Learning Something about BMRs for Infinity and 888 Seventh

Recently, we reported about the brisk selling of the BMR (Below Market Rate) units at 888 Seventh Street, and how they were snatched up in a matter of seconds. Thanks to a reader’s inquiry in the comments of that post, we dug a little deeper and learned that of those 170 BMR units, only 27 are the BMRs for 888 Seventh, the other 143 are the BMRs for the The Infinity. Translation: The Infinity has put all it’s BMR’s off site in 888 Seventh Street. Certainly didn’t know this, but now we do, and so do you.

-Mayor’s Office of Housing [website]
-1 Part Infinity, 1 Part Dwell, 2 Parts You! [sfn BLOG]

A Very Simple Explanation of the Complex 1031 Tax-Deferred Exchange

We recently received a few questions about 1031 Exchanges, and the short answer…they’re pretty simple, but also complicated. How’s that for a politician’s answer? Joking aside, we thought this brief description from The Money Alert was pretty good.

“Established for real estate barons and tycoons, 1031 exchanges have been around since the 1920s. Named for the IRS code which refers to them, the tax-saving tool also known as “flipping” or a “like-kind” exchange has been gaining traction as a way for Americans to save money on taxes from property, by
deferring them to another, newly-purchased property.

1031 exchanges are a simple concept surrounded by not-so-simple details. If you own a piece of property, and you wish to sell it and buy another piece of property of equal or greater value, you can defer your capital gains taxes by performing a “like-kind” exchange.

The Potrero: Developer’s Specials

Our friends at The Potrero, Potrero Hill’s newest development with prices starting at $404,880 for a studio, and working their way up from there for one and two bedroom condos, and two and three bedroom townhomes, have decided to release a few “developer’s specials”, and you’re hearing it here first. [Update: they just hit MLS.]
If you are interested in these developer’s specials (we were), you simply need to go to the sales office and “tell them sfnewsletter sent you.” They’ll be happy to give you all the details and show you around. Here’s what we can tell:
#475- $569,800
1 bedroom/1 bathroom
661 SF
Located on North Courtyard
* Includes Fischer Paykel Refrigerator & GE Super Capacity Washer & Dryer

#382- $739,880
2 Bedrooms/2 Bathrooms
932 SF
Located on Rhode Island St.
* Includes Fischer Paykel Refrigerator & GE Super Capacity Washer & Dryer

#442- $785,880
2 Bedrooms/ 2.5 Bathroom Townhome
1047 SF
Located on Mariposa St.
Gas Stove
* Includes Fischer Paykel Refrigerator & GE Super Capacity Washer & Dryer

#492- $769,880
2 Bedrooms/ 2.5 Bathrooms
964 SF
Top Floor Corner Home
* Includes Fischer Paykel Refrigerator & GE Super Capacity Washer & Dryer

So what’s the big deal? You save a minimum of $25,000, these units were not offered for sale previously, include appliances, and unit #442 is in the South Building and not yet available to the general public.
So head on down to 444 De Haro, tell them sfnewsletter sent you and make yourself at home.

The Potrero [website]
[images taken from The Potrero Website]

Ask an Expert (Elaine Larkin), Comparing Condo to SFR in NOPA

“My wife and I live in NOPA and I look forward to hearing your take on the area in your Tour de SF. One question – when comps are listed for condos v. single family homes, do you think it’s fair to ascribe additional value to condos that are housed in a former single family home (e.g. ours, with just one other condo above us)? At 1300 sf, our $810,000 flat with parking is definitely above the average condo price per sf in the area…”
A.W.-San Francisco, North Panhandle
_______________________________

As answered by Elaine Larkin, Hill & Co. Real Estate
Smaller buildings have more appeal to some people because you have the extra amenity of your own private entrance versus a common entry hall. And flats tend to be larger square footage as well. I assume you are talking about a 2 unit building rather than a single family dwelling.
Elaine Larkin

Ask an Expert (Alexander Clark), Investment Property in Mission Bay?

“Can I ask what your opinion is about buying an investment property
down at the mission bay area now? You know, the ones like on King or
Berry street. Do you think those prices are coming down and do you
think they will come down? I saw on your last “sold” list, they were
all under asking. I would think of an investment property for 5-10
years down the line.”
D.C.-San Francisco

_____________________

As answered by Alexander Clark, sfnewsletter
Are you asking specifically about the ones on King or Berry, or that area in general? If you’re buying 5-10 year holds, I’d buy. Prices have dipped and may do so a bit more with all the inventory available down there, but I still think for the time frame you are talking it is a very solid investment. One building I checked out and really like is 170 Off third (not necessarily Mission Bay). There are studio and 1br units under $500k there, that are a Giants lovers dream “pied a terre”. That place has the location nailed as well as the amenities. Wasn’t excited about the granite counters, but those can be switched out.
Thanks for writing in,
alex clark

Ask an Expert (Alexander Clark), Comparing Condo to SFR in NOPA

“My wife and I live in NOPA and I look forward to hearing your take on the area in your Tour de SF. One question – when comps are listed for condos v. single family homes, do you think it’s fair to ascribe additional value to condos that are housed in a former single family home (e.g. ours, with just one other condo above us)? At 1300 sf, our $810,000 flat with parking is definitely above the average condo price per sf in the area…”
A.W.-San Francisco, North Panhandle
_______________________________

As answered by Alexander Clark, sfnewsletter
A two unit building that has two condos is typically more desirable than a multi-unit condo building, but it’s really hard to judge without seeing the units that are being compared. As far as adding value to a property that was previously a single family, that could actually play against you as the floorplan might be pretty cut up. Now if you were able to sell your entire building (both units) at the same time, with permits to convert BACK to a single family, that could play heavily in your advantage. Again, I’d have to get inside. Don’t take offense to this, but if your condo is a dump compared to a condo that is a gem in a large building, the larger building condo will be more valuable (obviously), and vice-versa. That is where computers, zillow, Property Shark, Clean Offer, and all these new programs fail…actually going into the building. It works in tract home developments in Sacramento, not here.

It is a tough question to answer because there is no cut and dry. Basically, to answer your very question you wrote, no. There are way too many unique properties here, and that is too difficult a calculation to make simple. Compare your condo to other condos, not single family.

Thanks for writing in.
alex

Rent vs. Buy…the old debate…in an interactive graph

A few readers sent us this totally cool link, and so we must post for it you.

Is It Better to Buy or Rent?
Compare the costs of renting and buying equivalent homes. Click
CALCULATE each time you change an entry.
We had some fun with this for a while. Make sure to tweak the sliders. According to Dataquick, you can use a 2.4% appreciation for San Francisco.  What was that game show that spun that wheel and the players said, “big money, big money, no whammies?” We’ll substitute to apply to us, “Come on big appreciation, no Whammies!”
Of course, it could be a good time to buy rental property and collect those rents.

-Is it better to rent or buy graph [NY Times Online]
-Is it better to rent or buy article [NY Times Online]
-Inger Hogstrom Photography [one of the readers that sent us the link]

Public School Assignments are in

 

So you move to San Francisco, you get out-bid on your first home, then again on your second, and finally you get the home of your dreams, a TIC that just won the condo conversion lottery.  You’re excited about the neighborhood, you’ve seen the school down the street, and Wham!  Reality hits.  Your child might not get in to that school.  Fear not!  The bad news…there is competition for the “most desired” schools.  The good news…if you do your research, you’ll find there are many, many great public schools in San Francisco a short distance from that dream home you just picked up. 

Last Friday, March 16th, the SFUSD mailed to all applicants, notification of their child’s school of assignment (lottery results).  There were many families thrilled their child got accepted into a school of their choice, and many families were utterly disappointed that they did not get so much as one of their seven choices.  Hey, look on the bright side… college applications will be a walk in the park.

-Details, details, details [San Francisco Unified School District Website]
-chart pulled from SFUSD website

Ask an Expert, to rent or not (this is a doozy)

“I recently purchased a building consisting of two flats. I did a quick refurbishment of the interior and currently need to find tenants. HOWEVER, I may end up doing something vastly different with the property in the near future. As such, I can’t offically rent out the units under a contract because I may need to have the tenants leave after a certain period of time. SF is hyper-protective of tenant’s rights so I thought about just subletting the units. But should I then offer the flats furnished? Do you have any thoughts? I’d appreciate any advice!
Many thanks, SG”
—————————-
As answered by Alexander Clark, sfnewsletter

SG,
I can see where you are going with this as the city has a huge lock-down on property owners and their rights of ownership/possession. I don’t know where your building is, but a corporate short term rental may be ideal. With that said, my advice, talk to a good attorney. I can recommend David Gellman of Goldstein, Gellman, Melbostad, Gibson & Harris, LLP, www.g3mh.com. Thanks for asking.  I hate when I have to defer for liability’s sake, mais c’est la vie dans les Etats-Unis!

—————————-
As answered by Eddie O’Sullivan, www.buysellmysfhome.com

Hey SG,

Tenant issues in SF are like playing with fire, be careful as you can get burned very easily. If you cash a check for a month’s rent, you have given that person tenancy even if there is no contract.

If you are willing to furnish the units and they are well located I would look for a company that handles excutive rentals. Then you will get top dollar and you’ll have tenants who are only passing though town for 3 to 6 months!

Be careful and good luck!
Eddie O’

“California has a lot of strengths, but even so, we’re seeing more of our young people relocate out of state,”

Very concerning quote indeed. BizJournals Article, but look at the alternatives…Wichita, Kansas? No thanks.

10 Most Affordable Markets-You won’t find us in any of those places.

10 Least Affordable Markets-Guess which city is on top? Damn! How’d you know.

[All articles taken from www.bizjournals.com...a highly recommended publication!] No they didn’t pay us for that.

Annual Allowable Rent Increase Announced

“Rent Board Adjusts Annual Allowable Rent Increase and Interest Payable on Security Deposits

The annual allowable rent increase for the period March 1, 2007, through February 29, 2008, has been announced by the city’s Rent Board. The allowable rent increase is 1.5 percent. The amount is based on 60 percent of the increase in the Consumer Price Index for All Urban Consumers in the Bay Area, which was 2.5 percent as posted in November 2006 by the Bureau of Labor Statistics.

The security deposit interest rate for the period March 1, 2007, through February 29, 2008, also has been announced by the city’s Rent Board. That rate is 5.2 percent. The rate for March 1, 2006, through February 28, 2007 was 3.7 percent.”
-SFAR Realtor Advantage Online

Getting back your investment on “non-bling system upgrades”

The following information is provided to you by Rik Goodell of Goodell Structural Services.

Maybe you’ve got a contractor’s heart.  How to tell?  Okay, here’s a sure sign:  If you are the type who has upgraded (read: spent thousands $$$ on)  your home but you can’t tell by looking at it, then the bucks have probably been coughed up for a new furnace, electrical service, plumbing system, roof, seismic upgrades or all of the above. 

If this shoe fits, you know how painful it is when you get to the point where, unexpectedly, you have to sell the place.  Now you’re wondering how you are going to get your money back for all those recent, but typically unappreciated, expenses.  We all know that the shiny granite in a newly remodeled kitchen or the latest European fixtures in an upgraded bathroom will dazzle the prospective buyer.  But how are they going to admire (and be willing to pay for) the more subtle, and arguably more important, non-bling system upgrades?

We are blessed in San Francisco with many, highly qualified and very experienced home inspectors (find yours here:  ggashi.com).  San Francisco Real Estate is unique (It really is!) so we‘ve even given this house exam a different name.  Instead of the home inspection you’d find in the east bay or on the peninsula, we call it a Contractor’s Inspection.  Call one of these pros for a pre-listing inspection and then use their report as a brochure to highlight those wonderful, albeit subtle, upgrades.  The report will be from an independent, who has no axe to grind or agenda beyond discovering and defining the problems so it is generally seen as an honest representation.

The marketing angle then can be:  “Clean Slate House” with new systems and good bones ready for your own personal touches.