46 Tingley
A colorful bit of context might be in order. And yes, there’s double entendre in the title.
∙ Listing: 46 Tingley (4/2) – $599,000 [MLS]
It’s Gonna Be A Bright, Bright Sun-Shiny Day (Outside At Least) [SocketSite]

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Comments from “Plugged-In” Readers

  1. Posted by sanfrantim

    The ‘renting is better than buying’ crowd will have a field day with this listing! According to the MLS listing it currently rents for $1650 a month, and is price to sell at $599k ($800 + psf).

  2. Posted by The Milkshake of Despair

    Sheesh ! Did the SocketSite editors blip over into a parallel universe and find the anti-Ellsworth house ? This is too weird.
    Personally I don’t mind garishly painted houses but realize that I’m in the minority on that issue. As the new owner I’d repaint with something more bland and then sit back and let the rum balls and cookies flow in from the neighbors.
    Go Cal !

  3. Posted by Dan

    Looks like it is quite a bit larger than the listed 720 square feet, with an attic bedroom and an unwarranted ground floor in law.

  4. Posted by Anon

    Go Bears!

  5. Posted by nonanon

    sanfrantim – you forgot to mention that it’s also a short sale. purchased on 09/15/2004 for $620,000.

  6. Posted by missionite

    Yay! I’m having a field day! WOOHOO!
    Ah, let’s see, if we assume 10% down at 6% and take the rather generous view in this climate that the property will appreciate 2.5% over the next five years, you will only be losing $2,563/month owning this very blue building.
    Sounds like a current tenant, so they aren’t going anywhere unless you do OMI. If that’s the way you decide to roll, we can compare the purchase price against what you would be paying if you were paying market rates for rent for a similar property in the same neighborhood. There’s a 4 bedroom 2 bath in the excelsior right now just a block and a half away that’s asking for $2100/month:
    http://sfbay.craigslist.org/sfc/apa/514863447.html
    It’s a flat, not a SFH though, but a brand new home in much nicer condition not too far away will run you $3150:
    http://sfbay.craigslist.org/sfc/apa/515928056.html
    So let’s split the difference and say the market rate to live in this delightful adobe out of a peter max painting will run you $2500/month.
    Running the numbers at that point reveals that owning will only cost you an additional $1351 per month, or roughly $100k over five years.
    Numbers for everybody to play with right here:
    http://spreadsheets.google.com/pub?key=pM4Gw0s2zSeCsYpueVJB7JA
    (and as always I welcome feedback and suggestions on any errors or ways to improve the calculator)
    Of course any calculation by definition requires assumptions, and I think the big one in this case is assuming a property in the Excelsior will show a net appreciation over the next five years. Right now I’m seeing a lot of pain with sellers in that neighborhood, and I can think of several houses that are much cuter (I’ve been in ‘em), cheaper, have already had several price reductions, and are STILL sitting on the market unsold. Tough call to buy into that neighborhood, because I think there’s still potential for a long way down to go.

  7. Posted by Sabrina

    Missionite: Thanks for the great analysis (once again.)
    The difference between buying and renting right now is so huge it’s amazing to me that anyone is buying in a “non-prime” neighborhood. Buyers must still be assuming appreciation- otherwise it makes no financial sense at all.
    By the way, I LOVE the color. Only in San Francisco (or New Orleans.)

  8. Posted by Satchel

    About getting a renter out, my wife and I know a nanny around here, who bought a SFH w/tenant-occupied apartment in the Mission in 2005. Her granddaughter from a Central American country (not *sure* of her residency status) bought it with her. I know for a fact that they made $45/hour combined, but it was cash.
    I just heard through the grapevine that they finally are “almost there” in terms of getting the tenant out, and in the meantime the grandmother has been alternatively sleeping on a couch in the SFH or at a friend’s who is living in a rent-controlled apartment.
    These sorts of situations (without passing any judgment mind you) set the comps. True story.

  9. Posted by Trip

    missionite, you forgot to add in the legal fees to evict the tenant — probably another $20,000. SFRs aren’t rent-controlled, but SF tenants know that extortion is legal here.

  10. Posted by tipster

    Ha ha, 20K to get the tenant out? Oh, it’s going to cost MUCH more than that.
    Because as soon as you try to evict the tenant, the tenant is going to call the city building inspector, who will instantly slap a notice of violation on the ground floor in-law and the illegal attic.
    The removal of the ground floor in law (and costs associated with making sure its removal is permanent, such as the cementing of the plumbing and drains, which the building inspector will demand to remove the notice of violation and stop the fines from accruing, and the fines from getting bigger) and the removal of the upstairs will cost about $30K, and result in a loss of value of about $150K. The total reduction in value is 180K and it will cost another 20K in OMI legal fees to force the move. Total cost of eviction: $200K.
    So unless you are prepared to pay $599K and end up with a building worth $399K, this home is a permanent rental. Or you can pay the tenant to leave. If the tenant is smart, the tenant will demand $199K to leave, knowing that he is un-evict-able otherwise.
    And I would hope the seller treats the tenant well. Chances are, they didn’t pay any property taxes on the improvements. Tsk, tsk, if the tenant reports the seller to the county tax assessor, that’s another couple of dozen grand in property taxes, fines and penalties, depending on when the improvements were added. That means if the seller realizes it won’t sell and tries to kick the tenant out, the tenant can do all of the above, and cost the owner another couple of dozen grand.
    This property is for sale only by and to the naive.

  11. Posted by Brian

    Definitely not a good purchase choice IMHO…but think of how cool it would be to own the World’s Smallest IKEA!

  12. Posted by Miles

    I think Tipster is stating a worst case scenario, but it is an excellent point that illegal improvements are potential ammunition for a tenant in an eviction scenario. In most eviction cases you are talking about one to two months after purchase to get most tenants out with a payment of $4,500 per tenant (capped at $13,500 per building). Sure, a tenant can fight this, but most people who value having a credit and renting history won’t. Really, if you are going to apply for another apartment and your potential landlord finds out that you fought an eviction – goodbye. So yes, tenants add a wrinkle to it, and illegal improvements increase the risk that you will have to pull them out or bring them up to code – but the two year delay or $200K scenario are pretty rare. Oh, and things get more dicey if your building has a separate illegal in-law with a separate tenancy as these are treated as legal units under the rent control ordinance and you can only owner evict one unit per property. So in that case – you’re probably going to want to keep the in-law tenant or you can go through the process of permanently removing the in-law unit from the market and not renting it out again in the near future.

  13. Posted by anna

    Any guesses on the legality of all the decks out back? Wow.

  14. Posted by tipster

    FYI,
    Reports to the building inspector can be made anonymously, thus opening any landlord who would negatively affect a tenant’s recommendation to a slander lawsuit. And even if the person who called the building inspector had to provide their name, which they don’t, for $199K, a lot of tenants would take the risk.
    And there would be no basis for any impact to the tenant’s credit history, which would invite an easy-to-win libel lawsuit, should the landlord negatively impact the tenant’s credit.
    You are correct that this is the worst case scenario. It is imperative for an owner considering selling to remain on good terms with their tenant to avoid such problems, though an eviction is going to make the relationship very ugly, very fast. An acceptable settlement with the tenant will of course, avoid these problems.
    As for the buyer, because there is no relationship there, you can only wonder what the tenant is going to do and bid accordingly. Again, a mutually acceptable resolution is going to be, in the end, the least expensive solution, as long as it is less than $220K.
    Thus, an eviction here (or anywhere that has more than $50K of unpermitted work) is essentially out of the question. Getting the tenant to leave is really going to be the only cost effective solution. How much that will cost is anyone’s guess.

  15. Posted by Mole Man

    Yikes, those are some of the worst decks I have ever seen!

  16. Posted by Satchel

    I just checked the listing:
    “Good property and will not last long at this price.”

  17. Posted by tharpo

    Once again I am the lone salmon reminding everyone that not every tenant eviction goes badly. I had no trouble at all with the tenants in residence when I purchased my condo — they were gone in 30 days with no issues or complaints.
    Yes, it’s good to be conservative and plan on things perhaps going awry here and there, but if I took the advice of most folks on this blog, I would have rented forever and been petrified to act.

  18. Posted by james

    let it go into bankruptcy, then buy it after the bank takes it which gives the tenants no rights and no home.

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