As we outlined last week:

Purchased as a 2,000-square-foot property, “in need upgrading,” for $1.31 million in May of 2018, the single-family home at 1160 Florida Street has since been redesigned by Martinkovic Milford Architects, completely renovated (“no stone has been left unturned”) and expanded to 2,800 square feet of habitable space, featuring a “modern aesthetic and designer finishes,” with “an abundance of natural light,” a “dazzling” open floor plan, four bedrooms and four baths.

Priced at $3.995 million last October and then reduced to $3.495 million after two weeks, the Mission District home was listed anew for $3.095 million early last month, with an official “1” day on the market.

And the list price for 1160 Florida Street has now been further reduced to $2.95 million, down a million (26 percent) since the home was priced last year but a sale at which would be considered to be “at asking” according to all industry stats and aggregate reports.

The sale of 1160 Florida Street has now closed escrow with a contract price of $2,837,650 or roughly $1,030 per square foot. And while that’s officially “within 4 percent of asking” according to industry stats, and with only “40 days on the market” as well, it’s roughly 29 percent ($1.16 million) below its original price when listed five months ago.

Keep in mind that the number of homes on the market in San Francisco hit a 9-year high earlier this week and the percentage of listings with at least one official price reduction had ticked up to 17 percent, all prior to the COVID-19 lock-down.

Comments from Plugged-In Readers

  1. Posted by Anna

    I’d say they’re lucky they sold it at all during these crazy times! Even at $1M less! I have a feeling the real estate market is about to drop out from under us as the economy tanks. Blessing or curse?

  2. Posted by Philip

    I’ll say! Between renovation costs (cheap work, but it certainly must have cost $500K), financing costs, commissions and various odds & ends, they are lucky they came out alive. I’m guessing it’s close to a wash.

    • Posted by Sri

      Not so good at math, eh?

      Buyer puts in probably $400,000 to buy (the rest was debt financed) and $500,000 to repair as you said.

      Sells for $2.837mn minus the costs (commissions like you said, financing costs like you said)
      – 6% closing in total (5% to agents, plus 1% rest) = $170k
      – Pay back the loan = $917k
      – Interest on said loan even at 10% a year for 14 months = $110k (rounding up)

      Net to the owner = $1.642 mn after sale, and he/she put in $900k

      “Guessing it’s close to a wash” – more like an amazing payday for the owner. Hell, if you can turn $900k into $1.6 million for me in 18 months, you killed it. Congrats to him/her on a home run! And the buyer paid $700 a square foot (adding in the sq ft of the nice backyard and roof deck). Win win for everyone. I have no skin in the game but man I wish I did on this big payday.

  3. Posted by greg mccord

    Obviously you haven’t remodeled anything in san francisco lately. it did not cost 500k. In addition more than 50% of the properties in sf are bought with all cash, its the only way to really compete especially for a desirable “fixer” so I bet there was no loan involved. I have a strong feeling this was a wash for the seller, but considering the blood sweat and tears that goes into one of these remodels the seller is considering it a loss. Flipping houses is not for the faint at heart.

    • Posted by Sri

      Greg – first off, “all cash” offers are often debt financed (not from a traditional bank). The offer shows no loan contingency (aka “all cash”) but a trusted lender is there or cuts the check right after close. That’s how flippers leverage their returns. So that part of the math absolutely holds. Second, the entire point was that this is not a high end remodel. Look at the before and after pictures. This was a pretty simple one. You can’t have it both ways – say that it was not high quality, but project costs are worthy of high quality. It was conservative remodel and yeah, I have done remodels in SF for single family homes and looking at the pictures, I can easily see it being $500k. But let’s make it 40% higher (unlikely) and make it $700k (very unlikely given the pictures) – seller STILL MADE $500,000 profit for 18 months of work. Not bad outcome for selling a house in the middle of a global pandemic!

  4. Posted by Sfnative

    I’m not sure if buying a 3 million box with the sfmta to tow truck services on speed dial will exactly enjoy the fruits of their labor in this neighborhood. Good on ya if you do.

    All the flipper has to do with the profits is to buy another place to flip and wash wash wash in that area.

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