TIC + Co-op Lender & Ownership-Structure Deep Dive (MASTER)

Prepared for: James McDonnell, Conscious Communities Real Estate Date: 2026-07-17. Every lender below was checked against its own live website on this date. What this is: the merged, deduplicated master of three parallel research passes: - 10a_tic_lenders_verified.md (California-wide TIC/fractional lender census, 13 verified-active) - 10b_coop_altstructure_verified.md (co-op + every alternative ownership structure, verified financing) - 10c_reddit_forums_firsthand.md (Reddit/BiggerPockets firsthand borrower intel, 74 permalinks)

The three source files hold every URL, quote, and permalink. This master is the decision layer.

1. BOTTOM LINE (read first)

1. TIC financing exists in LA, but the bench is razor-thin. LA buyers repeatedly say "two lenders." The whole California fractional-TIC institutional universe is ~7 portfolio lenders + 1 wholesale shop + a handful of specialist loan officers. Independent research converged on the same short roster from three directions, so this list is close to exhaustive.
2. The old "ARM-only" knock is broken: a 30-year FIXED TIC loan now exists in LA (Meriwest confirmed; NCB reported by a real Highland Park buyer). This is the single biggest positive change and it belongs in the prospectus.
3. No alternative structure beats plain fractional TIC for a market-rate, sell-each-unit business. Co-op is the only real alternative and it loses on financing + drags in Davis-Stirling and the LA condo-conversion ordinance. Keep co-op only as an affordable/mission pivot.
4. ⚠️ The pricing finding you need to see (Section 5). Firsthand buyers + SF agents + the financing mechanics all say TIC units sell at roughly a 10-25% discount to condos, most often ~20%, and it is structural (thin financing + co-owner fear), not just unit condition. This bears directly on the condo-parity exit you locked. My recommendation is inside.
5. The model's core financing risk is concentration: LA rests on essentially ONE retail bank (NCB) + ONE wholesale channel (5th Street Capital). De-risking that is an action item, not a footnote.

2. THE LA ACTION LIST (who to call first)

Ranked for James's market (LA County, 2-4 units, buyers need fractional loans):

Bay-Area-only (verified active, do NOT market to LA): Bank of Marin (SF only), Bank of San Francisco (Bay Area), Patelco (NorCal, no own-site TIC page — verify).

DEAD roster (a page listing these is stale): Sterling Bank (was ~95% of LA TIC loans; book sold to Bayview, bank folded into EverBank), First Republic (failed 2023, absorbed by Chase; Chase did NOT continue the program). Comerica appears only in recycled broker boilerplate — treat as stale until a direct call proves otherwise.

3. TERMS CHEAT-SHEET (cross-lender, 2025-2026)

Use these in the prospectus and the calculator; every figure is corroborated across the census and firsthand accounts.

• Down payment: 20% standard (up to ~$2M). 15% available up to ~$1.5-1.76M with PMI. Investment TIC 20-25%.
• LTV: 80% standard; 85% warrantable via 5th Street.
• Rate: ~6-7% at 80% LTV. Spread over a comparable condo loan is +0.5% to +1.0% (older accounts said +1.0% on ARMs; recent 30-yr-fixed buyers report +0.5%). Live Redwood CU TIC ARMs on 7/17: 5.875-6.375% (APR ~7.0-7.2%).
• Fixed vs ARM: historically ARM-only (3/1, 5/5, 7/1). 30-yr FIXED now exists (Meriwest, NCB-in-LA, placed by specialist LOs) but is still less common than ARMs.
• FICO: ~660 floor, 700+ better, 760+ best pricing.
• Loan size: up to ~$2M (NCB, Redwood, Bridgepoint); Meriwest ~$1.15M; Bank of Marin $1.5M.
• 2-4 unit fit: fractional TIC is purpose-built for small buildings. 5th Street caps at 4 units without DRE docs — squarely CCRE's target. 5+ units triggers the DRE public report; stay at 4.

4. OWNERSHIP STRUCTURES — does anything beat TIC? No.

One idea worth stealing: Pacaso guarantees payment to its lending partners on default. A sponsor-backed default guarantee is the cleanest lever to coax a portfolio lender into writing more fractional loans on CCRE buildings — a direct answer to the concentration risk.

5. ⚠️ PRICING REALITY CHECK — the one thing that challenges the locked exit

You locked the exit at condo parity (no discount). Your reasoning: the discount is a legacy artifact of small, poor-condition TICs, and CCRE renovates to condo quality. Your DuckDB pull backed it — 77 LA TIC sales ~$665/sf vs condos ~$674/sf (~1.3% gap).

This deep dive pulled up strong, independent evidence pointing the other way, and I'm not going to bury it:

• Firsthand LA buyer: "20% seems to be the usual discount versus if it was a condo/townhome." (r/LosAngelesRealEstate)
• Firsthand SF buyer: "All TICs in the city will be 20-30% less than a typical condo."
• SF agent blog (insidesfre): "ten to twenty percent less than condos."
• A LA listing agent, to a buyer's face: units are "priced a little lower because some people are hesitant about TIC's."
• The mechanism (why renovation quality does NOT fully erase it): only ~2 LA lenders, 15-25% down, +0.5-1.0% rate, local/portfolio bank required, and hard to refinance — plus buyers' #1 fear is co-owners, not condition. A beautiful finish doesn't change the buyer's financing terms or the smaller buyer pool.
• The downside tell: "In a downturn, TICs lose value first. Then condos. Then single family homes."

Why your DuckDB near-parity number and the ~20% anecdotes can both be "true": the DuckDB figure is a raw median-$/sf comparison, not a size- and location-matched, same-building comparison. TICs cluster in walkable, desirable pockets, which lifts their raw $/sf and hides the like-for-like penalty. The ~20% is the true "this unit as a TIC vs the identical unit as a condo" gap.

The nuance in your favor: the discount is compressing. The arrival of 30-yr fixed financing removes the biggest historical driver (ARM/reset risk), and a developer on Reddit notes LA/SF TICs are "much more mature and much closer to condos." A top-quality renovated unit in a strong submarket with a fractional-loan-ready agreement can realistically land at condo-minus-10-to-15 today, not the legacy minus-20-to-25. But minus-0 (full parity) is not supported by a single firsthand data point in this research.

My recommendation (your call): do NOT underwrite to full parity. Underwrite the base case at condo-minus-15%, show parity as the upside case, and stress-test at minus-25% downside. Only greenlight deals that still clear your GREEN threshold at minus-15. This barely dents the thesis — because $/sf falls with unit count on the buy side, the fourplex arbitrage still grows — but it stops the model from betting its whole margin on the one number the market evidence contradicts. Practically: add a discount slider to the calculator (default 15%) and re-run the six archetypes.

I have NOT changed the prospectus or the locked decision. Tell me which way you want it and I'll re-run the numbers.

6. CONCENTRATION RISK + MITIGATION

The resale side leans on NCB (retail) + 5th Street (wholesale) + a few LOs. If one exits — exactly what happened when Sterling died — buyer financing tightens overnight. Mitigations, in order:

1. Lock a 5th Street broker AE now and pre-clear a sample 2-4 unit LA scenario, so there's a proven wholesale path before the first acquisition.
2. Build standing relationships with 2-3 LA LOs (Friedman, Jeanes, Belfor, Trejo) — they're the durable layer that survives bank exits.
3. Offer a sponsor default-guarantee (Pacaso-style) to bring a new portfolio lender to the table.
4. Publish the live lender list to every buyer (TRG/The Rental Girl already does this) — removing the "can I even get a loan?" objection is a sales tool, not just risk management.
5. Track new entrants: A Good Lender references "three more lenders developing programs" — new capacity directly de-risks resale.

7. COMPETITIVE + ECOSYSTEM NOTES

• Jason Meissner — a Pasadena flipper running essentially CCRE's exact model (buy, renovate, sell as TIC units), posting on BiggerPockets. Direct local peer to study.
• The Rental Girl / TRG Real Estate — LA's TIC market leader (450+ homes, $425M volume). Both a potential listing channel AND a competitor. Note: a public Reddit defect horror story names them — the lesson is that renovation quality + honesty is the brand moat for CCRE.
• Andy Sirkin (SirkinLaw) — wrote the industry-standard TIC agreement + the fractional-loan underwriting guidelines the banks use. Covers LA. The attorney to structure with.
• tic.exchange / mortgagetic.com — NOT lenders (listing/directory only). Ignore as financing sources.

8. LEADS STILL TO CHASE (phone calls, high value)

1. 5th Street Capital — line up a specific broker AE, pre-clear a 2-4 unit LA deal. (Highest strategic value.)
2. Identify the funder behind the LA 30-yr-fixed the LOs place — NCB's published product is ARM-only, so a portfolio investor or 5th Street is behind it. Nail it down so the prospectus can name it.
3. Redwood CU — confirm they'll fund an LA-county TIC (adds a strong CU option).
4. Patelco — on the fresh roster but no TIC page on its own site; confirm the product.
5. Rule Comerica / First Republic-Chase in or out with one call each.
6. Ask TRG + the LA TIC brokerages for their live lender lists — buyers say the selling agents keep the current roster.

Sources: all URLs, quotes, and Reddit permalinks are in 10a_tic_lenders_verified.md, 10b_coop_altstructure_verified.md, and 10c_reddit_forums_firsthand.md (same folder). Every VERIFIED-ACTIVE lender was confirmed on its own live website on 2026-07-17.