June 16, 2009

21 Buena Vista Avenue ("The Witches Hat") Returns…As A Rental

21 Buena Vista Avenue

We first introduced you to 21 Buena Vista Avenue (a.k.a. The Witches Hat) in July of 2006, asking $4,950,000 at the time (down from $5,475,000 in May). And we last featured it in September of 2007 having been reduced to $3,900,000 (but failing to sell).

As a plugged-in SocketSite reader now reports, the Witches Hat has returned. As a rental:

We seriously considered buying this place, but we thought the neighborhood was a little too "edgy" for the price tag. Our Agent told us that the sellers at the time were willing to take $3.2MM (we were holding-out for $2.8MM, and given the recent market direction we would pay less now). The current owner...paid $3.875MM.
The current asking rent of $17,500 is roughly equal to the current level of interest payments on this place if he put 20% down and did a traditional 30y fixed.

Cheers. And as always, thank you for plugging in.

21 Buena Vista Avenue By The Numbers [SocketSite]
21 Buena Vista Returns With A Fifth (And Final?) Reduction [SocketSite]
$17500 / 6br - Buena Vista, Lux Vict 6bd, 6bth, cmpl rmdld hs, 2car, amz vw [Craigslist]

First Published: June 16, 2009 8:30 AM

Comments from "Plugged In" Readers

Maybe. I'm not sure the guy who listed this is legit. There are a lot of crackpot listings on craigslist and "listings" by people who have no authority to actually rent a place out.

But it is a curious development. If it is legit, there is no way anyone would pay that sum to rent this.

Posted by: Trip at June 16, 2009 8:43 AM

I think that rental agent, mazal bordo, is on the level, Trip. Their stock in trade seems to be clueless HR critters at companies and their equally clueless recruits. From what I saw out in Monterey Heights, they did seem to deliver every now and then and get a property rented at what seemed to be an outrageous rate (obviously I couldn't know for sure what the actual rate was, but the asking rate was absurd). Invariably, when the people moved in, they had out of state plates.

If the details on this Buena Vista place are accurate - namely purchasing for $3.875M, dreaming of cashing in while ultimately following the market down, and now "trapped" in the asset by an inability or unwillingness to accept the loss of real and inaginary wealth - it's a classic story. One that is going to be repeated literally millions of times in California.

About the rent, my handy rule of thumb is that foolish owners who overpaid should subsidize deserving renters to the tune of an implied 300x monthly rent multiple. Perhaps 400x on very expensive properties. Again, assuming that the reported details are accurate, it would appear that the max attainable purchase price of this place should be less than $3M, implying a max rent of $10,000/mo, and likely a good deal less. That of course appears very high, but perhaps attainable for a short term tenant when a company is paying anyway?

Posted by: LMRiM at June 16, 2009 9:16 AM

Mazal is legit but rentals in SF are just plain insane these days and asking prices are still way too high. $17.5k is a total joke. I'd venture that there are fewer than 250 places in SF that rent for greater than 15k/month, if that. Even the top places in PH with top views aren't even commanding 15k right now.

Here is a little fun website in my name link showing some history; and more pics online dating back to exactly 3 years ago today when this was listed by Zepher for $5.475, promptly reduced to $4.95 in July, $4.5 in Feb 07, $4.25 in Mar 07, $3.9 in Nov 07 with all marketing ending in Feb 08.

Crazy.

Anyone have any estimate on what this place is probably worth today?

Posted by: eddy at June 16, 2009 9:22 AM

Normally I would suggest renting out individual rooms if the rent for a place is too high for a single family / individual, but in this case, even that seems exhorbitant.

Example, if the 6 bedrooms were to be rented out individually to 6 different blue collar workers (waiters, mechanics, cleaner etc etc on who the city still depends...), even then the 17.5K distributed over 6 tenants comes to slightly less than 3000 dollars PER ROOM.

Are u kidding me ?!!

I bet the witch (in spirits) in this home is zig-zagging on her broom rides here looking down on this situation :)

Posted by: Chad at June 16, 2009 9:23 AM

LMRiM -

You've reversed the typical calculation and posed it as how much rent to pay vs selling price of home, whereas it's usually done on the buy side looking at potential rent.

However, if you paid 300 x (monthly rent) for a home, then you overpaid. 400x is ridiculous. I've seen quoted 15-20 years rent as the long term average trend (180-240x monthly rent)

Posted by: rr at June 16, 2009 9:26 AM

I know I'm way too late to join this train, but this is the first time I screamed when I saw the "updated" kitchen in a Victorian full of charm. Come on, the building is known as "the witches hat" keep the charm, don't gut and put in a blah kitchen. Also, the kitchen sink that sticks out is killing me...

Posted by: bizzybee at June 16, 2009 9:27 AM

I stand corrected on the rental agent. We had our summer associates start a couple weeks ago and I heard from two of them of run-arounds on craigslist listings before concluding that they were exchanging calls with someone who was not the landlord or agent. Don't know how common that is.

Fwiw, this is one of my favorite places that has ever been featured on SS. But almost $4 million for anything in this location is insane -- I really like the area but that price is way out of line.

Posted by: Trip at June 16, 2009 9:30 AM

That's almost $3,000 per bedroom. You can stay at the Ritz for much less than that!

Posted by: Julie Peisner at June 16, 2009 9:33 AM

Exactly, rr. By observing attainable rents on SFRs (just anecdotal of course), it's easy to "reverse engineer" the formula.

180-240x for desirale SFRs (not "starter properties") in established and desirable nabes strikes me as a reasonable range for a valuation metric based on attainable monthly rent. Perhaps a bit on the high side going forward, because the long term averages reflect genrally falling interest rates (on a trend basis), while going forward we are likely to experience generally rising rates (not too much rising in the near to mid term imo, but it's hard to get much of a long term trend down from 4-6% on the long end and 0% on the short end!).

Posted by: LMRiM at June 16, 2009 9:35 AM

I read in an earlier thread that the home essentially backs onto a halfway house - that may explain some of the difficulty in selling it. I understand the negative comments about the price/asking rent, but I've always loved this house. Such distinctive Victorian style! My favorite place to play tennis in the city is just across the street in Buena Vista Park - there aren't too many tennis courts that offer specatular views of downtown San Francisco.

Posted by: Mose at June 16, 2009 9:44 AM

If you've ever seen this house in person, you'll recognize what an great job of cropping the photographer did in the pic above.

I guess if you rent this house you can pretend that you're in Yosemite Valley camping out under Glacier Point.

Posted by: Sb at June 16, 2009 10:23 AM

Six bedrooms at 17,500 is 2,917 per bedroom per month or 97 a night. No, you can't stay at the Ritz for that. Come to think of it, though, this would make a great B&B.

Posted by: Salarywoman at June 16, 2009 10:30 AM

Okay, maybe you can't stay at the Ritz for $97/night, but you don't have to pay utilities and you get maid service and comfy beds, and maybe even a mint on the pillow. I think we're even.

Posted by: Julie Peisner at June 16, 2009 10:38 AM

For correctness' sake, it's at 21 Buena Vista Ave. East.

There's nothing unusual about the photo cropping. Like many houses in SF, it has an apartment building uphill (not a halfway house -- whoever said that was thinking about the other side of the park). And a wide driveway downhill allowing for windows.

Posted by: theo at June 16, 2009 10:59 AM

Mazal is indeed a serious person, and has rented places in PacHts. But when I asked her if the building (single family house, now three or four units) was for sale, for a long time she couldn't get in touch with the owner. Then she came back with a price more than twice its value, implying that the owner did not want to sell. It is still rented now, trapped in rent control. Mazal is at the mercy of her owners, as in this ludicrous rental price. Good luck Mazal!

Posted by: Conifer at June 16, 2009 11:11 AM

I think if they lowered the asking rent to $6000/mo then they could get 6-8 recent college grads to share the place which would really do wonders for the condition after a year of huge parties.

On the upside it would be a sweet pad and you could probably pack 400 people (and about 20 kegs) into this place on a Saturday night.

Posted by: Jimmy (No Longer Bitter) at June 16, 2009 12:23 PM

If it becme a B&B it would be going full-circle. It started out as a heath-spa earlier this century.

There is a halfway-house very nearby (you can see it from this building), but I don't think this property directy backs onto it.

I am most surprised that they kept the giant cologne bottle in the bathroom that was there when the house was staged to sell. I wonder if they also kept the awesome round bed on the top floor.

If you're trying to look this up on PropertyShark you need to look for 2100 Buena Vista.

Posted by: HappyRenter at June 16, 2009 4:43 PM

^HappyRenter, good eye. I remember the round bed in the staging when they were trying to sell it, but I don't recall the giant cologne bottle. I guess the cologne bottle stayed because that was actually purchased by someone (and not rented like the furniture probably was).

As far as Jimmy's comment on the keggers.... Yes, there's even a pool table. If it doesn't come with the place, then you know where one would go. Personally if I were of that mindset I would probably put the pool table on the ground level.... as I recall there's a kitchen (bar?) down there and easy access to the back patio for whatever it is college students do out back at parties. Perfect as the main entertainment area for keggers.

But I do generally like this house, but that kitchen has to go.

Posted by: StockBoySF at June 16, 2009 6:57 PM

Case in point about how real estate in SF still has huge declines ahead. Mortgages are still extremely out of line with affordability, especially for homes bought in the last few years. Add the current economy into the mix and you have a disaster waiting to happen.

Posted by: Smiling Millionaire at June 16, 2009 7:06 PM

I hope the owner has a high quality magic wand to go with his witches hat.

Posted by: Smiling Millionaire at June 16, 2009 7:10 PM

I am native to SF. What is the original orgin of the house? Hotel or personal residence? It was built 1892

Posted by: chani at October 3, 2012 2:34 PM

Back at $6.5. No pics; coming soon.

Sold in 2007 for $3.875

Posted by: eddy at January 8, 2013 8:54 AM

Posted by: SocketSite at January 9, 2013 9:25 AM

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