February 24, 2009

What's Fair Market For (The Bank Owned) 61 Fair Avenue In Bernal?

61 Fair Avenue

A Bernal Heights single-family (with in-law in the basement) sales comp in May of 2006 at $980,000, 61 Fair Avenue was bought back by the bank in December of 2008 for $949,862 (suggesting a bit less than 20% was put down).

Tenant occupied with "protection status undetermined" (which could have dashed some dreams). Back on the market today and asking $760,000.

∙ Listing: 61 Fair Avenue (4/2) - $760,000 [MLS]

First Published: February 24, 2009 12:00 PM

Comments from "Plugged In" Readers

Undetermined? If someone buys it and wants to occupy the building the tenants get 30 days. Owner occupied trumps it. Assuming they are on a month to month lease. What else is there to detemine.

Posted by: SF-Hunter at February 24, 2009 12:10 PM

"Protected-ness"

Posted by: El-D at February 24, 2009 12:17 PM

I may be wrong but I don't believe an OMI is possible if the tenant is "protected", meaning over 65 and lived in the building for more than 10 yrs or disabled.

Posted by: beb0p at February 24, 2009 12:19 PM

Wouldn't you need to pay relocation costs upwards of $13.5k?

Posted by: RuckShaw at February 24, 2009 12:21 PM

This has an inlaw in the basement - therefore it is considered a two-unit building for rent control purposes and "just cause" eviction. Best bet is to "legally" remove the illegal inlaw apartment. Then it is a single family home. Then you can OMI the tenant in the house. Not fun for anyone tho....

Posted by: anon at February 24, 2009 12:34 PM

From the tax records, it looks like the $980K "purchase" back in 2006 was by our old friend Melvin Mendaros. Take a read here:

http://www.socketsite.com/archives/2008/05/can_bank_owned_comps_kill_aka_246_2nd_street_502_return.html

(see Posted by: joerealtor at May 22, 2008 3:51 PM)

LOL. Nice trade, guy! Who says you couldn't make lots of money after 2006 in SF real estate? :)

(Looks like Wells Fargo ate the loss on this 61 Fair Avenue property. No big deal, the taxpayer is always ready to make it up.)

Posted by: LMRiM at February 24, 2009 12:45 PM

Goodness, the misinformation you get.

A protected tenant cannot be OMI'd no matter how many units the building has. Even 1 unit.

A protected tenant can be Ellised with one year notice, but you couldn't then use the building as a rental for 5 years.

Posted by: tipster at February 24, 2009 12:58 PM

Melvin Mendaros: Bay Area Business Leader

Mr. Melvin J. Mendaros leverages years of marketing experience toward his role as a member of the Business Development team at Motion Media Network......Melvin Mendaros laid the foundation for his professional success with his educational achievements at the University of California at Berkeley. Graduating in 2002, Melvin Mendaros earned his Bachelor’s degree in Legal Studies and minored in City Planning

you couldnt make this stuff up

Posted by: mkm at February 24, 2009 1:09 PM

Wow, how many Mendaroses are there out there?

I thought these scams were limited to real shady locales like Miami or Vegas? But in SF? The banks were really asleep at the wheel on these ones.

It's similar to the Madoff scandal. Knowing something that big could have happened really makes you think about how many of these are left to be uncovered.

Posted by: San FronziScheme at February 24, 2009 1:11 PM

Incorrect, Tipster. LOL at you feigning umbrage at misinformation.

http://www.sftu.org/omi.html

"Long-term Senior, Disabled and Terminally Ill Tenants Protected—Senior (60+) and Disabled (SSI eligible) tenants with 10 or more years tenancy can not be evicted for OMI. Terminally Ill (SSI eligibility + terminal illness diagnosis) tenants with 5 or more years tenancy can not be evicted. Please note that these prohibitions do not cover tenants in single family homes (or rented condominiums)."

The problem with this one seems to be the unit. In DBI's eyes, it's likely a single unit. To the Tentant's Union, it'll be a two unit. It's murky to swim in those waters.

Posted by: anonn at February 24, 2009 1:17 PM

I'm not an expert in SF rent control law, but my understanding is that if the inlaw was done without permit, then all the rent control laws apply, including any protections for "protected class" tenants. If the inlaw is legal, then it's a 2-unit, meaning that the OMI safe harbor for SFRs does not apply.

Is my understanding right here?

Posted by: LMRiM at February 24, 2009 1:21 PM

"Please note that these prohibitions do not cover tenants in single family homes (or rented condominiums)." Nope. This is eviction control, not rent control. 1 unit=eviction control, but not rent control. Same for LMRiM, 1 unit is all you need for eviction control.

Rent control and eviction control covers the entire city. A state law trumps that city law that says rent controls cannot be applied to SFRs and condos.

anonn, I was explaining the status of a "protected tenant". The explanation I gave was correct. You identified a different class of tenant. That is a narrower definition than "protected tenant".

Posted by: tipster at February 24, 2009 1:27 PM

With the protected tenant issue, I wouldn't touch it unless it goes under 300K. It's probably a very long shot deal. You buy it all cash when you're 30 with money you don't need and by the time you retire the issues with the tenant will be resolved! And then you'll have to redo the property.

Pay anything close to asking and you'll waste your youth trying to evict the person.

Posted by: San FronziScheme at February 24, 2009 1:37 PM

I explained that, LMRIM. If it's legal no OMI on a protected tenant. If it's illegal you may be able to do an OMI, but be prepared to fight for it in court.

These guys are now saying that it's considered a two unit regardless. They have changed their tune. They used to say it was a dispute between two bodies and could be pursued in court. I'm thinking a ruling or two changed their minds. Who knows? Maybe it was this Fair street house!

Here: http://www.g3mh.com/~gthrmhco/downloads/2008-Tenant-Evictions-Brochure.pdf

Tipster, any "protected tenant" in an SFR or rented condo can be evicted with OMI.

"Tenants evicted from a single family home for owner move-in purposes are not entitled to
claim protected status. Note that a single family home with an unwarranted in-law unit is
considered to be a 2-unit property, and is not eligible for this special rule."

Posted by: anonn at February 24, 2009 1:40 PM

Crap. I'm wrong. 1 unit means eviction control applies, but there is an exception for protected tenancy preventing an OMI if the property is the only unit the owner owns in the building.

This would mean that if someone owns two units in a condo building, OMI would not be possible.

Everyone else wins. I lose.

Posted by: tipster at February 24, 2009 2:01 PM

Don't you get one OMI per building even with multiple units? In other words, could two "partners" buy this place, one of them move in to the vacant unit and the other OMI the tenant, then the first partner buy out the second?

Posted by: Trip at February 24, 2009 3:06 PM

^ No. No OMI evictions of a protected tenant in a multi-unit building.

Posted by: DanD at February 24, 2009 3:17 PM

DanD, is that absolute? I thought that the protected tenant restriction does not apply where the unit is the only one owned by the evicting owner, which would be the case in my partner scenario.

If this protection is absolute, I guess you'd have to Ellis -- which still may not be that bad. Hire a good lawyer (and obviously not me -- I know little about this area other than that I wouldn't wade into it without sound legal help).

Posted by: Trip at February 24, 2009 3:29 PM

Don't you just love how clear and easy to understand all the rental laws are in this city!

Of course that still doesn't excuse the alleged behaviour of the owners of that Clementina property that keep popping up in the news.

Posted by: Rillion at February 24, 2009 3:38 PM

yes, but if you bought this as a an SFR as it is, then you would just deduct the $15k tenant exp, and another $5-10k for legal and Ellis the unit. You want it to be a SFR, so why worry about it?

Posted by: Geo at February 24, 2009 4:30 PM

When I was looking at a SFR in Bernal, there was a protected tenant. I don't know the specifics of the law, so I consulted an attorney specializing in SF rent control law. He said I could do an OMI, but that it would likely cost be $50-80K in payments and fees. It would also likely take 6-18 months, and that we'd likely be out rent for that entire time.

Posted by: D at February 24, 2009 4:52 PM

Best thing to do is to try and buy out the tenant. But if it's an 80 year old person on a fixed income, good luck with that (and, check your conscience at the door).

But it could also me a 60yo or someone with a minor disability that would be happy to take $30-40k and put 50% down on a modest home in Sacramento or Vallejo. It's risky business but at a big enough discount someone will tale it on (if the home is not a total POS with no upside.)

Posted by: 45yo hipster at February 24, 2009 5:35 PM

"DanD, is that absolute? I thought that the protected tenant restriction does not apply where the unit is the only one owned by the evicting owner, which would be the case in my partner scenario."

The eviction exception is for SFRs and condos, the scenario you describe is a TIC which would not qualify.

Posted by: DanD at February 24, 2009 6:21 PM

How do you spell Q-U-A-G-M-I-R-E?

Its only a matter of time before RE prices reflect the injustice that tenant-eviction laws impose on landlords.

Posted by: Jimmy (No Longer Bitter) at February 24, 2009 6:26 PM

Is that the protected tenant on the front steps (wearing a down coat)?

Posted by: Chuck Woolery at February 24, 2009 9:58 PM

The only way to get a protected tenant out of a multi unit building that you also reside in is to move an elderly parent into his/her unit. That is the only way someone could get this particular protected tenant out, short of Ellis, it would seem.

And I gotta say, as a Bernal multi unit homeowner, I am very pleased that the bank thinks this is worth 760K. It's garageless, basically yardless, judging from the location viewless, a corner lot, and a half block off Mission. Banks are conservative. While 980K was really high, 760 for something such as this is not that low. I wonder if my superconforming limit theory as it applies to Bernal, Glen Park, etc. is in play here.

Posted by: anonn at February 25, 2009 8:46 AM

Ahem, askin' ain't gettin'

Posted by: diemos at February 25, 2009 8:54 AM

Oh, do enlighten me regarding the state of the Bernal marketplace, diemos.

Or don't and just let stand that snide little comment you took five seconds to consider.

The choice is yours.

Posted by: anonn at February 25, 2009 9:14 AM

I can't believe anyone would even want to live in Bernal - it is a dirty Ghetto and the "park" is pretty gross.

Posted by: SF Banker at February 25, 2009 9:16 AM

I love the feistiness of anonn! He'll fight this all the way down.

OT - is your flip sold? I noticed "Still Available, but do hurry...." on the website. If it did sell, congrats.

Posted by: LMRiM at February 25, 2009 9:18 AM

"I can't believe anyone would even want to live in Bernal - it is a dirty Ghetto and the "park" is pretty gross."

LOL at "Ghetto." Have you ever been to an actual ghetto? I doubt it.

Which park is gross to you? The one with the astonishing views (Bernal Hill), the one with the tennis courts atop it (Holly Park) or the one with the cute children's playground (Precita) ?

Posted by: anonn at February 25, 2009 9:22 AM

If it is an illegal inlaw, you can legally remove the inlaw (remove the kitchen). You file a letter to the tenant to tell him that you realized that the inlaw is illegal and you are removing it (giving them some notice). It then becomes a Single Family Home and you can OMI with payment.

Posted by: anon at February 25, 2009 9:36 AM

I like Holly Park as well as the Hill. Done hiking / jogging on both. BH feels like an island with the trees at the top and the metal sharks hovering all around on SJ, 280, 101 and Cesar Chavez.

Posted by: San FronziScheme at February 25, 2009 9:41 AM

well the mls now reads "Tenant occupied- do not crash! Tenants are NOT protected" I am unclear on what they are getting at with do not crash, i suppose it means, don't be too upset about tenants but at first read my thought was...why are they telling me i can't sleep over?

Posted by: drsquid at February 25, 2009 7:15 PM

SF Banker says "I can't believe anyone would even want to live in Bernal - it is a dirty Ghetto and the "park" is pretty gross"

Bernal is a great place. If you want a cold windy place with no atmosphere, try Pacific Heights. oh.. and you'll have to put up with bankers in their Land Rovers.

Posted by: hillchill at February 26, 2009 4:24 PM

thanks everyone for turning this into a long, boring thread about rental law while "mkm" posts unbelievable information on the owner!

mkm: where did you get the "Melvin Mendaros: Bay Area Business Leader" information? That's incredible! (though I'm really embarrassed bc I apparently went to school with him)

Posted by: rg at February 28, 2009 7:05 PM

This is all super intersting.

We are some of the unfortunate people who were screwed by Melvin Mendaros out of signifigant money - we use to live in *this* house.

After reading the other link, I'm amazed by how many people he stole from.

The inlaw unit is illegal, we lived in it until the place was forclosed on but we have since moved out. If anyone lives in the lower unit now, they moved in after the bank bought the house back and foreclosure was finalized. We lost our deposit becasue the remaining tenets did not want to sue Melvin for our deposit and we were sub-tenets and so could not sue him on our own.

Because we lived there, we know what the place is like. My understanding is that to be a legal bedroom, the room has to have a window, a closet and a door that closes - none of the rooms in this basement unit have that. We know for sure that the basment apartment is illegal.

Do OMI laws apply for a two unit place when one unit is illegal and vacant?

Posted by: ML at March 11, 2009 7:53 PM

Yes, ML, OMI laws apply. Once they rent out a separate unit, even if it is illegal, they need to get a permit to take it out. Until they do it and the permits are signed off, the building has two units whether one is vacant or not and the bank who kicked you out was the owner, and so there could be no omi. They can be sued for wrongful eviction if they demanded that you leave.

Also, the bank owned the property when you left and so the bank owes you the deposit. When they bought the property, the lease was terminated and went month to month, but the old owner was supposed to transfer the security deposit to the bank. It is the bank's responsibility to go after the old owner, you can sue the last owner during your tenancy (the bank) in small claims court for the deposit and you'll win easily. You should ask the bank for it back first. Wrongful withholding of the security deposit subjects the bank to a penalty that is 3X the deposit. If they tell you to take a hike, show your letter to the judge and you get 3 or 4X your deposit back (I forget which one). Note that this may depend on who the actual owner is. Some states exclude deposit responsibilities for federally chartered banks, but only if the bank owns the property (unlikely). If the bank was servicing the loan, their exclusion does not apply. You need to find out who bought the property at the foreclosure sale - that is the party you will sue, both for wrongful eviction and for your deposit.

You should talk to a lawyer - there are frequently exceptions I may not know about and there may be deadlines you must not miss.

Posted by: tipster at March 11, 2009 10:12 PM

Does it matter that the whole house was rented under a single lease? The two units weren't rented separately, they were both included on the same lease. We had a year long lease, which reverted to month-to-month after that year was up. We were there for two years, so the second year was month-to-month.

Posted by: ML at March 13, 2009 1:30 PM

Reduced to 725,800.

Posted by: Chris at March 17, 2009 11:28 AM

61 Fair is now down to $689,800, 30% below its 5/2006 price.

http://www.redfin.com/CA/San-Francisco/61-Fair-Ave-94110/home/757685/sfarmls-353123

Posted by: LMRiM at May 11, 2009 5:12 PM

61 Fair is now down to $655K, 33% below its 5/2006 price, and - look at that - now only 2 DOM!

http://www.redfin.com/CA/San-Francisco/61-Fair-Ave-94110/home/757685

Interestingly, the language about the tenant is gone - I guess the place is empty.

Posted by: LMRiM at May 31, 2009 6:17 AM

The list price for 61 Fair Avenue has been reduced to $635,000, now asking 35% less than its sale price in May of 2006.

Posted by: SocketSite at July 3, 2009 9:57 AM

Another one that is down 35% from last sale and still not sold. Fantastic!

Posted by: LMRiM at July 3, 2009 10:09 AM

Another one that is down 35% from last sale and still not sold. Fantastic!

Did you read this thread, LMRiM? Did you take note of what the former tenant in the illegal unit had to say? I think you did. And I think you said your little shpiel anyway. LOL

Posted by: anonn at July 4, 2009 11:13 AM

The list price for 61 Fair Avenue has been reduced to $603,900, now asking 38% less than its sale price in May of 2006.

Posted by: SocketSite at August 3, 2009 8:19 AM

Mendaros's Klan company's - Trans Pacific Mortgage aka Mendaros & Co. Pleasanton, Ca currently have Complaints Filed by The California Corporations Commissioner - Accusation & Order Revoking Residential Mortgage Lender License Pursuant to California Financial Code Section 50327 File No. 415-0044
http://www.corp.ca.gov/ENF/list/m/MendarosFamily.asp
http://www.corp.ca.gov/ENF/pdf/m/MendarosFamily_Order-Revoke.pdf
http://www.corp.ca.gov/ENF/pdf/m/MendarosFamily_Accusation.pdf

Johnny Mendaros, father, in the 1990’s, Johnny Mendaros had his Real Estate License taken away due to scamming his investors. Since then, Johnny had his daughter Michelle Mendaros, son’s Mark & Melvin Mendaros to act as fronts of his family schemes for many years.

Posted by: Ad at August 18, 2009 5:57 PM

***Public Notice ***
Mark A. Mendaros
Re: LA Superiour Court Case No: BC 405965

Mark A. Mendaros is a FRAUDSTER. I was awarded a $11.7 Million judgement against Mark A. Mendaros (interest accrues daily at more than $3,000.00) in the above entitled case. He is personally liable as well as his sham business Motion Media Network. The judgment includes a finding of fraud and intentional Tort - so he can NEVER get rid of me - not even going bankrupt.
For the record, I gave him multiple opportunities to right his wrongs. He's a fool and two bit con. I feel a bit sorry for his wife, Leah Mendaros. Unfortunately she’s half liable for her husband’s ill deeds.
Beware of the Mendaros Klan....


Posted by: Mike Stephenson at November 23, 2011 9:49 AM

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