January 16, 2008
A New Incentive At The Potrero: Six Months No Mortgage Payment
The Potrero is about roll out a new buyer’s “incentive program” (just don’t call it a reduction) for remaining one-bedroom condos. According to the SFCAHomes Blog, it’s going to be "six months of paid mortgage payments."
And although we haven’t been privy to all the details, we’re estimating the value of the incentive at roughly $15,000 (or 3% of the purchase price). Don't forget to adjust your future median sales price and comps calculations accordingly.
∙ The Potrero (451 Kansas) Update: Now 70% In Contract Or Closed [SocketSite]
∙ New Buyer Program at The Potrero [SFCAHomes Blog]
First Published: January 16, 2008 2:45 AM
Comments from "Plugged In" Readers
I would rather that be applied to the sales price. But in any event, $15k is not incentive enough for me. The location isn't great either.
Posted by: S&S at January 16, 2008 10:08 AM
Would anyone out there buy one of these and rent it out? Rents for 1BR in the city contnue to rise
Posted by: vestor at January 16, 2008 5:39 PM
next they will offer free groceries from whole foods.
Posted by: spencer at January 16, 2008 5:47 PM
Vestor: I considered buying in SF to rent out (investment), but just very roughly calculating the monthly cost to buy this place, say, for $800k (I don't remember exact pricing of these units, but just a very rough estimate and probably on the low side) for a 2/2 (I'm NOT a 1 BR buyer) with $160k down for a 30 @ 6.125% and property tax at ~$960/mo., this place would run about $3800 to $4000/mo. to own. I don't rent, so I could very well be wrong, but I don't think a unit in this particular development would be able to fetch a break-even $4k monthly rental for a 2/2.
Just a complete guess without doing any numbers at all, but I don't see it being worthwhile to buy and rent out a 1 BR here either, as I think one would still be in the negative rent-mortgage.
And, before all the number crunchers jump on me about my calculations, it's just a quick and dirty back-of-the-envelope calc, k? (Using VERY conservative #s) So it's not like I looked up/researched today's rate or rental prices or anything. :)
But if someone is just going crazy because of my oversimplified calc, please be my guest and "exactify" it. ;)
Posted by: S&S at January 17, 2008 10:51 PM
You are much better off having them deduct $15,000 from the purchase price. You will save hplenty of $$$ from a lower assessed value when it comes to paying your property taxes every year.
Posted by: Stan at January 18, 2008 12:27 AM
Not a good source of income for 2 BDs for sure (you can get a 2BD for FAR under 800K at this point...Henry is done with this project), but I just bought a studio there and with 20% down and a mortgage of 1400$ and taxes of about $400 a month I am just above break even for the next couple of years (HOA Dues paid for 2.5 years) and they paid my closing costs, transfer taxes, and buydown.
We'll see what happens in the next couple years. But as SF goes feeling ok about this purchase.
Posted by: yo yo potrero at January 18, 2008 3:08 AM
Six months paid mortgage sounds like desperation...I would agree with the others. It's just not that great of an incentive; I'd rather they lower the prices. Potential buyers should continue to hold out- more incentives will come, maybe lower prices too. Stay strong!
Posted by: David at January 21, 2008 12:05 AM