TICs in San Francisco: What They Are, Why They Exist, and How to Buy One Without Losing Your Mind

3890 Market Street, San Francisco | List Price $788,000 | Vanguard Properties

TIC ownership in San Francisco is one of those topics that sounds simple at brunch and gets complicated the second you try to explain it to, well, anyone that isn’t a San Francisco Realtor. A TIC, or Tenancy in Common, means you and your co-owners each buy a percentage of the entire parcel and get the exclusive right to live in a particular unit under a written TIC agreement. There’s no separate deed for “your” unit the way there is in a condo. The agreement is the backbone. It lays out who pays what, which unit belongs to whom, how you handle capital projects, insurance, reserves, pets, quiet hours, upgrades, and what happens when someone wants to sell. Good agreements are everything. Most modern TICs are drafted by attorneys who live and breathe this stuff so there are fewer surprises and fewer 2 a.m. group texts.

Why TICs got popular here is pretty San Francisco. Prices climbed, demand never let up, and people still wanted to live in the neighborhoods they loved. TICs let buyers pool resources and step into locations and square footage that would otherwise be out of reach, and for years there was a real chance a TIC could grow up to be a condo. That hope wasn’t wishful thinking. Two-unit owner-occupied buildings had a fast-track path to conversion, and three to six-unit buildings went into the condo lottery. The lottery had a cap and an epic waitlist. Some buildings waited so long it felt like folklore, but it existed. Then the City hit pause. The long story short is that San Francisco suspended the lottery and tightened conversion rules, kept a limited path for certain two-unit owner-occupied buildings, and the pandemic put even more sand in the gears. Permitting slowed, staffing shifted, political will wasn’t exactly roaring, and bigger-building conversions slid into limbo. As of today there’s no announced timeline that reopens the old pipeline. If you’re buying a TIC, you have to buy it for what it is, not for what you hope City Hall might let it become.

The size of the building matters. Two to four units is common, easier to manage, easier to align on budgets and projects, and easier to finance. Five and six units are doable with a strong agreement and grown-ups at the table. Seven units and up is a different animal. More people, more capital planning, more governance, more risk that one person’s cash flow becomes everyone’s problem. It can work beautifully with the right partners and reserves, or it can turn into a long meeting. Choose your co-owners as carefully as your home.

Financing is the other big reality check. You can’t use standard condo financing because there’s no individually deeded unit. In the old days, TICs often used a group loan, one mortgage for the whole building, which meant shared liability and shared pain if someone missed a payment. Fractional financing changed the game. Now each owner can get an individual loan secured by their percentage interest and their exclusive occupancy rights. It’s still a niche product, usually through local banks and credit unions that understand San Francisco TICs, and the terms can be a little tighter. Bigger down payments, rates a touch higher, fewer 30-year fixed options, but it’s the reason the TIC market still moves. Lenders come and go in this space, but names you’ll hear include community banks and credit unions like Bank of Marin and Redwood Credit Union, the kind of portfolio lenders that keep these loans in-house and actually know what a TIC agreement is.

So what are the real upsides? Entry price is the obvious one. You often get more space or a better location than you could in a comparably priced condo. You get real ownership, stability, and the chance to build equity in The City rather than waiting around for the perfect condo to appear. When the group is aligned, reserves funded, communication clear, and decisions timely, the day-to-day can feel a lot like a small, well-run HOA with a lighter rulebook.

And the trade-offs. Buyer pools are smaller on resale because not everyone wants a TIC or qualifies for fractional financing. Insurance can be trickier and sometimes pricier. You share liability for taxes, insurance, and building bills, which means you’re only as strong as your least prepared co-owner. If someone can’t pay, the rest of the group covers the shortfall while the agreement’s remedies run their course. Projects like roofs, foundations, soft-story retrofits, and exterior paint require collective will, not just a strong opinion and a checkbook. If a TIC was purchased for the dream of condo conversion, that dream may stay a dream for the foreseeable future. Better to buy it because you want this home in this location at this value and you’re comfortable with the structure.

If you’re exploring a TIC, bring the right team. A lender who actually does fractional loans. An attorney who will review or draft a robust TIC agreement and explain it in plain English. An agent who will tell you what’s normal, what’s not, and where the landmines might be. Reserves, bylaws, insurance, capital needs, fractional loan terms, and what The City will or will not allow on conversions right now all matter. I’ll help you evaluate the agreement, run the numbers on fractional financing, look at comps for TIC resale instead of condos, and talk frankly about building size, co-owner dynamics, and project risk.

A TIC is not a consolation prize. It’s a specific way to own in San Francisco that has worked for thousands of people. If you treat it like a stepping stone that might one day become something else, you’ll be frustrated. If you treat it like a well-priced ticket into the neighborhood you actually want to live in, with eyes open about financing, governance, and resale, it can be exactly the right move.

If you want to talk through whether a TIC makes sense for your situation, I’m here. We can look at current lenders, review agreements, and figure out if the value equation works for you now, not in some hypothetical future where the lottery comes back and everyone gets a golden ticket.

TIC Ownership in San Francisco: Quick FAQ’s

What exactly is a TIC?

A Tenancy in Common means you and your co-owners share ownership of the entire property rather than owning individual, deeded units. Your right to your specific unit is outlined in a written TIC agreement.

Is a TIC the same as a condo?

No. Condo owners hold title to their unit and a portion of common areas. TIC owners share ownership of the whole building, and the agreement defines who lives where and how everything’s managed.

Can a TIC convert into a condo?

Only in limited cases. Two-unit, owner-occupied buildings can sometimes qualify, but the old condo lottery was suspended during the pandemic and hasn’t reopened. Larger buildings are stuck waiting for the city to revisit conversion rules.

Why would anyone buy a TIC?

TICs offer a lower entry price, often in neighborhoods or buildings that would otherwise be out of reach. It’s real ownership and equity in The City without paying full condo prices.

What are the main risks?

Shared liability tops the list. If one owner can’t pay their share, the rest must cover it. Financing, resale, and insurance can also be trickier than with a condo.

How do you finance a TIC?

Through fractional financing, which gives each owner their own loan tied to their share. It’s handled by smaller local lenders like Bank of Marin and Redwood Credit Union. Expect higher down payments and slightly higher rates.

Can I rent out my TIC unit?

Sometimes. Most agreements limit short-term rentals or require owner occupancy, so always check the fine print before buying.

Are TICs a good investment?

They can be if you plan to stay a while. TICs usually appreciate more slowly and have a smaller buyer pool, but they’re a great way to own in San Francisco without stretching for a condo.

What’s it like to live in one?

When co-owners communicate and pay their share, it’s seamless. When they don’t, it’s stressful. Choose your co-owners as carefully as your home.

Your best advice?

Buy the TIC for what it is, not what you hope it becomes. Work with a lender, attorney, and agent who’ve done this before. With the right team and expectations, it can be the perfect move.