Purchased for $820,000 in March 2002, the then three-unit building at 442 Holloway Avenue was refinanced in 2006 with a loan in the amount of $945,000.
In February 2008 a Notice of Default (NOD) was delivered on the Ingleside (District 3H) property. And yesterday, almost two years later, the now five-unit building with two unwarranted kitchens finally hit the courthouse steps.
Despite a first mortgage balance due of $1,133,872 including fees, the bidding started at $527,558. It closed four bids later with a sale at $528,500 (the only courthouse sale of the day in San Francisco). We’ll let you draw your own conclusions as to just how competitive the bidding between the two bidders seemed.
Oh, and if you’re in the process of submitting an offer on the Active MLS listing for 442 Holloway at $1,425,000, keep in mind the sellers no longer have anything to sell (and thank your lucky stars).
∙ Listing: 442 Holloway Avenue – $1,425,000 [MLS]
∙ San Francisco Real Estate Districts: Maps And Neighborhoods [SocketSite]
My gut feel is that $528k was a steal here. I don’t know what the RC situation is here, but at market rates surely this would be cash flow positive.
Why weren’t there more bidders at the auction ? Lack of hard cash ? No-one knew about the auction ? 442 is an unlucky number for cultures of 4 continents ?
What gives ?
Wow, sounds like this would definitely be cash-flow positive, as Milkshake said, but you’d need to fix the unwarranted units situation. Also, you may want to go from 5 units down to 4 in that process (1-4 unit properties are less regulated than 5+).
Was this judicially foreclosed? If so, note that the buyer theoretically could be liable for a deficiency since this was cash-out refi-ed. (btw, one of the protections of having 4 units or less is that you are exempt from deficiency judgments on a purchase money mortgage)
Ever been to this neighborhood? Priced just about right…
So you are going to the Steps now Adam or is this from a tipster too?
There is less than $1000 between where the bidding started and where it ended. 2 bidders…..that’s like $200 increments. And on a $550k property! Unless the bidders were mafia and scared off any additional bidders…..then, there must be more to this . Or, more probable, that’s all the place is worth.
The lender didn’t seem to think it was worth any more……was that one of the bidders?
Was this judicially foreclosed? If so, note that the buyer theoretically could be liable for a deficiency since this was cash-out refi-ed.
Well, theoretically, Peoples Choice Home Loan Inc would still have to be around. I, for one, am shocked — SHOCKED, I say. This surely can’t be good for the denominator in the price-to-rent ratio…
PS – SS, I heartily endorse the move to the courthouse steps; clearly, this is going to be where the action is in the coming year.
That’s more like it, but still too high.
Was it raining and windy during the auction? I went to the City Hall steps to watch an auction a few months ago during a storm. It was really hard to hear what was going on even thought there were only about eight people there.
(sorta kidding, sorta not)
“still too high” ha! In your dreams.
I say this was a steal. With minimal upgrades, this could very well go for near a million, if not over in the near future. The buyer is going to come into half a million dollars in a short time frame.
But I’ll leave you guys to agreeing with each other.
“still too high”
Nope. Extrapolating from the MLS info this property is taking in about $5K/month. Using the ancient rule of thumb of 120 x rent this property would be a good investment at $600K.
As long as rents hold up this is a perfectly reasonable price to pay.
guess that’s what it takes to get a reasonably priced property in sf, be at the auction, with 500k cash in hand. damn.
“As long as rents hold up”
ha ha ha ha ha
Yeah, rents sure aren’t dropping. Don’t you know, this is boom times!
Go away two beers. You got nothing.
anonn, by “nothing,” I guess you mean “real estate license.” You’re right. I didn’t realize that only bubble “professionals” can post here.
On the surface it may appear that the bidders got a steal, but how many here have seen the building? This building was built originally as two units. It was later converted to 3 units, and now it’s 5 units. IMO, converted units are not worth as much and I (and many others) don’t like them. Don’t think there was any danger of it selling close to 1.4 million in a regular sale, let alone 1.1 million at the steps. The lender did the expedient thing and offloaded this dog on someone else. And diemos, 10x gross may be too much for this one. Sure, they’ll make money, but they will probably spend some more to correct deficiencies (maybe take out a unit?) before it can be sold for a good price. Not worth the risk for me.
This building was built originally as two units.
Hubba, hubba… Did someone just say “Bypass the condo lottery”? Now about those pesky tenants…
Does anyone here know the neighborhood that well? I had a friend who owned a house over on the other side of Ocean, around Miramar. It didn’t seem like the area was sketchy at all.
This is in Ingleside (SFAR district 3h), the other side of Ocean on Miramar is likely in Westwood Park (4r). 4r >> 3h. Area is predominantly single family homes, but I think rentals are good because it’s close to SF State and City College.
This was a 2-unt building, poorly converted to more units. And you also inherit a wacky tenent and another paying 50% less than fair market value. By the way, what were the back-taxes? The listing agent would have NEVER received even half of what he was asking for in MLS.
This building is not worth more than mid-six hundreds…This is not a great deal.
I honestly believe there has to be better opportunities than this.
I know of another one. 4 units in the portola district. Purchased 2 years or so ago for $1.25 mil. Brought at auction this summer for an astounding $500k. Flipped for $770k w/o any additional work. Even at $770k it had an 8.5 grm! Heck, I wanted it at 8.5, and was trying to get them to carry the first. But no go, another buyer came in all cash. Hard to find such a good grm in SF, especially for 4 units.
WRT auction action, I believe that there is a small cadre of local ‘pros’ who buy all cash. They know each other and sometimes take turns/pay one another off on the good deals, so they don’t bid against each other.
Sounds kinda sleazy to me. Anyone have added info on this? But I am still surprised that a regular investor did not step up on the portola 4 units I mentioned above. At $500k that is unbelievable. FYI the units were 3- 2/1’s and 1- 3/1, 4 car car port, shitty early 70’s bldg, but at least concrete foundation and cast iron drain pipe! I font understand why an investor watching SF foreclosures would not bid on their own. I know that the buyers who flipped it were foreclosure pros that buy and flip deals.