As a plugged-in reader noted this morning, the sales office at Cubix (766 Harrison) never managed to re-organize and re-open and a trustee sale of the unsold condos is scheduled for the courthouse steps this afternoon at 2 p.m. The outstanding developer’s loan balance on the building is $21,050,440.
According to our sources the loan balance is split roughly two-thirds ($14M) on a first and one-third ($7M) on a second, today’s trustee sale is likely a move to simply wipe out the second, and the unsold inventory includes 80 of the 98 residential units and the commercial space (i.e., 18 of the condos, including 7 BMRs, actually sold).
We know of at least one pre-emptive offer that was made and rejected for the units. And as an aside, Temecula Valley Bank which holds the first has been taken over by the FDIC.
As always, we’ll keep you posted and plugged-in.
UPDATE: With an opening bid of $5,000,000 but no bidders, the auction of Cubix likely played out as planned (as written above “today’s trustee sale is likely a move to simply wipe out the second”). And as a plugged-in reader correctly notes:
“As I suspected, you could not have bought it for 5 million as the trustee had instructions to check back with the lender if any bidders came to the the starting price. BTW, my source says George Hauser (developer) made an appearance at the steps.”
Let the real bids begin.
I am so surpised this building was allowed through the planning department. Isn’t the palnning department suupposed to apply some sort of logic such as” will this benefit the neigbhorhood in the long term?
This is prime example of good on paper design. On paper the frveloper makes money. tehe porble is reality. Very few people want to live like a chicken in an egg factory.
Maybe the develepors can tradethe debt to the city and the city can use it homeless transitional housing for seniors.
Who holds the second? I doubt that anyone would even step up and pay $14 million for what is left. It will be interesting to see what this finally liquidates for after the FDIC gets it as part of take over of TVB.
At some price, these become desirable. That price is just not high $200ks
At, say, $80k, I might buy one as a small studio/escape space. Use one wall as a photography backdrop, do all the post production there, and it would make an okay place to live temporarily while renovating a primary residence.
Not my cup of tea, but would make an okay residence for a mistress/escort on the side too, if you’re into that sort of thing.
kathleen – there’s nothing wrong with these units, and I applaud the planning department allowing this type of development (wish there were many more in other parts of town too). The problem is entirely price and/or how the building is used (as for sale or rental). At the right price (as for sale units) these would be great (sub 100k). As rentals, these would be even better.
How many of the 18 units that actually sold (18.4% of the inventory) were BMR units?
I hope no one put his own money down at those ridiculous “market” prices.
[Editor’s Note: We believe 7 of the 98 units in the building were BMR.]
what happens to the owners of the 18 that were actually sold? Is this HOA screwed?
Thinking 18 people bought into this con… Amazing.
21M / 80 units =~ 260K/unit!!!
Or about 2.5 times what I would pay per unit for rental purposes.
As I said earlier, these would make nice “care not cash” units. We just need the city to buy the 80 leftover units once it’s a REO for 30 cents on a dollar and get 80 guys or couples out of a Tenderloin subsidized “hotel”. Affordable housing here we come.
I agree with the poster above who asks where was the adult supervision in this project?
Recommendation: Convert quickly to a hotel and everyone move on. Whatever permits are required to allow that, expedite ’em.
Hotel? These have kitchen, therefore residential hotel would be the way.
wow! that entire situation is a royal mess. it’s fitting that the fdic is now involved… could it get any sloppier?
On Jul 17 2009 Temecula Valley Bank was closed and went into recievership to the FDIC. From the FDIC.gov website:
“On Friday, July 17, 2009, Temecula Valley Bank, Temecula, CA was closed by the California Department of Financial Institutions, and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.
The FDIC has assembled useful information regarding your relationship with this institution. Besides a checking account, you may have Certificates of Deposit, a car loan, a business checking account, a commercial loan, a Social Security direct deposit, and other relationships with the institution. The FDIC has compiled the following information, which should answer many of your questions.”
I agree with the rr and anon that “there’s nothing wrong with these units….The problem is entirely price…,” but couldn’t you say the same thing for lots of (most?) SF properties featured on Socketsite.
For example, see the thread immediately below this one on 1578 Noe. There’s nothing wrong with 1578 Noe at 2BR/1.5BA….The problem is entirely the price at $1.075m….
Indeed, on most SF properties, the problem is entirely the price at $[insert the current overpriced asking]. Apparently, this wasn’t as obvious in 2005-2007, which presumably is when Cubix was being penciled out (although it certainly was obvious at that time to me). In mid-2009, however, it is screamingly obvious. High $200s for a tiny studio? $1.075 for a perfectly adequate 2BR/1.5BA house in Noe?
“The problem is entirely with the price….”
The market supervised the developers and they are paying the price, but who was supervising the 18 buyers’ agents who have already collected their commissions and moved on leaving their clients to pay the price?
I moved here to get away from high density housing. Keep it east of Van Ness.
Oh gosh…must resist agent bash, must resist agent bash. ARGHH! I agree with Michael “who was supervising the…agents?” I can hear it now: “This is perfect for you!”
Agreed, that these would be great “care not cash” units.
Mark D – I agree with your statement, I was just disagreeing with Kathleen’s statement that the planning department shouldn’t have allowed these to be built. A lot of people like small spaces, just like a lot of people like large spaces. Neither types of people like paying way too much for their space.
Of course the problem is the price. It always is. People will buy garbage if the price is low enough. There are houses for sale on eBay – tear-downs in impoverished ghost towns that you don’t want to live in and no one will rent from you. Buying a house like that is no different from flushing money down the toilet. Yet people still buy them because they can be had for under $500. So sure, at a certain price these units will move, but that doesn’t mean Cubix is a good idea. The fact that reasonable buyers will not get one unless the price is near dirt-cheap means it’s most certainly a bad idea.
Definitely agree with rr/SFS that residential hotels for mistresses of cheapskates is the best use of the property. Also agree with Mark D’s observation that supply and demand curves do cross.
Deflations have a great way of clarifying things. To see just how potent this force is, re-read some of the original comments about Cubix.
Where is the trustee’s sale? Is it public?
in my opinion these have just crossed the line for being too small. for a “city crash pad” why not rent a hotel. you’d be paying perpetual HOA/proptax/utilities on this. for the mistress shag pad, i don’t think a mistress will want to be set up in a place this small (plus i don’t agree with the moral side of it). maybe in a city that’s 3x as dense and you just HAD to live this close to the city for personal reasons, AND if the surroundings were safe and vibrant at night so that you’d only be going home to shower and sleep – which is not the case here.
This building would be great for rental housing. Convenient location and perfect size for people just moving into the city, e.g. after completing school, before one has accumulated too much furniture. Buying makes more sense if one knows one can continue to live in a space for several years. Since these units only have enough space for single people, being locked into ownership when one might become coupled (and perhaps start a family) is a real disadvantage.
Well, this is just dreadful news. It will drag down SOMA condo values. This will probably cause a ripple effect and may take another development or two with it.
All you renters can laugh with glee, but in the end it will be the City who suffers most (from lowered property tax receipts).
M.R.
Thoughtful post, Dan. Get this building into the rental pool.
I moved here to get away from high density housing. Keep it east of Van Ness.
You moved to the second densest city in the entire country in order to get away from high density? I don’t understand…what kind of plan is that?
To those who wished for a different price, I just saw that the opening bid for the auction has been reduced to 5,000,000 (but maybe meaningless to bargain shoppers as they have the discretion to bid it up).
If the units were furnished they would make perfect corporate rentals. Don’t know what that market’s like now but 2-1/2 years ago it was almost impossible to find a good furnished rental for less than $3,000 a month
I say someone buys the 80 units for 10M and resells the units for 150-175K each. Market rate catching up on BMRs!
Talking about BMRs, doing a quick sub-200K MLS search, I found this good-ole 333 Bush street. BMR with $800 HOAs!!!
Then again, I also remember about that
Ahhh, memories…
This is why Cubix would be much more appropriate for BMR-style prices. Not very good for income diversity though.
2-1/2 years ago it was almost impossible to find a good furnished rental for less than $3,000 a month
Look up CL. I am surprised at some prices today. Things are so different.
2-1/2 years ago 100s of people would line up around new condo towers to buy places not close to be finished or sometimes even built. Everyone was in panic mode knowing they would be priced out forever! The Subprime earthquake was happening but no subsequent Tsunami would ever come to the City. Of course we know better what to think of that today.
These units were actually a great idea just poorly executed. My major problem was that they were far too small. A size closer to 500 sf would have been much more appealing to the target demographic. These are really micro studios. Also the bathrooms were full size (taking up one third of the liveable space)which made absolutely no sense.
So the auction was at 2pm? Does anyone know the results???
This development is fine, just overpriced. The units that sold are the ones with better features such as good views, private patios, more space, skylights, taller ceilings, loft storage areas and such. The location is also really good for people who have steady jobs nearby.
The BMR units did not have superior features, and the whole BMR program is kind of a dud because anyone who can afford bubble prices needs to make more than the maximum allowed compensation.
If you don’t like smaller places that’s great, but don’t project judgements like that on others. For many anything under 1000sqft or so and without a garden is too small, so city places for those folks are used during the week and some other retreat gets used on weekends. If a place is only used during the week anyway, then why should it be large?
“Also the bathrooms were full size (taking up one third of the liveable space)which made absolutely no sense.”
Yes those large bathrooms are odd. Perhaps this is due to an ADA requirement ? Bathrooms need to be large enough to accommodate a wheelchair ?
Does anyone know ?
I’d like to see how the people who actually moved in arranged their places.
My opinion is that the price, size and location were all to blame for the demise of this project that should have never been approved in the first place.
I actually moved in and I can tell you a couple of things I did for arranging.
First, I made sure there was plenty of room for a path between the kitchen and the front door so that when I sold off the range and refrigerator, the buyers of these items had no problems getting them out.
Second, I didn’t put anything near the kitchen cabinets, so that when I sold them off, the buyers of them didn’t disturb my furnishings ripping them out.
Finally, I used only kerosene lamps so that I could take out the copper wiring.
OK, so maybe I didn’t really move in, but that’s about the only way to properly decorate a unit that dropped in value by about half within months of your moving in!
HA HA nearly $300K for “Cubix”!? What the hell were these buyers smoking when they convinced themselves it would be a good idea to buy here!?
Well, this is just dreadful news. It will drag down SOMA condo values…
Not sure about that — Cubix is fairly unique. Can’t imagine anyone pulling out of a normal condo deal to buy one of these matchboxes. However, when The Millennium goes into foreclosure — that will be more interesting.
All you renters can laugh with glee, but in the end it will be the City who suffers most (from lowered property tax receipts)…
I’m not laughing. Chuckling a bit, yes. But seriously, when something is properly priced, it’s a good thing. Tulips at 3000 florins are bad. Zombie banks are bad. Fake valuations are bad. Each time bubble debt is defaulted upon, my heart warms a bit, because that is a little more debt cleared away, a little more deleverageing accomplished. Now, admittedly, the transition is painful, like removing a tumor. But you want the economy to be tumor-free. We should all cheer as it’s pulled out, one property at a time, one loan at a time.
Interesting that the developer, HausBau, also built the The GlasDore condos at 30 Dore. It’s definitely unique…much like their CubixSF cousin, the floor plan and size probably were built to attract people without any stuff, including furniture. The neighborhood again is a bit dicey and the prices must have not been correct since they still have a few available.
Gone are the days that if you build it they will come.
No bidders @ $5m. Went back to the trustee.
The bathrooms were built full size because research showed that people spend a large fraction of their time in the bathroom. Making that part of the space work well improves the utility of the whole unit. In a small studio the living area will always be severely limited. Shaving space from the bathroom makes that space cramped and unpleasant to use without providing real benefit. Most of this criticism sounds like it comes from people unfamiliar with living in very small spaces.
BankerBoy,
Wow. 5M and no bids. 66K per units and no takers. Incredible news. Were there any “undisclosed reserve” or provision that could have scared off bidders?
I think that tells more about the amount of available money/credit than about the resale market though. I would be surprised no player at this level would wants to take the chance.
yeah, $5m seems like a fair price
but, to actually unload these units would still have taken quite a bit of work
at the end of the day, who would really want to buy one of these, even for 80-100k?
As I suspected, you could not have bought it for 5 million as the trustee had instructions to check back with the lender if any bidders came to the the starting price. BTW, my source says George Hauser (developer) made an appearance at the steps.
It depends on how much the HOA was but I could see someone buying one for 80k or so. It just ends up being really affordable at that price, looking at less then $450 a month before deductions for mortgage and property taxes and the downpayment is only $16k (30-year fixed, 5.5%). Although, I doubt the price will get that low as instead whoever ends up with this place will rent them out rather then sell them at less then 100k.
The remaining 80 units are worth $3.2M as-is. Assuming these sell retail for $80k (-ish) to “investors” (who will never see a return even at $80k apiece) is the only way forward. The buyer, at $3.2M, would make an acceptable profit of around $2M-$2.5M net of selling costs and holding costs.
Welcome to the new reality. In the final accounting this will be San Francisco’s first 15-cents-on-the-dollar resale of the new millenium.
what do you guys see as fair values for studios at Baycrest and Portside, which are only slightly larger than these at 400-500 sq ft?
An employee of my company recently rented a studio at the Beacon for $2500/mo during an extended visit. It subsequently re-rented at that rate. Yes, that studio was much nicer than Cubix, but I have to imagine that for an extended-stay business traveler, it would make total sense to rent a Cubix room for $1500/mo.
If you could rent it out at that price for 10 months a year, then even a conservative P-E would justify a price of about $180,000… which is what I think that these things will move at if this economy recovers.
80K a piece? Just buy 10 of them and your looking at about 3000 sq. ft. Convert the building to a 10 unit building and that $5M starts to look attractive.
To say this building failed because of price is silly. It never would have left the concept stage with true market value pricing.
A building full of studios is of no great appeal to investors, at that price point.
Investors prefer to buy buildings with a mix of unit sized and a minimum of small spaces, as the small spaces are uploaded with all the expensive items (kitchens and baths) that require maintenance and repair.
For 5 million you can buy multi-family in location neighborhoods woh great return on investment. for 27 million think 1100 Sacramento, not Cubix.
I have spend the two plus years desparately trying to talk another developer out of building another building full of small spaces.
I think it is too risky.
I congratulate people who like small spaces. I an nothing against small spaces. They are very hard to sell.
You take a great risk when you write a song with only one note.
Excuse me for being slow, how the planning department could green light a one trick pony problem in a two star location, and even less how a lender would fork over that amount of funds.
So am I too dull to understand or is it the lender?
Don’t worry I can take it. And don’t forget to bailout those lenders, who clearly failed all the way to the FDIC.
Still wouldn’t it be grand if the title holder could trade the building to the city for use as a Senior homeless housing, in exchange for property/business tax credits that could be sold at a discount on a secondary market.
That could be a win win.
At $80k, mortgage of $500/mo, HOAs of $300/mo (they will get there if not higher soon enough), total costs $800/mo, rent is between $1100 and $1200/mo so you are looking at, best estimate, $4800 profit per year on a $80k investment net of costs — that’s 6% if you have a mortgage, around 11% if you don’t. That doesn’t account for vacancy or any repairs inside the unit.
Anyone who’s willing to shell out $180k to obtain $14,400/year in rental income deserves what happens to them.
Convert the building to a 10 unit building and that $5M starts to look attractive.
can you do that?
Building/renovating/developing is so onerous in SF much in part to the ridiculous zoning/building laws. I’m not sure you can combine these units without some legal finagling.
anybody?
Combining low-cost units is impossible. You’re removing affordable housing stock from the market. Its a total non-starter in SF.
Best bet is a fleabag SRO hotel [Removed by Editor]. Put a dope dispensary (“medical marijuana”, sorry) on the ground floor and call it a day.
When this was being built, I thought it would end up as low-income housing(but then, I think most of the condolofts built in the last ten years will end up as low-income housing). Now, I’m not so sure.
Now(with tongue slightly in cheek), I think it’s most likely to become a sewing sweatshop (tear down the walls, pull out the stone, sell off the appliances, and put in some fans).
The reverse migration from Bayshore and South City can begin: welcome back, Big Flower Dynasty Lucky Sewing Co.!
I don’t know why Kathleen blames the planning department. The City’s policy is to encourage HOUSING. This building provides alot of housing, and it would be wonderfu if developers would build alot more of this (all east of Van Ness, naturally… It is not the city’s role to tell a developer if they are smoking crack. (OK, it is sometimes a developer’s role to tell the city that….). Lenders should be ashamed of themselves, but we know that already…..
I agree with several of the posters that this will make great rental housing. And at the right price I could see an investor (or potentially a non-profit housing org) interested. It never made sense to me as for-sale housing, because the unit sizes are just too small, and very few people would want to stay here full time for more than a couple of years.
The planning department does not exist to encourage housing.
from their site:
The Planning Department implements its stated mission of the orderly use of land through adoption of General Plan policies and application of these policies and the requirements of the Planning Code and Zoning Regulations to permit approvals.
Why anyone would want to encourage more projects along this line when there exists a tall monument to failure called “cubix” is confounding to me.
Lets waste space and resources building really expensive tiny housing without any regard for market demand.
The city has role in the orderly use of land, and if they see a developer is smoking crack they should do one of two things: a) say put the pipe down, or b) pass the pipe over to the board, they want a hit, too.
It’s not housing if no one lives there.
It’s then a primarily empty building which (royal)we call a huge waste of space.
It’s then a primarily empty building which (royal)we call a huge waste of space.
For a very, very, very trivial amount of time in the whole scheme of things. One way or another, this project will be sold to someone who will put it to use as housing, just at much more reasonable levels. And guess what? Instead of it being 30 empty larger units for a little bit before taking a huge razor to the price, it will be 98 units renting for a decent amount to people who need a smaller space near downtown for their first few years in the city.
We desperately need more small, modern housing like this for young’uns. Only it needs to be rental, as this will no doubt primarily be in a matter of months/years. It makes sense for it to be condo-mapped, just because there’s no advantage to not do that, but it doesn’t need to be for-sale housing.
Actually, small spaces can work quite well. There is an apartment management company that took a SOMA Victorian and chopped it up into about 60 small bedrooms which they rent for about $750/month each, furnished, utilities paid (including WIFI), month-to-month lease. The rooms are tiny. Furniture consists of a single loft bed with a space underneath the bed for a desk and a small refrigerator. Shared bathrooms down the hall. Strict rules to keep out the druggies. Oriented towards working class types on low salaries. Low price keeps vacancies down (at least up until recently). $750 * 60 * 12 – minimal repairs = cash flow city.
The problem with this Cubix building is the cost, not the size of the units. Build tons of studios for under $50K each and rent them for under $600/month you can make serious bucks. It’s sort of like Walmart versus Neiman Marcus–which do you think more likely to prosper in the slow-growth days ahead?
I hope other condo developers in the area hear this wake up call. Many of the new condo developers are still asking prices that are way too high for current market conditions (check out $$/sqft @ Blu and 829 Folsom).
I wonder if this is a sign of more to come ?
Take a building designed to be sold for $1000/sf and sell it at $300/sf (who knows?) and you’ve got affordable quality!
I say please please build more of these! More supply means lower prices. Everyone loves cheap quality housing.
What?
I hear some complaint from the back…
OK, I looks like not everyone loves cheap quality housing. First of all not the professionals (2.5% X cheap = miser), but then again who cares?
Fred, where is this SOMA Victorian, or what is the apartment mgt. company? I think this would be a fascinating story for a friend of mine who works for SFGate. Talk about “density”!
Small is relative. If you have been to Tokyo or Hong Kong, a 400 sf unit is quite standard and it frequently has three bedrooms and accommodates a family. There is no such thing as closing doors as there is no room for the door to swing – curtains offer whatever privacy. Pocket door separates the 6 x 4 bathroom with a square tub and a 22 in toilet. Yes, you bath standing up or sit on a small stool. Oh, and you share that tight shower/bath space with a wall mount propane water heater. In cheaper units, there is NO tub, just tiled floor with a drain. Stacking washer and dryer, stacking 18″ freezer and 18″ refrigerator, stacking everything. Mind you these are not third world countries we are talking about. Cubix looks outright luxurious and cheap by comparison. Some of you can dig up a featured article on Socketsite last year on a lovely 400 sf Hong Kong unit created by an architect who grew up in that apartment with his parents and two siblings. So the Cubix concept is not out of the question. May be just not for us that are spoiled…
Justin: I forget. I saw the ad somewhere and looked into the place because it seemed to fit my needs, but passed on it because I didn’t want to bother with a security deposit on a place that I might not be in for more than a few months. This was back in 2005. I was traveling about 9 months a year then, but I also wanted a permanent home base in San Francisco rather than relying on hotels, and I had abandoned all my furniture in Washington DC, so a furnished place was a bonus. You can probably find the place advertising in the rentals section of the Chronicle or SFweekly. BTW the density is surely nothing compared to what you’ll find in Chinatown.
Well, someone has to say it. We’re all Cubix now..
Is Millenium a failure because it is still mostly empty? I think the answer for both is “it is too soon to tell.”
I think there is a screaming need for inexpensive housing this size, but time will tell.
“Is Millenium a failure because it is still mostly empty?”
Millenium is fine, it is the developers who are a failure.
They will default on their loans, the property will be sold to someone with a lower cost basis and the units will be cut to a price at which they will sell. It will still be exactly the same building once the prices are cut.
There is a buyer for every dwelling in the county of SF once the price is right.
“An employee of my company recently rented a studio at the Beacon for $2500/mo during an extended visit.”
That’s rather over-priced. You should be able to get a full one bedroom w/ parking and view for less.
A 700 sf studio at Port Side I w/ parking and water view was advertised for $1950 recently. I wouldn’t pay more than $1500 for 500 sf. Which means, it’s worth $300k to me at the most.
Its not about size, it is about economic feasability.
Is it a good affordable housing model to hope some developers fail? The failure of any planned housing project, big, small, low income, moderate or luxury, failure indicates wasted resources.
Surely it’s better when the plans are ecomomically sustainable and both developer and community win.
Someone reviews these plans, that is why I blame to some degree the planning department.
When a development hits the city hall auction steps, a lot of someones are loosing, not just the developer.
If the right price means millions are lost you would think it might have gotten noticed by someone somewhere before dirt turned over.
Kathleen, are you saying that somehow the developer would be peachy if they had only developed bigger units? I think I’ve noticed a few other properties and developers and individual owners that are having financial problems these days. Planning should have never let 333 Bush get built either in 1986, because the current owner was foreclosed upon this week. Is that what you’re saying?
You’re not making much sense. The LAST thing that I want is for Planning to start trying to evaluate whether a developer is going to make money on a project or not. You’d think the private sector can handle that part a bit better.
Kathleen, there was a bubble.
In a bubble people make decisions that are perfectly reasonable if you assume that the bubble prices are real. Once the bubble prices go away all of the decisions that were made on the basis of those prices are revealed to be monumentally stupid. Like paying 4000 florins for a tulip bulb.
This development would have been a gold mine if they had opened two years earlier and had gotten $1000/sqft for the units. It was perfectly economically feasible if you assumed that the bubble prices would last.
i wonder how much those BMR units sold for? If these condos do come back and sold for 80k each, I bet that price point will be lower than the BMR units that were sold earlier. If that’s the case, can BMR unit owners sue anyone? After all, it’s no longer a below market rate units since it’s probably at least 50% above market rate units. Talk about irony.
Also I do wonder if the Cubix owner did any market research? Most Americans cannot tolerate 400sqft units for long term living. Maybe a year or two. Definitely not 5-10 years or more.
Outsider,
Why the comparison with Tokyo or Hong Kong?
People living in SF can live for 1/2 or less of the cost across the bay which is not that far. Try that in Tokyo or HK. They can go down the peninsula and get all the space they want all for an extra hour/day commute. 300sf is not a fatality here. Maybe we’ll get there in 60 years if the BA gets to 15 million souls. It is inevitable in overcrowded asian/european cities, but this country (and this state) is very sparsely populated when compared with any other rich country.
The biggest issue is the uncertainy of the regulatory (read City) environment.
If people could buy them and choose, rentals, salesm hotel — perhaps mix? Them $80,000 a unit is a bargin. But to buy and not know what the City might dictate? That sounds like a recipe for bankruptacy.
^^^The developer could have easily chosen rental or for-sale. The city didn’t dictate that these had to be for-sale and typically doesn’t for housing. All up to the developer.
And the developer can easily mix rental and for-sale. Many, many other developers are doing that in other buildings.
It is the finish, and size,to me.
When I toured the units, it reminded me of refugee camp, although I have never been to one.
Jimmy (No Longer Bitter) wrote:
> At $80k, mortgage of $500/mo, HOAs of $300/mo,
> total costs $800/mo, rent is between $1100 and
> $1200/mo so you are looking at, best estimate, $4800
> profit per year on a $80k investment net of costs –
> that’s 6% if you have a mortgage, around 11% if you don’t.
> That doesn’t account for vacancy or any repairs inside
> the unit.
If we assume an all cash sale and $4,800 profit we will also need to back out:
Property Taxes: $920
Vacancy (5%): $720
Management (6%): $864
Maintenance: $250
Insurance*: $250
*Most property Insurance will be covered by the HOA, but most rental condo owners will want some personal liability insurance.
on a 2nd thought, IDEA has some 200 sq ft model rooms that are just absolutely cute. So, size may not be the issue here.
the trouble i have with comparisons to HK and tokyo is that those cities are vibrant and safe and are 24-hour cities, and even if you don’t live in the central areas, there is good public transport to get around with. thus young people can hop around the city and the neighborhood and then come home to shower and sleep. in most u.s. cities including sf soma one has not much business walking around or hanging out around neighborhood at night so naturally the home has to be more livable and require more space.
ester wrote:
When I toured the units, it reminded me of refugee camp, although I have never been to one.
This one just made it to the very top of my ester great hall of fame!
Cubix didn’t sell because it was an overpriced project! It’s because the Janjaweeds are raiding the area every other day! They leave nasty scratches on the SS appliances with their 4-feet long cimeters.
Any other excuse for plummeting prices for condo developments? Locusts? Tsunamis? Famines?
@rr who said would make an okay residence for a mistress/escort on the side too, if you’re into that sort of thing.
True. Better than renting by the hour and being all sleezy at a dumpy motel on Lombard / 101… 🙂
And before the rest of ya’ll chastise us, think about it. This setup would be safe, secure and fun for both you and your mistress(es) !!
I agree, it’d make a great shag pad.
i think my old boss bought one of these units. i tried to talk him out of it. he just loved that epicenter cafe downstairs and he was from sac-tucky. oh well.
Oh, what could’ve been with a little closet space.
I was interested in looking at the units – since I’m interested in owning fewer things and living in a smaller space, so I am sad to see these guys foreclose.
Whether the $ was reasonable, or whether the layout was smart… is another thing, but I think this was an excellent concept, and perhaps ahead of its time.
I was interested in looking at the units – since I’m interested in owning fewer things and living in a smaller space, so I am sad to see these guys foreclose.
I’d think you’d be pretty happy. Those units aren’t going anywhere, and I bet you’re going to get a chance to buy one of them in the not too distant future at about 50% less than the 11 schlubs who paid full price.
maybe the academy of art should buy it so they can gouge rent it to students.
Editors: any updates? What should we expect to happen next? And when?