December 30, 2009
Playing Chicken With A Five Year Arm (It’s Not Just About Rates)
I’m caught in the mortgage crisis by association. I took a 5 year arm mortgage with a balloon payment thinking I could re-finance. There are no loans today for Showman with non-conforming warehouses. So it goes on the block. Hell, I’ll even finance it…
And as a plugged-in tipster added last week:
Although it's his home, he's made it into a funky hangout space for the local arts community... it will be sad to see it fall into the hands of more sensible property owners, but such is the way of the world.
Or perhaps not. A follow up from from Chicken John yesterday:
I talked to a loan guy today that may be able to do something. I only owe like $220,000. It's not *that* much. It's all phony money to me. I've got like $60 in my pocket. It's comedy, really...
∙ Listing: 3359 Cesar Chavez (1/1) 2,800 sqft - $899,000 [MLS]
∙ Chicken John Is Selling His Legendary San Francisco Warehouse [Laughing Squid]
First Published: December 30, 2009 7:00 AM
Comments from "Plugged In" Readers
Perhaps loan broker should forward chicken's last comment to bank as part of his "application."
chicken, a 5 yr balloon? When cheap 30 yr fixed were readily available? What were ya thinkin'n? Oh well, this chicken just got smoked.
Posted by: 45yo hipster at December 30, 2009 9:18 AM
Something seems a fowl...
It looks like he bought with a partner in 2004 for $370k...
then had a new partner buy out the 1st partner for $200k in 2007, but he must have been able to transfer the loan without a Refi at that point...
If he owes $220k now, it seems like the 2004 loan must have been neg-am...
Posted by: J at December 30, 2009 9:34 AM
I honestly did a triple take when I saw he's asking 899K for a zero lot line structure on Cesar Chavez. It's akin to the list price floated out there by the individuals developing the super nice two unit condos on Harrison @ Cesar Chavez.
Posted by: anonn at December 30, 2009 9:36 AM
what does 'zero lot line structure' mean?
Posted by: Rillion at December 30, 2009 10:27 AM
It means there is no backyard. The structure abuts the lot behind it.
Posted by: anonn at December 30, 2009 10:40 AM
What does "caught in the mortgage crisis by association" mean? I googled it, but could not find any clear answers.
Posted by: gmlight at December 30, 2009 10:54 AM
It means he f'd up and was imprudent.
Posted by: J at December 30, 2009 11:07 AM
I don't know about f'd up, but he defineitely choked...
Posted by: marko1332 at December 30, 2009 11:36 AM
yeah, he's plucked...
Posted by: J at December 30, 2009 11:49 AM
@Rillion: the place actually has a huge back yard... there's a lot of junk, a picnic table and a firepit back there. Dunno if this is part of the same lot or a separate vacant lot that is accessible from the back of the warehouse.
Posted by: yeastbeast at December 30, 2009 12:15 PM
Prisoner in his own coop
Bank chokes the Chicken
Posted by: OneEyedMan at December 30, 2009 12:42 PM
The listing link on laughing squid says zero lot line. The tax info says building + 195 feet. Regardless, the guy would net a large profit if he asked for a more realistic price. He's over there talking about "You price by the foot, that's how you price." It sure looks more like, "I want to net a half million."
Posted by: anonn at December 30, 2009 12:58 PM
Owes $220K but is asking $899K?
reminiscent of the greedy landlords on Valencia pricing out local business and courting chains like American Apparel eh?
Posted by: zig at December 30, 2009 1:18 PM
You are greedy if it is a down market and clever and smart if it is an up market.
Posted by: kathleen at December 30, 2009 1:53 PM
Loan balance should have no impact on sale price.
Its' value is whatever it can sell for...
Posted by: J at December 30, 2009 2:29 PM
The value is probably about 700K, and he'd make a nice return there too. But I didn't say anything about greedy. The guy has an agenda is all.
Thank goodness Valencia didn't get American Apparel. Not because it doesn't belong, or because it would have been a landlord sellout. Because it sucks. Just because you don't use sweatshops shouldn't earn you a pass to sell clothing that falls apart after one wash.
Posted by: anonn at December 30, 2009 2:38 PM
@ anonn (or anyone else in the know):
What's going on with that "super nice" 2-unit development on Harrison b/t Cesar Chavez & Precita? It looks like construction has been stalled for several months. I wonder if the developers ran out of dough. Could it become a sweet pad (or two) for someone to pick up on the courthouse steps?
Posted by: observantneighbor at December 30, 2009 2:49 PM
I looked into it not too long ago. I was told the developer was well monetized but that he needed to come to reality as far as pricing is concerned. It could, maybe go to the courthouse steps. Maybe they'll walk away. Anything is possible. But it's definitely two units.
Posted by: anonn at December 30, 2009 2:54 PM
I don't have the money, but it looks like a fun place to own. Wouldn't want to pay a mortgage on it, though; just own it! It has a creative energy to it.
Posted by: dkzody at December 30, 2009 3:49 PM
"Just because you don't use sweatshops shouldn't earn you a pass to sell clothing that falls apart after one wash."
I have several shirts and sweatshirts from AA and they hold up fine to washing. Had many of them for several years now.
Posted by: Rillion at December 30, 2009 4:12 PM
Comments on this thread and others reflect the imminent full blue moon. Happy New Year everyone!
Posted by: Oceangoer at December 30, 2009 4:28 PM
The Dawson&Clinton two-unit development on Harrison off Cesar Chavez which is referred to above: We’ll Give You The Jump Once Again: 3119 Harrison On The Market and We Gave You The Jump, Now Some New Renderings: 3119 Harrison
Now back to Chez Poulet...
Posted by: SocketSite at December 30, 2009 5:19 PM
When I was cruising craigslist for rentals a few months back I came upon a roomate share for this property. Owner was looking for artist types of independent means who wanted to share a home/studio space. Potential roomates could even be into Burning Man a little, but not too much, according to the ad. If anyone knows of Chicken John, that was amusing.
Posted by: curmudgeon at December 30, 2009 5:35 PM
BTW, zero lot line actually means attached housing (as most SF housing is). It doesn't mean there's not back yard, just no side yards. At least that's how it's used in the rest of the country. I rarely hear anyone use the term in SF.
Posted by: curmudgeon at December 30, 2009 5:37 PM
What was that about properties on thoroughfares?
Posted by: bgelldawg at December 30, 2009 10:15 PM
Yeah, Curmudgeon. Zero lot line technically means one wall or more is on the property line. It's not uncommon locally. Around here since many properties are like that or practically like that on the sides anyway, it usually means the building extends to the rear of the lot as well. Regardless, I didn't introduce the wording in this case and the lot is 195 feet larger than the building here. Not sure what's behind the structure. There are a few parking lots along the street behind/parallel.
This one is on a thoroughfare too. Not sure what it has to do with the price of fish.
Posted by: anonn at December 31, 2009 9:13 AM
While we're on the subject of zero lot lines I'd like the commentariat to edumacate me. Do those walls never go bad or need maintenance? How do you get at them to fix something?
Posted by: diemos at December 31, 2009 9:17 AM
They stay in pretty good shape as long as the roof, front/back connections are maintained. If they need work you rip your house apart from the inside. Usually the repair work in on the ground floor of older places where one house's framing/siding abutts the others soil (under foundation). In this case you shore up the house, cut out the rot and pour a new higher foundation.
The houses don't actually touch each other there is a little space.
Posted by: sparky-b at December 31, 2009 9:25 AM
Good question, diemos. With the large number of homes like this in SF this is definitely an issue worth investigating on a property you are considering for purchase. Water is the enemy of wood. Look at how your roof and the neighboring roofs are configured (and guttered) to get an idea of the volume of rain water that goes down the slot between houses. Also, check the construction dates of the property related to adjacent structures. The first one built is likely to have a much more robustly constructed skin due to the fact that the builder had access and it was 100% visible after construction.
Posted by: OneEyedMan at December 31, 2009 9:39 AM
Is it just a coincidence that the listing agent's last name is Fowler?
Posted by: Dan Clark at December 31, 2009 9:40 AM
I'm surprised nobody has mentioned that Chicken John has been living in NY for the last few years...
Arent there rules about mortgaging a property as a principle residence?
Posted by: Joe at December 31, 2009 11:54 AM
If you own $220,000 and you are asking $899,000 you have a lot of room to adjust to attract buyers before any "auction block" activity. This is what quick, decisive price reductions are all about...
Posted by: Anon at January 2, 2010 9:39 AM
Joe, Chicken has not been living in NY the past few years. Some might remember that he ran for mayor of San Francisco only a little over one year ago. I know a few people that have lived at Chez Poulet recently and, except for various art trips and the like, he's been around and a resident.
Posted by: Mark at January 2, 2010 5:30 PM
I'll be happy to see that tacky self-promoting mural gone.
Classic that someone who once promoted himself as a progressive, for-the-people candidate is trying to make big bucks with this sale. He could easily make his (loan) money back and sell to a community group/nonprofit for a reasonable rate.
Posted by: long time bernal neighbor at January 4, 2010 3:45 PM