Friday, December 7, 2007

Noe Valley 3 unit: Fast Track or not?

This very nicely done Noe Valley 3 unit property consists of a traditional 2-flat building front with a large detached 2-story cottage in the rear. The owner/investor purchased the property in January 2007 for $1.35M and completed a $300k remodel via contractor before putting it on the market on November 9 for sale as 3 TIC units, or as a whole building.

The nicely remodeled flats (minus the popcorn finish walls and sliding-mirrored bedroom closets) are vacant with floor plan changes and 3 beds/2 baths each, while the rear cottage is tenant-occupied by a very protected tenant. The garage is a piece of art (if you appreciate that sort of thing) with steel beam upgrades and room for 4-5 cars.

The caveat to this deal is the tenant's status in the cottage - the 85 year old woman appears to be the only tenant and is no doubt a protected tenant, but her daughter claims to be living there and protected as well, which raises some questions, as records show she is married to a contractor and resides in another SFR in SF. Hmmm.... Alterior motive for the daughter? Ya think?

Regardless, this can be a nice score for buyers of the 2 flats if Granny buys the rear TIC, as the whole group can then enter the lottery immediately with no 3 year waiting period. Herein lies the opportunity.... but who do you believe? And don't forget if it doesn't pan out that way, Granny is protected at a cash-flow drainage-ditch rate of $397/month in the cottage, which really does need upgrades. Can be a nice opportunity if the cards fall right for this killer location..... or not.

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