that certainly can be the final stretch of one’s nerve b4 insanity.
tim
Under Tenant-in-Common, each tenant will have a separate and distinct share in the property. Tenants in common may therefore deal with their respective share (such as by selling it or bequeathing it in their wills) without needing the approval of the other co-tenants. It is a highly effective form of ownership if you’re buying the property with your siblings, or with friends for investment purposes.
For real estate investment there is usually a comprehensive exit program based on event. For example, when a agreed profit target is reached or otherwise agreed, the property is sold in open market. Before the trigger, any TIC who wishes to sell is obliged to sell to the other TICs before he can offer it to the market.
It is no more complicated than the paperwork required to buy a car. It opens a whole field of lucrative investment opportunities in real estate portfolio. You do not have to pay obscene fees to fund managers for managing your REITs. Keep all the profits for yourselves.
In today’s market, it is hard to see how not to make good money if you own a shared portfolio of en-bloc-able properties. Whilst waiting for the HomeRun, you can enjoy a positive cashflow from rent.
KT, you’re quite right there insofar as the interests of TICs are concerned, each interest (or share) is distinct & separate from the others and may be disposed of individually, subject to a tenants agreement (if any) wherein the right of first refusal is a common feature.
However, it remains a challange if it’s a case of some wanting to dispose of the key asset (i.e. the property) and some demur but without wanting to exit.
Yes, it does appear to be a kind of mini-REIT but to me, potentially cantankerous.
Choice of like minded partners is important in any TIC agreement. The best is that everybody is in it purely for the money. Set clear financial goals and unwind on cue.
Hint: Make sure that none of the TIC members occupy the key asset for any purpose eg residential or commercial use. Rent out to only independent tenants. Most important. Don’t fall in love with your investment.
Hi KT,
Your proposal is similar to the concept of “landbanking” which is marketed my Walton (in Canada) and Jardine Smith (UK land). They bought over large plots of usually agricultural land and submit planning approvals and wait for offers from developers. They invite investors to buy small plots of land ard S$20K. If they receive any offers, it is put to investors to vote. If above say 80% (Walton) or 60% (JS)accept, it will be sold. Generally, their past record indicated an avg profit of some 30% pa over 5yrs. Recently, i was introduce to another company Oilpods which is selling “interest” in land with oil reserve for ard S$30K and investors are paid 9% pa interest and principal repayment over 3 yrs, thereafter investors can look fwd to “passive” income for the next 10 – 15 yrs, until the land is no longer economical to work on. I think the oilpod offer is quite attractive for us to consider.
cheers! Henry
Actually, they are worlds apart in terms of investment quality.
There is an excellent analysis on Oilpod in
http://www.wallstraits.com/community/viewthread.php?tid=3089&page=1
The posting is by D.O.G. posted on 20-4-2006 (scroll 3/4 down). To quote a conclusion
“…the current cost structure of makes it impossible to actually earn any profits from selling oil and gas…..” Do your own sums. Investors in working interests buy a percentage of all current and future oil and gas revenues for a particular project. An upfront payment is made, in exchange for a revenue stream tied to the sale of oil and gas from that particular project. Even assuming that it is correctly priced on entry, you are basically betting that oil will rise to drive profits up. If so, you might as well play oil derivatives in a highly liquid and efficient world market rather than to take on non-systematic alpha risks of managers that you do not know well. Eg if the company goes bust in a rising market you still bear the full brunt.
With landbanking you are basically gambling on development approval. On some of the earlier deals, you buy virgin land in the frozen wlderness of Canada. It’s freaking cold out there where, probably, only the polar bears and penguins play.
(Hmmm. What about fighting polar bears and racing penguins. We can then get Tim to make a book…..)
Most TIC focus on fully developed, operating property assets. Even where bare land is involved they are mostly post-development approval and subdivided land.
KT, why make polar bears fight and penguins run aimlessly when tim, a man of love, will only do things with love.
So tim will get the bears & the penguins to come together and make love, with Edwin playing his instrument to soothe their nerves.
KT, I believe you must be above 21 so you can watch………..but sorie, watch only hor.
Also can. Love works.
Or get the polar bear jockey the penguin. The loser gets to ride the polar bear. With so many creative uses of landbanking, it is hard to imagine how to lose ….
Cheers
Few people think and pro-actively manage their property invesment. This is inspite property being a major asset and plays a significant part to your finacial well-being.
There are many interesting and creative 2nd home options. Here’s one
Eg. Mandarin Oriental Chicago is selling hotel condos. This is part of a 75 storey hotel in Chicago’s Millenium Park incorporating 100 branded residences and 150 deluxe condos. You invest 15% deposit starting from US 100K. Before completion (2 to 3 years) you are guaranteed a 40% profit or a 40% savings based on discount on selling price. If you go through with the deal you will have a hotel condo which will be managed for you in your absence.
Hotel condos could become a major class of property investment for us. Consider it for your portfolio.