Purchased for $395,000 in June 2000 but then refinanced in March 2005 with a $601,000 variable rate loan, 683 San Jose Avenue on the border between the Mission and Noe Valley was taken back by the bank in August 2009 with $635,375 owed.
Back on the market for $599,900 ($439 per square foot) and pushing those tax credits which are set to expire April 30. But we’ll also note it’s “possession subject to tenant rights” for the single-family home.
∙ Listing: 683 San Jose Avenue (2/1) – $599,900 [MLS] [Map]
∙ San Francisco Real Estate Districts: Maps And Neighborhoods [SocketSite]
∙ Senate Approves First-Time (And Move-Up) Homebuyer Tax Credits [SocketSite]
That’s $600k to own a place on a very busy street that, per the mls listing, rents for $1k/month.
That must be for an in-law.
I agree with “J”, that must be for some secondary unit, there is no way that an SFH in that part of The City would rent for $1,000 per month. That’s a “too good to be true” rate for the tenant, and if it’s for the whole place, “possession subject to tenant rights” is an entirely apropos caveat. If I were the tenant under those terms, the bank or new owner would have to drag me out kicking and screaming. 🙂
Maybe this is a new bank-stabbing technique? Instead of stealing the appliances, furnace, and light fixtures you sign a long-term lease for 1/3 market rate with a friend on your way out the door. What would be the legal ramifications?
I wonder how much capital this one requies. I don’t know if I’ve ever seen a property that color that wasn’t a big time fixer. A sort of mint green or else the weird Peptol Bismol pink, either way it’s a dead giveway.
I’d say it’s entirely likely that $1000 is being paid for the entire house. The tenants have probably been in there for years and getting them out will be a huge headache. And if tenants have been in there long enough to only be paying $1000 per month in rent, the place probably hasn’t had any work done on it in years either.
So really, you’re looking at a (close to) gut renovation, Ellis act situation on a busy street. Note that 1057 Valencia sold for $700k after sitting on the market for more than a month with a similar tenant situation in a way better location. I’d say $600k seems expensive, but I guess you’d have to see an estoppel to know what you’re really dealing with.
i guess one of those google $ people will step up to the gut remodel since the house is in effect on a freeway onramp to destinations south
There’s no recourse for an OMI on an SFR. Ellis probably isn’t necessary.
Looks like they tried to do some work in 2005-2007:
RAISE EXISTING ROOF @ REAR TO ENLARGE 2 BEDROOMS IN ATTIC; ADD DORMERS @ FRONT ATTIC BEDRM. NEW FAMILY ROOM 1ST FL. ADD 2 BATHROOM, 1 HALF BTHROOM, RENOVATE 1 BATHRM. REPLACE EXISTING INTERIOR STAIR. REPLACE EXTERIOR REAR STAIR W/FIRE ESCAPE & METAL LANOING & STAIR.
Not clear that this ever got signed off since they needed some other permit to fix the sidewalk.
I saw 1057 Valencia and this only looked like a better deal than this. Better area and the place looked much bigger. Big yard but no parking though which is a pain on that stretch of Valencia. At 700K I am still scratching my head on how this would pencil out. Total regut + Huge foundation/garage work? Would it cost as much to redo as the purchase price? More? It didn’t seem worth it to me.
To add to annon’s observation, there is also a 10% cap on rental increases after the original term of a lease is up on a SFR with 60 days notice, so starting with a very low rent years ago doesn’t necessarily mean a very low rent today since increases are capped at a much higher level. SFR’s aren’t subject to the same renter’s protections as multi-unit buildings.
1057 definitely needs a ton of work – new foundation, new roof, plus there was extensive water damage inside. But the house had good bones and you could expand it back into the yard. There is also a limited supply of single family homes in that neighborhood and people who want to buy in the area are willing to spend a lot more than $1.4M for a single family home…
@ anonn, love the comment on the paint color, you’re spot on.
But a question, for all – what about an OMI when the tenant is “protected” (elderly, disabled, under 18, as I understand)? Isn’t that more complex? What might the other potential pitfalls be of buying a tenant-occupied SFR, apart from the already mentioned deferred maintenance?
Down the street, 625 San Jose Ave (1422 sq.ft.) appears to be in trouble; a NOTS was filed on December 9. That place was originally bought for $285k in 1995. The last noted refi amount was for $681.5k in 2005, but there have been more recent ones…
Protected status doesn’t offer protection for OMIs on SFRs.
The key to the tenant situation is if it’s truly a SFH, I.e. No inlaw. Rentboard (those schmucks) consider a SFH witn sn inlaw ad a 2 unit bldg and hence under rent control. If that’s the Case here, you ate screwed wrt evictions. But If it’s only 1 residence, than there is no RC restrictions wrt rent cost. You can’t just evict the tenant but you can just raise the rent to a level you know they will not accept. And, I have not herd of any 10% rent increase on SFH. Best of my knowledge there is no cap. But tenant may go to rent board and claim a co structivw eviction if rent raise is exhorbinate. Should be an interesting Case.
^ typing sucked, sorry. Me tired, iPod touch too tiny. Me want iPad!
I love the exterior picture. It had to be taken on a Sunday morning because, as mentioned before, this part of San Jose Ave. is a freeway on ramp/off ramp. Just pulling your car out of the garage without getting hit is a major undertaking. Well, at least you can walk across the street to Mitchell’s Ice Cream Parlor.
“SFR’s aren’t subject to the same renter’s protections as multi-unit buildings.”
Careful, kids, it was my understanding that SFRs DO HAVE RENT CONTROL if the tenants were there before costa hawkins act of 1995. You could NOT raise the rent to market rate to get them out. You’d have to do an OMI. I’ve never looked into this very carefully, but it was always my understanding. The law was written as a phase out of rent control for SFRs by allowing the owner to set the initial rental rate and all subsequent rates after that. If the initial rental rate had already been set, rent control laws would apply.
Again, I’ve never looked into this very carefully, but it has been my understanding.
The sale of 683 San Jose Avenue closed escrow on 4/6 with a reported contract price of $550,000 ($403 per square foot).
I bought this house and just an FYI to anyone else going through this situation or speculating on what might have happened:
-Single family homes do no require an OMI. I consulted a real estate attorney prior to purchase who advised me that I could raise the rent to market rates upon purchase
-The tenant had only been there for a couple of years and was not protected
-Once I raised the rent, the renter had done his homework and defaulted on payment, daring me to start the eviction process. We instead settled for a payment (less than my cost would have been to evict plus opportunity cost of rent) to get him to move out immediately
Correct that the house was a major fixer – kitchen and bath needed to go down to the studs. Painting away that awful green was the easiest part. But, the house was built in 1900 with pure redwood and had great bones. With some resourcefulness, total remodel for less than $150k. That is less than $700k for a fully remodeled SFH in SF – pretty good deal if you ask me and mortgage is far below what rent would be. San Jose Ave is quite busy, but you can’t even hear it inside the house and this is a great neighborhood with the best transportation, fantastic restaurants, and access to the best of the Mission, Noe Valley, and Bernal Heights.
Sounds like a great outcome — congrats!