Your experience with "protected tenants" of San Francisco

[Diane G.]

I am looking at MFH opportunity in San Francisco... everything looks great except for the fact that there are 2 protected tenants in the building... Both moved in back in 1970s, so they are probably in their 70s of age now...

Now, I understand that these tenants are "untouchable" in San Francisco, and your only hope is to wait until their pass (sorry to say that).. Given that, I love to hear from you if you had any experience in this space, and what is your recommendation... Thank you

[Frank Chin]

Yes, they have rent controlled tenants here in NYC, and our family invested in San Francisco as well, got a 3 family with a "protected tenant", and there's nothing we could do. The only thing was, got a break from the seller when on purchase, prices went up like crazy, so after 15 years, 1031 the property into another.

Talking about tenants in their 70's, I looked at a property here some years back, rent controlled, tenant is paying $98.00/month on a unit where the market rent was $800.00, and the tenant at the time was 90. Seller told me he bought the building 10 years back from a seller who also had it for 10 years. So 20 years before, when the tenant was 70, some guy bought it, expecting the tenant will drop dead soon, not such luck, sold it to the next guy who had it for 10 years, and  then he got tired of waiting as well. So I told the seller, I got a bad vibe from this, sounds like this lady is going to live to a hundred, and rent control laws, as well as laws protecting tenants over 62 here in NYC make it impossible to get rid of her. At $98.00/month rent, would you move?