All Forum Posts by: Dan Redmond

I have never been involved in a live/work rental but many were built around my neighborhood several decades ago. There were issues with them at the time. Most, if my vague memories are accurate, were built on commercially zoned property and actually required to be rented to a business. I would do much more research, including checking your deed. Good luck

Michael, Refuse all you want, you are still 5 + years late to the game in the Bay Area. Better returns are to be had elsewhere. I have been in SF longer than the Giants ('58), just so you know, and I am now selling and moving out. Never buy high. Good luck. 

There are a number of legal issues hiring handymen. Just be aware. If you are still going that direction get to know your neighbors and see if they have any prior experience and recs. Stay away from Craigslist unless many references exist. 

Here are several places that will get you started with leases; SFAA, San Francisco Apartment Association, believe they have sample leases for sale (fairly cheap), San Francisco Rent Board, tenant based but helpful to small landlords, they handle the actual laws, so a good place to be aware of, and Small Property Owners Institute. The one personal advice I could give, not sure if legal, but then strongly suggest, require tenants to have renters insurance. We recently had a tenant caused fire and the follow up would have been better if we had done this in advance. Good luck.

Forget SFAA now. None of their information is legally binding and when furnished, is only to direct to other sources. Was a member years ago, once we had a problem truly discovered the waste, and it was only a hun/year then. While I have been involved in multi-unit ownership for nearly 2 decades, single family is a different bird. Apply your money to solid legal knowledge here is SF. We use Andrew Zacks, do a websearch. Actually going to call him myself tomorrow. It never ends here.

Dan Redmond

Katrina, Congrats, sounds like you got your place. My penny and half says using your cousin may work, but definitely get a local in some position that has been through this before, the more local to your new hood the better, definitely someone with verifiable success in a very similar project in San Francisco. While I currently know no such person,  there may be several ways forward. 

First possibility, just drive around your new hood during working hours and seen what is happening where and ask some questions of both on site workers or of any names that appear on attached signs.

Secondly, either on SF Planning or BDI (dept of building inspection) websites there is a listing of recent  permits,  I believe both open and completed, what the scope is, who is involved, etc.  This may give good info. 

Good luck and Cheers,

Dan

Hi Katrina,

Yeah, it was. We have owned the property for actually over 18 years and resided here. A good run for the buy and hold concept. We are about to find out just how well our little nest egg has done as we are going to put it on the market soon. We had another stressful situation over the holidays, a fire. We are of the age where we just do not want to go through the rebuilding process and so it is just time to move on and give others the opportunity to build their dream. 

Yes I have some direct experience here in SF. This story will cover the extremes that a story of this kind may go to. Had to get two sets of tenants out for serious capital improvements issues, life and safety issues. The totality will give you a good idea of how things may go. While I am aware of both easier and harder (money wise) stories, I will stick to ours. Also this was nearly 10 years ago, during the downturn. Easier process then, rents were were cheaper and alternative apartments were much more available.  

One set, a couple, who we got along we well enough, basically became a typical buyout situation. The buyout cost 28K for 2 tenants. Both sides still had attorneys. 

The other set, actually a single tenant, sued 7 business days later, with the help of a tenant's rights organization, for 500K for wrongful eviction. Serious stress beginning. While we already had attorneys and rock solid insurance, it was still an ordeal. The suit went basically away, with relatively small pay outs, the tenant still extracted more money for the buyout. 

Total cost for all the process, 105K. Beware.

As a long time SF resident and owner of 4 units, here are my thoughts. I would learn more about condo conversions and tics. Maybe speak with a real estate attorney to get up to speed on known issues ( I already rec Andrew Zacks once today, I should start getting a referral fee). You already know the negatives with low cash flow properties and you may even be overly optimistic re tenant turnover. Capital improvements passthroughs have a ceiling as to allowable rent increases per year, tough on your IRR. Since you seem interested in improving properties, the one idea not mentioned, is finding a property that will delivered totally vacant, but beat up. They are out there and you will pay some premium over other occupied properties because of all the tenant issues but will save you much hassle.

Pro landlord attorney, sorry about that.