CFAH

504 Russia Avenue (Image Source: MapJack.com)
Perhaps it’s just for posterity’s sake and to record what was at 504 Russia Ave before (i.e., today): one-bedroom and one-bath over a garage on a 25’x100’ lot zoned RH-2.
Could it be another 815 Alvarado (albeit a bit more challenging considering its current footprint and neighborhood) in its infancy?
∙ Listing: 504 Russia Avenue (1/1) – $349,000 [MLS] [Map]
An Arts & Crafts 815 Alvarado By The Numbers In Noe [SocketSite]

Comments from Plugged-In Readers

  1. Posted by curmudgeon

    Edwardian? Ha!

  2. Posted by lolcat_94123

    Behold!
    The post-bubble McMansion.

  3. Posted by EBGuy

    FWIW, it’s always struck me that the logical development strategy for these ‘undersized’ places zoned RH-2 would be to build condo-duplexes (versus outsized SFHs favored by bubblenomics). In fact, I imagine a savvy investor/contractor could line up a string of these, sell off one of the units, and then, for their retirement, live in the second unit for up to $500k tax free every two years. I suppose it ties up capital, but I would imagine refinancing a construction loan once the condo is in place would make it (at the very least?), cash flow neutral.

  4. Posted by tipster

    Great idea EBGuy. Lets run some back of the envelope calculations:
    It looks like prices for SFRs are running about $300-$400 psft in that area. If you can get a total of 2500 square feet on that lot (2 1200 square foot condos) constructed for 250 psft (low side), and sell it for 400 psft (high side), that leaves you 150 psft to cover your other non-construction expenses and profit.
    150 psft x 2500 square feet means you have $375K to spend, plus carrying costs and profit. I’m thinking carrying costs and permit and design fees will run $25.99K.
    The seller wants $349K, leaving you with $10 left over to pay the realtors, and then the rest is just puuuure profit!
    Woo hoo!

  5. Posted by Trip

    This is just a joke. One can buy real, decent homes in the Excelsior for not that much more than this. As tipster’s numbers show, this sale only makes sense if you obtain the lot for basically free. If you are really good with keeping costs contained and proceed with a modified EBGuy proposal and you live in one unit and sell/rent the other, you may be able to make it work — if you buy the place for about $100k. Anyone who pays more than that is nuts.
    By the way EBGuy, the tax rules have changed. You can’t live in a place for just 2 years anymore and take the entire $500k (married) tax break. You still have to live in it at least two years but the deduction gets pro-rated over five years, so if you only live in it two years you get 2/5 ($200,000) of the max. deduction.

  6. Posted by San FronziScheme

    Another back of the envelope calculation:
    2.5% X 349K = $8725 = Not enough to worry about mundane little details like:
    – Discolored picture that looks like my Italian vacation in 1985.
    – Only one picture! Digital pics are free. I get it! I forgot they’re using 1985 Fujicolor film.
    – Having some faith in the product: “Will be on lockbox after Tuesday tour”. One tour! Marketing a house with a lockbox is like saying: Not wasting my time on this.
    These bubble years have been too good to salesmen. Time to go back to basics like “client is king” or “always give your best”. $8725 is still money.

  7. Posted by The Dude

    Are the sellers The Smurfs?

  8. Posted by stucco-sux

    It looks like a perfect world headquarters for stuccosux, inc.

  9. Posted by tipster

    “$8725 is still money.”
    SFS, you need to go back and recalculate 2.5% of 0. It isn’t going to sell for anywhere near that price.
    The agent has already provided far more service than the owner is willing to pay in compensation.

  10. Posted by FFS

    OMG. I believe this “house” was my first dropped jaw inducing Real Estate Times ad from way back when. Back then it seemed mostly a shack-over-garage and the ad almost made it seem like the real bargain was guaranteed, protected parking for a mere $333,000.

  11. Posted by Legacy Dude

    Per the Shark, last sale was for $265K in June of 2001. Will be interesting to see what this goes for.

  12. Posted by San FronziScheme

    Sure, tipster. But that’s the original goal and what the salesperson should shoot for. Even if it sells at 250K the commission still represents around a month salary to a median SF family. And I don’t think it takes more than one month in man-hours to close this deal. At least spend 2 hours taking pictures and post them on the MLS. Square footage would be nice too.
    PropertyShark shows square footage as a whopping 240sf which is certainly wrong. Satellite pics roofsize guesstimate is around 15ft X 40ft or roughly 450-500sf each floor inside. If the garage takes 1/2 the ground floor, that’s potentially ~650-700sf. A single person can live there, but 500/sf is very steep.
    The main value is sweat equity and it’s not the best neighborhood for that.

  13. Posted by EBGuy

    if you buy the place for about $100k. Anyone who pays more than that is nuts.
    Have to make sure everyone is awake. Fully developing out RH-2 lots will probably make sense first in Real SF areas, and then in outer lying areas (if the Great Urbanization does continue to take place). In the context of say, 815 Alvarado, I imagine I would rather have two decent sized condos now instead of the SFH+Inlaw that they are trying unload in the not-quite $3million range (I’d be interested in what others think? I mean, at a certain point, the condo’s will hit FHA-support range.)
    And I would not pay ‘retail’ in the Excelsior (Trip’s estimate of $100k seems about right for this place); the current foreclosure pipeline shows 111 foreclosures (NODs, NOTS, bank owned) to 35 homes currently for sale. Plenty of pent up supply to drive down prices.
    Trip, I’m going to slightly disagree with you. If you develop and then immediately occupy one unit for two years as your primary residence you will be able to claim The (full) Exemption. However, if you rent it out first, and then occupy it later in life, you will have to prorate The Exemption (loosely, years owner occupied divided by the ENTIRE time you have owned the place). This was a major change in the tax code as part of The Housing and Economic Recovery Act of 2008 (which affects vacation homes and rentals). Definitely NTA.

  14. Posted by Trip

    EBGuy, I will certainly defer to you on the details of the tax code — not my area and it sure looks like you know more about it than I.
    I agree with you that developing 2-3 unit places can be the way to go in SF and is a great way to get rid of dilapidated housing stock and increase the number of housing units with something other than SOMA condo towers. Tax incentives may make it even more attractive. As you noted, my point was just that this doesn’t seem to make financial sense in places like the Excelsior where decent homes are not much more than what is effectively an empty lot (with more red-tape attached).

  15. Posted by curmudgeon

    SanFronzi,
    you look to be correct about the 15X40, but it is unlikely there is any space down. The hill rises to the rear of the lot (note the steps on the right side). I doubt that there is any living space on the garage level. I’d say 500sq ft total.

  16. Posted by San FronziScheme

    That’s 700/sf or more or less the price of prime SF to buy in the Excelsior…

  17. Posted by whatever

    I know why the agent did not list sq ft!
    According to a title company database, it’s 240 sq ft. Maybe that’s wrong.(?)

  18. Posted by San FronziScheme

    “whatever”, I saw that too, which is why I did a rough estimate through this satellite pic.

  19. Posted by EBGuy

    And while we’re in the Excelsior, on the block this afternoon: 225 Vienna, bought for $1.069million in Jan. 2007 (peak?!), with an unpaid balance of $900,428. Claims to be 4bed/3bath at 2,954 sq.ft., so its a veritable bargain at $300 psf. (sorry, RH-1, no subdividing).

  20. Posted by Mole Man

    Most likely the lock box remark is for other agents so they know they can show the place themselves without having to drag the listing agent over there just to open the door. Together being listed on MLS and the lock box indicate the sellers are getting serious. The listed price is obviously a problem, but that shouldn’t stop anyone from submitting a low ball offer.

  21. Posted by San FronziScheme

    Bargain at only 15% under peak in the Excelsior?
    Nah, I’ll pass.

  22. Posted by Jimmy (No Longer Bitter)

    Is this property just a room over a garage on a tiny lot? Am I missing something?

  23. Posted by The Milkshake of Despair

    two rooms Jimmy – unlike a prison cell, the bathroom is separate.
    Its kind of amazing to look at places like this and compare with what you’d get elsewhere in the USA for the same $.
    Forward this one to family and friends back east for a good chuckle.

  24. Posted by EH

    Well of course this goes for $12K in Racine.

  25. Posted by tipster

    No, in Racine, it’s the kids playhouse for the real house on the left. 🙂

  26. Posted by Shza

    Yes, and Milkshake, be sure to mention in the cover email that this is in one of the least-desirable, barely-within-the-borders, inconvenient, “lower-class” neighborhoods in town.

  27. Posted by BernalDweller

    LOL at the Racine jokes. Maybe $15K if it’s north of High St. and east of Erie.

  28. Posted by Marakima

    I actually went to the open house this past Sunday… the place was pretty dumpy, and doesn’t seem to offer a very private environment.

  29. Posted by Jimmy (No Longer Bitter)

    This place sounds awful and the tiny scrap of land it sits on is borderline useless. I thought we were supposed to be reviewing real estate porn and mocking underwater home “owners.” I’d say threads like this are a turn for the worse.

  30. Posted by San FronziScheme

    tiny scrap of land?
    25X100 from satellite photos. That’s pretty standard for SF. The house’s tiny but the backyard extends pretty far from what I can see on street view and sat pics.
    That’s the only value in this house: the plot it sits on and the fact that you can build 2 units.

  31. Posted by EBGuy

    I know that over on this side of the Bay we can build up to 35 ft. (average) height and have 40% lot coverage. How high can we jack this sucker up?
    Hey Jimmy, how does this fair with the LBI?

  32. Posted by Jimmy (No Longer Bitter)

    Well I’d say, based on my in depth LBI analysis, that this has a 1:1 ratio of bathrooms to bedrooms. So it passes that test; it’ll sell to an overeager new builder with starry-eyed visions of converting it to a triple decker with a 3 car garage underneath and selling them to new families looking to get a toehold on the property ladder “because prices are so low now.”
    That or it will be convereted to a warren of dozens of 6’x10′ illegal-immigrant housing units each renting for $250 a month, all sharing a single bathroom with no hot water.

  33. Posted by Trip

    Hey, down to $275,000 now. So now about at the June 2001 sale price.

  34. Posted by Starry Eyes

    Wow! Dumpy is right! I’ve seen Tenderloin “efficiencies” with more space. No hand sink in the bathroom, shower tiny and cruddy. Garage looks maybe enough for 2 cars end-to-end and no internal stair.

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