What to do with an SFH in SF near the Financial District?


#1

I’d love to poll the great minds there to see what I should do with this property.
Lately I was able to pick up a SFH with 1 car garage for about 800 / sq ft. It is in an RM3 zoned district — one of very few SFH left in this area.

The new Subway line from 4th/king and Moscone will be running right by it (a few blocks away) in two years in 2019 so transportation in the future will be excellent.

There’s 4 bed / 3 ba and a huge office space down below (no in-law). The drawbacks are that it is in dated (but usable) condition and there’s not enough natural light in some of the room because everything else around it are taller 4-plexes and 12-plexes and stuff like that. Also because the neighbors around it are in 4-plexes and 12-plexes, these are often not the “young DINK 30-something year olds that work in tech/finance” that I go for as renters.

What would you all do with this property? My thoughts are -

a) redo bathrooms, add lots of high quality LED track lighting, repaint outside to modern fashionable colors, and add outdoor sconce lighting. Attract higher income folks for rental.

b) collect rent for 5 years

c) Then see what happens? Do I remodel the whole thing, get a ton more light into it as a SFH, and then flip once the subway has been open for a few years?

d) Or do I explore going even more crazy and building 3 condos on the site and then sell??

Your thoughts are appreciated.


#2

Definitely (d). If the City is so hard up for housing, and since your place is near public transportation and close to FD and Downtown I would explore building up, way up, by deploying the bonus program that was passed. Don’t quote me, but you can in theory go up to 2 extra floors or an extra 20 ft higher than zoned if you provide a certain % of affordable housing. Affordable housing, by definition, is actually not bad when you look at what the income levels are. So, if you have to, you make the lower or undesirable units the affordable ones. A once, single floor medical office building on Pacific Ave near my family building in lower Nob Hill was demolished and is already framed up and on its way. It appears to be 3-4 floors of condos with parking. I suspect these will fly off the shelf like discounted Iphone 8s…


#3

Thanks sfdragonboy — appreciate the view. That’s good food for though.
I don’t think properties east of Van Ness and north of Post are eligible if there’s already a structure on the lot ---- http://default.sfplanning.org/forms/Home-SF_InfoPacket_100417.pdf

But your story about the building on Pacific is intriguing — is that the one next to the firehouse?


#4

No, this is about 1.5 blocks up Pacific Ave. from that firehouse (which is on Powell between Broadway and Pacific) essentially. Right above Mason Street and Pacific Ave on the right side. Framing is up right now if you go by there.

Well, you do have a single family home only in existence right on that lot? I would think the City would have a hard time saying no to you for net adding way more housing and doing so with providing enough affordable units to boot.

You did really good. My neighbor, the realtor, told me he was looking around Chinatown for something to buy and couldn’t find anything.

So, how did you manage to pull this sweet deal off???


#5

Cha-ching, @aalj!!!


#6

You did really good. My neighbor, the realtor, told me he was looking around Chinatown for something to buy and couldn’t find anything.

So, how did you manage to pull this sweet deal off???

Thanks SFDboy — I was able to pull the deal off with blind luck and persistence — I had been searching in Nob Hill where it ever so slightly starts to hit Chinatown and I found it on the MLS one morning and closed 9 days later.

I’m not sure I know how to attach photos to this post but I checked out the framing on that condo building on Pacific just west of Mason — that’s a beautiful framing job replete with plenty of structural steel. That’s gonna go for many pretty pennies!


#7

Wow, impressive…

Well, welcome to the forum! Keep us posted on what you eventually do with your lil find…


#8

I too would go for Option D. But make sure it’s condo with separate APN’s, NOT multi-family.


#9

Going back to this, the single story restaurant and SFH next to the fire station are obviously there yet the developer has plans to raze both structures and combine into one nice multi story building with underground parking and ground floor commercial spaces. We received the disclosure letter a long time ago, so not sure what the holdup is.


#10

Thanks. If someone takes an SFH and makes two condos out of this — then are you considered the original subdivider and therefore subject to rent control (unless you sell to a new party)?

Why I ask ---- I know if you’ve got a duplex, and then TIC it, and then condo convert, then those are indeed subject to rent control until they get sold to someone who isn’t the subdivider.


#11

Condo development could take many years. You can rent to Santa Rosa fire victims for 2 years and tell them no renewal after 2 years. SF has a relief for landlord on this Good Samaritan landlording.

At the same time, explore the possibilities with the planning. Hopefully it’s ready for build when the fire victim tenants move out


#12

The first one is a good question and I would love to know what the answer is. Now, on the second scenario with the duplex, wouldn’t it technically depend on when the duplex was built? I thought buildings after 1978 or 79 are not subject to rent control.


#13

Thank you! Anything I do has at least a 5 year horizon. I need the first 2 years to wait out the opening of the subway station on Washington. Once that station opens and connects Ctown and Nob Hill to Union Square / Moscone Center / 4th&King, then the pace of change in the neighborhood will accelerate. So my short term strategy is (a) and (b) as per the first post, which is to do some light work with bathrooms/finishes and receive income for a couple of years — perhaps 5 years ---- until I figure out what to do with the place longer term (like perhaps condos).


#14

Yes you are right, although in my (limited) experience, it is nearly impossible to find duplex/triplex/n-plex in the neighborhoods I shoot for (specifically nob hill and russian hill) that were built post-1979.


#15

Anyone know whats going on with that big development going on w the builing at Sproule and Clay? They’ve been at it for months … a bigger job than the already impressive framing in the building on Pacific just 1/4 block up from Mason. A whole passel of condos perhaps?


#16

I had to google the address to see where you were referencing to. Yes, that used to be a private open air parking lot. I will have to drive by next time and see if there is a sign up of the architect or contractor. Most likely, condos. The only thing remotely bad about that street is that the 1 California bus (cable operated) runs inland on Clay.