Comments on: Readers Ask: Readers Know (Usually)

By: deliadelia

deliadelia — Sat, 03 Oct 2009 18:46:00 +0000

Thank you, everyone

By: Financial Samurai

Financial Samurai — Sat, 03 Oct 2009 15:48:52 +0000

I’ve own a prime rental in Pacific Heights for the past 7 years, and I’ve never had a problem with tenants. Maybe it’s b/c it attracts a responsible, well-heeled crowd.

For the 2 units, just have an open conversation with them. ANYTHING is possible, if both sides understand each side.

By: sometech

sometech — Fri, 02 Oct 2009 23:35:37 +0000

I’m going to post this again in the correct place….

The best thing you could do with a 2 unit building is try to find someone to buy the other unit because you can condo convert without going through the lottery. Think 1 year if you are really motivated and on top of the process.

As for rentals, San Francisco is challenging but not impossible. And compared to the rest of the country, there is still significant demand.

By: deliadelia

deliadelia — Fri, 02 Oct 2009 17:09:59 +0000

Oh and yes, I need the broker referral, but am afraid to post my email here in case too many um ..referrals come my way.

By: deliadelia

deliadelia — Fri, 02 Oct 2009 17:08:30 +0000

Thanks so much, everyone. This is really helpful

By: insidesfre

insidesfre — Fri, 02 Oct 2009 14:26:06 +0000

I’ve been a landlord for 12 years in SF. My partner & I purchased our two-unit building in Noe Valley in 1998. We’ve lived upstairs & have successfully rented our lower unit since then, always at market rates. We were able to purchase our building because the rental income made it affordable. Financially speaking, it’s a lot more challenging to do this today, because you’ll probably need at least 30% down in order to make the numbers work at all. Selecting tenants is a matter of good judgement, due diligence, and luck. We have never had any major issues and have always had really nice tenants.

I’m sure you’ll get a variety of answers, some negative & some positive. But I have never regretted our decision, and it’s allowed us to live in a neighborhood we might otherwise not have been able to afford.

By: tenancy

tenancy — Fri, 02 Oct 2009 07:27:02 +0000

Hi, I actually did what you are considering, and it worked out OK – so far.
the main problem is that we had to do an owner move in eviction – you then have to stay there for 3 years, or offer back to old tenants at old rent if you do not -but it doesnt sound like you have that problem.
we leveraged with 1/3rd downpayment, and the rent covers around a 1/3rd of costs, so we pick up the final third.
I guess now, after refinancing, we could rent both units out and probably break even (won;t cover principal payments, but definitely interest and prop tax).
The key is the mortgage rate – when we refied back in Jan there was a new limit for 2 units for 800k or so, which we just crept under. with the fact its owner occupied, and some points, we managed to get a rate of 4.875% 30yr fixed- but if the loan is over 800k it’s jumbo I think which would be much higher (not sure on current rates).
hope that helps, I can recommend a mortgage broker who we used for our purchase and refi and liked, if you get further along…