Category Archives: TICs & Multi-Unit Bldgs

First-Time and Luxury Home Buyers Embrace “Permanent” TICs

Once seen as a stepping stone to condo ownership, tenancy-in-common (TIC) interests have become widely acceptable to San Francisco home buyers as “permanent” TICs. But it’s not just the first-time home buyers who are getting into the TIC game. Luxury buyers are also jumping in.

The fact that condo conversion probably won’t be a future option for TIC owners in buildings with three or more units doesn’t seem to be slowing TIC sales. Continue Reading

What You Can Buy: Smart Investments for Owner Occupiers

One of the most strategic and desirable investments you can make in San Francisco is to purchase a three- to four-unit property that has one or more units vacant, a garage, and a good neighborhood location. Let’s face it, rents in the city are high, and if your rents reflect today’s market, you’ll be ahead of the game in the long run.

It’s extremely important to be well versed in San Francisco’s rent laws before you consider such a purchase. I’ve been a successful owner-landlord for the past 16 years, and there’s definitely a list of do’s and don’ts to which you’ll want to adhere. You also will want to have a large down payment or you’ll have no cash flow. Here are three properties worth a look, particularly if you’re in this for a long-term hold: Continue Reading

All Deeds Must Record At Same Time for Condo Conversion

As the current crop of TICs converts to condos, I’m seeing many owners listing their TIC interests prior to the actual condo conversion of the entire building. This means the buyer is expected to step in at the tail end of the condo conversion and work with all existing owners as they refinance and everyone completes the conversion process.

In other words, whether there’s a group loan or fractional financing in place, all new condo deeds have to record simultaneously. If there is one owner in the group who doesn’t have a loan, that owner needs to wait until everyone’s refinancing/new purchases are completed prior to obtaining a condo deed. Continue Reading

What You Can Buy: Vacant Two-Unit Buildings

The vacant two-unit building is one of the holy grails of San Francisco real estate. Two different owners can partner and pursue condo conversion, or a buyer looking to live in one unit and rent out the other can also benefit.

There are three such properties on the market right now, in transit-rich locations with plenty of restaurants, cafes and retail in walking distance. Let’s take a look at what’s out there. Continue Reading

All About Location for TIC Sales

All About Location for TIC Sales

Tenancy-in-common (TIC) interests have traditionally been popular with buyers who value a more central location in a desirable neighborhood. Because when it comes to affordability, TICs still will get you more space in a better location than a condo will.

And the neighborhoods in which TICs have sold recently read like a who’s who of hot ‘hoods. Here’s where buyers purchased their TICs from October 2013-February 12, 2014: Continue Reading

SF Overbidders Club: 2-Unit Building Edition

San Francisco’s two-unit building market has been quite busy in 2013. No surprises there, such properties—particularly when they’re completely vacant—are excellent options for buyer partners or those who want to owner occupy one unit and rent out the other.

A total of 303 two-unit buildings have sold citywide, year-to-date. And 29% of them were sold in all-cash transactions. Of the 112 such buildings sold from July-November 12, 2013, 66% were sold for more than the list price, which mirrors the selling pattern for single-family homes and condos in San Francisco. Continue Reading

Park Lane Raises Bar for Luxury TIC Market

Park Lane Raises Bar for Luxury TIC Market

The luxury TIC trend hits a new high with Park Lane at 1100 Sacramento in Nob Hill. About to become the largest and most high-end TIC project in San Francisco, 1100 Sacramento is positioned to be the mother of luxury TICs.

Tenancies-in-common (TICs) have traditionally been purchased by buyers who couldn’t afford condos, and who would assume the risk of sharing a mortgage and title so they could become home owners, preferably in desirable and popular San Francisco neighborhoods. Continue Reading

Condo Lottery Legislation Passes, High-End TICs Abound

The Board of Supervisors approved the controversial condo conversion lottery bypass this week, for better or for worse. Depending on whether you’re a homeowner or renter, you’ll be happy with the outcome.

Despite the shaky ground upon which some TICs stand, luxury TICs are out there and buyers are snapping them up. We take a look at a trio of high-end TICs that are worth considering.

It’s all here in this edition of the Zephyr MarketTracker!

What You Can Buy: Two-Unit Buildings

Two-unit buildings in San Francisco that are eligible for one or two owner occupiers are one of the most desirable multi-unit property types in San Francisco. Two buyers interested in partnering up and living in both units while they pursue a fast-track condo conversion are great prospects for such a building, as is an owner occupier who wants to reside in one unit and rent out the other. (The latter doesn’t allow that owner to circumvent the condo lottery, but it can be an excellent way to afford a home that you otherwise may not have been able to purchase without factoring in rental income.) Continue Reading

TIC Owners Await Condo Conversion Legislation Outcome

I’ve been contacted recently by many TIC owners, inquiring about my thoughts on what the legislation will mean for resale value related to their individual situations—which can vary widely. Some have been in the condo lottery for many years, others have rented out their TIC interest, and others have recently purchased an interest in a three-unit building but haven’t even entered the lottery yet.

The condo conversion legislation was initially introduced last year by Supervisors Scott Wiener and Mark Farrell. In response, tenants’ rights supporters voiced their opinions, which has led to Supervisors David Chiu and Norman Yee recently proposing several amendments designed to help reach a compromise. Continue Reading

Yours Truly, Quoted on KQED About TIC Legislation

The San Francisco Board of Supervisors Land Use and Economic Development Committee was scheduled to vote today on legislation that will potentially allow some TIC homeowners to bypass the condo lottery and pay a one-time fee to complete their unit’s conversion. As is typical with any legislation that affects homeowners and tenants, the issue is controversial.

And the vote has been delayed by a month, as Supervisor Mark Farrell reportedly wants additional time to talk with tenants’ rights groups.

I am, of course, a homeownership advocate (and former renter). And there are two sides to every issue. But I’m thinking that there’s something to this TIC legislation that should be able to work. In a city where two-thirds of all residents are renters—and property taxes help subsidize many things here—the Board of Supervisors should take a balanced view of the condo conversion issue and update its position so we don’t have a bunch of homeowners languishing in the lottery.

Check out the story (with link to the original audio broadcast) here: “San Francisco Struggles With Decision That Could Help Some Homeowners—And Hurt Renters.”

Buyer Goes Bonkers Over Mission Dolores Units

Buyer Goes Bonkers Over Mission Dolores Units

Proving that Mission/Mission Dolores homeowners basically can’t miss in our market these days, the modest two-unit building at 3643-3645 19th Street (at Dolores) sold for what I would describe as a stunning price recently.

The main-level flat (living room, above) was vacant and unstaged. There were two bedrooms, an updated, eat-in kitchen with basic finishes, and a dining room. Downstairs was a very small, tenant-occupied studio with a sleeping alcove.

Listed at $1,225,000, the building sold to an all-cash buyer from the neighborhood for $1,510,000.

Unfortunately for a majority of buyers, it’s a challenge to compete with cash buyers who are not wildly concerned about the prices they’re paying. After all, when a loan isn’t involved, neither is an appraisal. My guess is that a formal appraisal would not have come in at value on this building, knowing the comps. But this isn’t the first instance of buyers paying too much for Mission Dolores properties; this sort of reckless real estate behavior has been happening since early 2012.

Buyers Turn to TICs in Tight Market

As condo prices climb and low inventory persists in centrally located neighborhoods, San Francisco buyers appear to be more willing to take on TICs.

A total of 66 TIC interests sold in the last quarter of 2011, at an average price of $594,127. However, buyers snapped up 94 TICs in Q4 2012, and the average price shot up by about 9% to $645,091.

In a city where the average condo price is almost $1M, TICs still represent a more affordable path to home ownership—particularly where 2BR units are concerned. Almost half of the TICs sold in the last quarter of 2012 were 2BRs, with 1BR TICs representing 32% of the total sold. The least popular TIC type was the 3BR+ unit; only 22% of buyers purchased those. Continue Reading

Contact Eileen for Real Estate Help

Eileen Bermingham

Corcoran Global Living

415.823.4656

eileen@insidesfre.com

DRE# 01352627

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