A recent inquiry from one of my clients:

Hi V,

This one is interesting.  I just spoke with the list agent who does these types of auctions in southern cal.  This is not an REO (Real Estate Owned) or short sale.

There will only be 2 showings for the property prior to auction.  The $300K is the suggested starting bid price.  The buyer can have no contingencies when they do bidding meaning all inspections need to be done up front.  No loan contingency either which I think is very risky since we are dealing with challenging lender issues & if there are any issues with getting a loan than a buyer risks losing their initial deposit (which will be at least $5000 for this property).

It sounds like there are also HOA issues.  The entire board was just unseated due to fraud issues.  They also have a special assessment coming through but the amount is unknown.  The current HOA is very high!!  $525/mo

If I didn’t mention, with condo buyers as part of their contingency period, I recommend that they hire Jacquie Berry for HOA analysis.

It’s really important that the financials/reserves are analyzed in order to determine likelihood of future assessments and if there are any other red flags.

Typically this service along with a contractor’s inspection & possible pest will run about a $700-1000 which a buyer pays for.

This type of purchase is probably better for an all cash buyer.  List agent also mentioned that most buyers don’t get inspections!!  This is really risky and not what I’d recommend unless a buyer was a contractor.

Last detail per the website: A BUYERS PREMIUM OF 4% WILL BE CHARGED TO THE BUYER AS A CLOSING COST, DUE AND PAYABLE AT CLOSE OF ESCROW. THIS FEE IS PAID DIRECTLY TO US AUCTION ADVANTAGE AND IS NOT INCLUDED IN THE PURCHASE PRICE.

Let me know if there’s still interest and I’ll request the available disclosures.

It's that time of the year again when gutters need to be cleaned prior to rainy season. We just had a great product installed in portions of our gutters which prevents gutters from clogging.

There is an incredibly large, messy redwood tree which litters needles and branches several times a year. It's just a matter of time before the gutters & downspouts end up getting clogged with tree debris, problematic when our rainy season starts.

RainFlow will help to keep our gutters & downspouts clear, since the debris sits on top of the membrane which can then be blown off when we have our semi-annual gutter cleaning. Another plus, is that since the gutters are easier to clean, our twice a year service will now be less expensive!

Let me know if you'd like a recommendation to the installer & gutter cleaner that I work with. He did an excellent job, is reasonably priced & made a great recommendation to use this product in portions of our high debris gutter areas!

In this photo the RainFlow product starts to the right and you can see it's already working!

In my constant quest to be eco-friendly both personally and professionally, I've been implementing a few environmentally friendly business practices.

Currently, I’m in the process of reducing the number of direct marketing pieces to a quarterly schedule, instead staying in touch monthly with friends and clients via email newsletters. 

I've also successfully been working with electronic systems for about 2 years, creating a paperless transaction for clients who are buying or selling real estate.  The response has been overwhelmingly positive from clients who appreciate being able to review documents online as well as securely sign the dozens of disclosures and reports electronically. 

Gone are the days of having to kill a forest to buy or sell a home.  It is technology which hopefully more of the real estate industry will embrace, especially considering that a typical transaction consumes 250-300 sheets of paper and can top 600 sheets with condo transactions.  Additionally, the quality of electronic files is far superior to hard copies which lose print detail with each printing and faxing.

Clients, at their leisure, can go online to review & sign reports and disclosures.  With their busy schedules of juggling work & family, they appreciate the convenience & efficiency of an electronic system.  Clients also receive all their transaction paperwork on a CD rather than a hard copy; a format which is more convenient to store then a two to three inch paper file as well as it being easier to locate specific documents on disk.  Clients also appreciate being able to contribute to being eco-friendly.

Title companies and lenders are also slowly moving towards the paperless transaction.

At the conclusion of a transaction, I also purchase carbon credits to further offset my carbon footprint.

If you’d like to learn more about paperless transactions, give me a call!

Image: FreeDigitalPhotos.net

I just signed a one year lease for my 3-bedroom rental at $3000/mo including a garage! 

The rent is finally back to the previous high when the last rental peak occurred during the dot.com heyday.  It took some time to rent (about 3 weeks), since I started out high at $3400/mo and made a couple of reductions. 

It’s a balancing act of getting top market rent and a top applicant within a reasonable period of time.  Since there’s no hard science to setting market rents, it’s easier to start out on the high side & get a sense of interest and make a reduction after a couple of showings if needed. 

Due to S.F. rent control, you have one chance to get top market rate for a rental.  Once that unit becomes occupied & if it stays occupied for several years, it’s typical to have your building expenses rise at a much quicker pace than the minute allowable S.F. rent increases which don’t keep up with inflation or building expenses.

Our 3-bedroom has always been the challenging unit to rent in my 10+ years of owning this multi-unit building.  It typically draws the roommate crowd which can bring inherent management challenges if the roommates aren’t the right mix.  It also doesn’t have a second bathroom which is a negative for many.  We’ve even considered splitting the unit into two smaller units. 

Based on prior experience, the ideal rentals to have are 1 to 2 bedroom units.  They typically bring in a higher price per square foot & there are more renters who can afford a 1-2 bedroom vs. a pricier 3-bedroom.  Since there is greater demand, these units tend to rent very quickly, even in a normal rental market.

My 1-bedrooms have almost always moved fairly quickly (within a week of hitting Craigslist) in my history of owning this property. 

I also recently rented a 1 bedroom for a client at $2000/mo with no parking included.  There was solid interest with about 10 groups through at the first showing. 

I failed to mention that both rentals are pet-friendly which tends to bring in more applicants since our S.F. pet friendly inventory is so low.  I’ll go into more detail in a future post about marketing to renters with pets.  This is a great niche market you may want to consider if you’re having trouble moving a rental.  There are specific guidelines to follow to ensure a successful residency with tenant’s who own pets.  I’m happy to share my systems if interested.

In addition to a strong rental market & being pet friendly, location of the rental property is also key.  These properties are on the Glen Park border, a neighborhood with excellent restaurants, close proximity to freeways 101/280, close in to City College of S.F. & S.F. State, walking distance to Glen Park BART, and just a few minutes south of Noe Valley.  This neighborhood is in demand and a slightly less expensive Noe Valley alternative.

If you’re considering investing in S.F.  rental property, I’m happy to be a resource. Even with the challenges associated with rent control, there are great opportunities with our rental properties. 

S.F. has a steady draw.  In my 10+ years of renting my units, I’ve seen a steady influx of people relocating from other parts of the country.   I’ve also noticed a tremendous number of techies who want to live in S.F. even though they have to make the long commute to Silicon Valley.  S.F. is a world class city & consistently is in demand!!

Until next time!