Ask Us: Should I Buy A Single Family Or 2-3 Unit?

Where readers ask and we (the community) try to answer:

Hello,

I have been following your blog with great interest. I have a comment/question and wasn’t sure of the best place to put it.

I was curious to know what you thought of something. Due to family circumstances, I would love to buy something in San Francisco, but something more along the lines of a 2 or 3 unit building. So, I am not just an investor coming looking to do a condo conversion in a year and then sell off again at a higher price. I plan on staying in there for a while, at least a few years and then depending on where I am at that point, renting it out to hopefully have it pay for itself.

It seems that sellers have the philosophy right now that they might not want to sell unless they get the price that they want (and the price they want is the price they would have gotten 6 months ago if they could). So, instead maybe some people are opting to hold on to their houses and rent it out until the market gets better and they could get a better price than right now? Do you see that happening?

If so, then it would seem to apply more to single family homes, no? Because rent-control laws don’t apply to them? But how about 2-4 unit buildings? It doesn’t seem right to apply this same logic to them, because both rent and eviction control laws apply to them, so either they sell at a lower price now (vacant but negotiated price), or a lower price later (because they might have tenants or even protected tenants).

I would be interested to know your thoughts! Anyways it will be interesting to see how it all plays out!

Cheers,
L

So many questions, such little space to answer. Check the comments below for answers from our insanely intelligent readers. Check your inbox for my reply directly to you, and check back here, because you touched on so many issues, we’re certain to keep coming back with more replies.

As always, thanks for reading and hanging out on theFrontSteps, and thanks for your question.

Road to Real Estate Recovery

When I was working at C__________, my boss was a big coke-head. As a result, the atmosphere was, to understate, lax. Everyone drank and ate copiously (never paying for it), sat down and/or danced randomly in the middle of the restaurant, swore, and slept with one another. All of the aforementioned took place during open-for-business hours. None of us were very surprised when an accountant appeared to “audit the situation” since the owners were confounded, and not at all pleased, that such a busy place could simply not turn a profit. The list of solutions thus generated included: uniforms, Michael Bolton CDs, crafting our famed sangria with boxed (as opposed to bottled) wine, and a NO DRINKING ON THE JOB POLICY.” Nowhere was it suggested that coke-head boss might… cut back, abstain, cease, or desist. And so ended my tenure at C_______.

The relevant thread here is that ailing businesses oft must look within to cure what ails. In the case of real estate, a national convalescent, such introspection cannot come too soon. Perhaps this is why Inman is sponsoring a “Roadmap to Recovery” program, part of which includes an essay contest, with prizes such as $500 and a free pass to the upcoming Real Estate Connect conference.

One recent essay asks how Realtors can redefine “full service.” The author, Jack Harper, has a thesis that what’s missing in real estate is transparency: a term he defines as the client having full understanding of what the agent does for his/her commission. He laments not only a lack of clear communication regarding those services, but also a lack of agreement by the industry as a whole as to what those services entail.

Commenters have opinions aplenty on this essay. Most turn out to be thinly veiled ads for the agents commenting, masturbatory “I am so good at this and that as well as that and this; and by the way, here is my contact information and website!” type stuff. But most of the ideas echo Harper’s.

As a potential client to any realtor, I would like to add that “transparency” also implies a level of honesty and freeness with information your industry is not famed for. We need to trust you again. Bringing that trust back to real estate could be one very important step on the road to recovery.

Photo credit: Active Rain.com

Google Founder(s) Vacationing In Mexico While Stock Falls?

We’ve been told, and we acknowledge this has absolutely nothing to do with San Francisco real estate (unless the Google founders took the Google bus to get to port), that one, if not both, Google founders are enjoying the fruits of their labor and declining company value with a nice cruise on their gigantic “dark sailboat yacht with three giant masts” down near Manzanillo, Mexico.

True or rumor? Anybody know? Admittedly, not as bad as the CEO’s of Ford, GM, and Chrysler flying to D.C. in their private jets asking for $25B, but interesting nonetheless.

We’re thinking “the dark blue yacht with three giant masts” is the Maltese Falcon (pictured above) on its way down to Panama. In which case, maybe Sergey Brin and Larry Page are just along for the ride, unless they threw down the $181,688,916 recently being asked for it, and added the yacht to their roster of extravagant things.

Either way, Sergey and Larry, you might want to go easy on the Lobster, and heavy on the beans and rice, things ain’t lookin’ so good up here north of the border.

Don’t suppose Jerry Yang is scrubbing the decks do you?

[Image Source: YachtPals.com]

Letter To Editor: “Defamation, Slander, Law Suit” Fun!

Life at theFrontSteps is nothing but sunshine and roses. Ummm, maybe not. Today, we give you the most recent friendly email to come our way, with a few things [removed] to protect privacy:

[Editor], It is unfortunate that I have to write you this email. A client of mine [removed] sent me this link to one of your blogs. Please know that if you continue to [post certain things] on-line, I will file a defamation of character and slander law suit in 5 minutes. You did not mention me by name, but have already affected my reputation [removed] with this blog. This is the most desperate and pathetic attempt I have ever seen by an agent to procure business. I could sue you right now based on the sales and records I have made [in the past]. Your implications are quite damaging and it will not be tolerated. Please remove these insulting and malicious comments off this site immediately or [your company] and you will hear from my attorneys before you can write another irresponsible, unresearched, innaccuate and unethical statement. By the way, you are using my photos for commercial use. Please cease and desist from this.

Sincerely,
[One upset agent]

And you thought this blogging stuff is easy, and always fun….

East Bay: Your Own Vineyard in Oakland (Yes Oakland)

By Home Girl

If you have ever flirted with the idea of having your own vineyard and harvesting a few decent cases of mellow wine every year, but a move to rural Napa or Sonoma seems too much of a leap, then have a look at this 4/3.4 updated ranch home at 5651 Colbourn Place on the Hillcrest Estate in the Oakland hills.

For its 1.5 acres do indeed include 250 Wente-Clone chardonnay vines, as well a concealed wine cellar, gardening beds, livestock pens, a chicken coop and fruit trees. This might not be the bucolic idyll, but it’s close: the nearest coffee shop is 2 miles away, there are stables down the road and the property is zoned for a horse.

The house itself won’t have you drooling — it’s a little bland and the living area is disproportionately small. But the master suite addition on an upper floor is a bonus, and given a mid-century makeover by someone with a sense of style, something could be done.

The setting’s the thing, though. Think glorious views, big skies and a sundowner cocktail on the deck before you wring one of your fowl’s necks and sling it on the BBQ.

Price: $1,398,000
Per sq ft: $519
Walk Score: 11/100
Related: House is on a cul-de-sac with neighbors; most Hillcrest Estate homes have a minimum 1-acre lot. Read this Times piece about “the pastoral beauty” of Oakland.
In brief: Is Oakland the new wine country?

Wild Idea: Signs that Say Something Useful

After an owner move-in eviction found my ass on the street a few years back, I resolved never to rent again. At the time things were slowing down, but they weren’t nearing full stop as they are now; so yes, interest only loans were still quite the popular option for teachers and similarly paid neophyte buyers with delusions of grander domiciles.
 
My agent, whose name I never speak unless I’m drunk, and even then, won’t say more than twice in row for fear that she, like Beetlejuice, will materialize on the third iteration, was evil. She would constantly take me to $650-$750K condos that I fell in love with, whispering in my ear sweet lies about how an ARM would make them more affordable than rent. When I later viewed properties in the $400K range, I hated them- yet they would have been perfectly acceptable if not viewed through the “but for just a few hundred more per month, you could have something so much nicer” lense. She was, for this and other reasons, the embodiment of why people ask “Why are Realtors such assholes.” (And they do ask that, and others answer: You can see for yourself on this Frontsteps blog post.)
 
But now I’m jaded. Still renting, but ever so much more informed, and well aware that I have no business in a $700K home. This is why I ask, nay beg, Realtors to be better at advertising on open house days. Say I’ve come to look at something in particular: Invariably, I will see 100 signs for other places also open that day, all in the same ‘hood, easily visited. In fact, so ubiquitous are these signs, we may soon see a law against them crowding the sidewalk, as reported on Schtuff. But though plentiful, these advertisements aren’t very useful.
 
First off, the entire sandwich board is generally taken up by the brokerage logo, and the address of the home for sale. Some also include the hours of the open house, and very occasionally, more info, like CONDO or SFH. See, now I know to try the former, but avoid the latter, since I recognize my income limitations. Helpful.
 
Better still though would be full disclosure: type of property, number of rooms, square footage, and yes: price. I’m not the only buyer to appreciate this idea either. I got the photo above from a blog by Tracey Taylor, on a similar theme. I realize, Realtor that I’m not, there is some reason for this evasion of detail. But buyer that I am, I tell you, I need it un-evaded. For properly informed, I would come to your open house if I knew I belonged there. I would not come if I did not.
 
…How much time could we all save? 

Ask Us: How To Clean Up A Meth Lab After A Sale

Where readers ask and we (the community) try to answer:

Truth be told, this email was sent within the confines of one particular local real estate brokerage. We’ve already seen the answers provided by colleagues in the biz, but damnit if we aren’t curious to see what kind of snarky remarks our readers can come up with.

My clients are interested in an REO where there was a ‘drug lab’. This property is very clean ‘looking’ and one would never know there was such an operation there. The buyer will be responsible for clean up within 90 days of the close since this is an REO, as-is sale. There are no clear signs of where the lab was, and so far, our inquiries with the police department have been poorly addressed. We plan on investigating the cost during our inspection period. Can any of you give me an idea of how best to pursue and who to use as an inspector for such an opportunity?

Funny that this email came literally the same day SF Gate reported “Feds join S.F. house blast probe; signs point toward accidental cause”. Is it an accident if you forget to mix the crystal with the meth? Just sayin’….

Symphony Towers Price Slashing Success

From the press release and maybe a little proof (if you want to call it that) of the “it’s a great time to buy” mantra:

For Symphony Towers, high-rise condos in the heart of San Francisco at 750 Van Ness Avenue, smashing prices equaled a smashing success as their Turk Tower closeout sale netted a whopping 18 contracts [out of 20 available. Nearly 1000 inquiries (Web site or at sales center) in the 3 weeks of the promotion.]

During the sales event the weekend of Nov.14-16 and Symphony Towers dropped prices more than $100,000 on studios and one-bedrooms — and the public responded. Hundreds of condo shoppers visited the sales center a few weeks prior to, and including, the closeout weekend, attracted in part by the “market correction” that potential buyers have been waiting patiently for, and perhaps, even expecting.

“The success of this promotion proves there are buyers out there; many just looking for an extra reason to jump off the fence and purchase a new home,” said Kim Cole, vice president of sales for Pacific Marketing Associates, the local firm in charge of sales and marketing for Symphony Towers. “This developer cut to the chase and offered firm reductions that simply couldn’t be ignored.

“Couple that with some post-election optimism and a great product in the heart of the City, it’s no wonder these homes were so quickly snapped up,” she added.

With the promotion, studio homes at Symphony Towers started at $295,000 — virtually unheard of for new construction in San Francisco, and likely the most significant price reduction yet by any development in the City. Comparable options that inexpensive were previously only found in the East Bay. Moreover, since Symphony Towers was already about 70 percent sold and occupied, buyers discovered that loans were easier to get.

Only two homes remain in the Symphony Towers’ nine-story Turk tower, with about 30 remaining in the taller Van Ness tower.

Don’t ask for details, because we don’t know them. Just getting info to you with GodSpeed (means don’t shoot the messenger). And no, so far nobody has come forward for their 50% rebate.