All Forum Posts by: Elizabeth O.

Hi! Is the property in San Francisco? If so, once the tenants have been living in the property for 30 days, they have full tenant's rights, same as someone with a year lease, which means either way you can't ask them to leave. In both cases, non-payment of rent would normally be a "just cause" for eviction (https://sftu.org/justcauses/) but since CA isn't allowing eviction for non-payment through Feb 2021 (https://www.gov.ca.gov/2020/08...) you would just have to find another way to pay your mortgage. I might consider advertising it both ways - you want to be able to pick from several applications rather than turning down an application and risk having a housing discrimination complaint filed against you (https://sf-hrc.org/how-file-di...).

Hi @Casey Burns,

About a year ago I was looking to buy a 2-4 unit in Berkeley or Oakland so my SF realtor referred me to Zanna Knight as someone knowledgeable about the East Bay. She helped me make a couple of offers but I was having trouble finding good enough returns, so I ended up flipping in SF again. I'll definitely go back to her once I free up some cash because I'd like to own an East Bay multi-unit.

Have you read about the rent control laws in Berkeley and Oakland? If I were going to owner occupy in Berkeley, I'd look for a "Golden Duplex" since they're exempt from rent control. Of course that will make it more expensive, but it's something to consider.

Originally posted by @David Kyo:

Being new and in the area I'd love to hear how you found it and the numbers if you're willing to share.

 Hi David,

We found it on the MLS. It's a fixer that was asking $650K. There were 30+ disclosures out and 20 offers - mostly developers. We offered $850K cash with no contingencies and were chosen with no counter offer. We sold a smaller house a few blocks away about 3 months ago for almost $1.3M, so we believe it's a good deal.

Thank you for the replies! It sounds easy enough if we want to ask for the change. The psychology of the deal is still touchy. The trustees were having trouble agreeing on an offer but apparently they liked my family. I'm not sure what was said off the record about our intentions to live in the house, so my request to change to a partnership LLC needs to be worded carefully.

Thanks!

Hi folks,

I'm in contract to buy a house in San Francisco for cash and closing will be in about 3 weeks. After the offer was accepted by the seller, we found a partner who is interested in purchasing the property with us. He wants to form an LLC and purchase the property with it. Is this possible since the seller accepted a contract from me, not the LLC? If we try to make the switch before closing, how much would the seller be involved? She chose us out of 20 offers, and I don't want to mess up the deal. Would the seller have to sign a new purchase agreement? If we transfer ownership to the LLC after purchase, we'd have to pay transfer tax. Is that the safest option to avoid losing the contract?

Thank you for your advice!

@Amit M. I agree that the ready-to-assemble wood cabinets from the Chinese vendors do tend to have quite a bit of grain and color variation, but I'm amazed at the price for solid wood with plywood boxes. I also just finished a kitchen from Ikea, and during my hours waiting in line there found that many of the other people were buying for their rental houses. I don't imagine the particle board boxes would hold up to renters, but the cabinets do look good. Other places I've shopped for cheap cabinets are Liberty Home Supply (on Caesar Chavez) and Discount Builder's Supply (by DBI), but I can't remember how good the natural maple looked - I was looking for natural cherry at the time. Thank you for the L&T recommendation - will check them out!

@Amit M. The white shaker kitchen in the picture was for sale, not a rental. The cabinet designer I used said that white shaker is the most popular cabinet he sells in SF, and I only had to take care of it for a few months, so I wasn't concerned about dings. I'm pretty sure the maple would absorb abuse better. Even though it's not as hip, I think the light maple with a light gray quartz counter would look good if you put modern hardware on it. Attaching an example that I think would work.

Also, have you checked out the quartz counter slabs they sell at East Star building supply? I just got a quartz counter from there for $218! If your contractor can cut stone counters, it's worth considering. I chose one of the lighter ones, but they have lots of colors.

I want to warn against using white quartz countertops. I just installed some Caesarstone Blizzard (almost pure white) and it stains with tomato sauce or wine. In a previous kitchen this spring we put a light gray mottled quartz (Cambria Waverton) which was much better about not showing stains. It was paired with white painted shaker cabinets and our realtor said it was very popular with the SF crowd. Many comments about the kitchen being light and pleasant.

Hi @Amit M. ,

The architect gave me a free 1 hour consultation - nice! Before she came out, she previewed the DBI screening form, then inspected the unit and gave me a verbal list of what her best guess would be required to permit the unit. She told me that she'd charge $115 / hour to draw up the existing plans and proposed plans and fill out the screening form. I think she estimated it would take her less than 8 hours to complete all that. The unit is 1 bedroom plus office.

She said she could call DBI and try to find out how stringent they are going to be in enforcing code before we turn in the screening form. It's possible they would let us get away with height violations on the existing stairway to the backyard which is outside the unit, but she didn't think they would be flexible on things like one hour firewall.

We did not ask her to proceed or ask the contractor to estimate the cost of the changes (blowing in insulation in walls and ceilings between units, moving bedroom doorways for height limitations during egress, upgrading the laundry ventilation to stove ventilation, increasing the size of the front door by at least 2 inches, drywalling the entrance hall which has exposed brick and beams). 

The house has already been empty for 2 months while we were fixing it up after the previous tenants. We only bought it last year, so our mortgage is pretty expensive. Since we don't know how long the legalization process will take, we would need to go ahead and rent out the top half to help cover the expenses. If we then find out that the in-law can't be permitted without some expensive construction, we can't back out of the process and still cover the mortgage, since we aren't willing to rent out the lower unit illegally. The only way we see to lower our risk is to move in ourselves and rent out our own house until the process becomes more clear. If we were already living in the house, I'd proceed, because I would prefer to have a 2 unit to retire in. Instead we're handing it over to our realtor to see what he can get for it rather than deal with moving right now (I have 3 kids, so it's a pain to move).

@Amit M.  I have a report on my attempt to legalize my in-law. I contacted several contractors before I found someone who wanted to work on the project. He referred me to an architect to work on the screening form, floor plans and site plan - Suzanne at sujodesign.com

She came out and looked at the property and made a list of things she thought we could be asked to change:

- Blowing in more insulation - she said that there are different requirements for separation of units than for bedrooms added to the living space of a SFR, so we wouldn't know without opening the drywall and ceilings whether it is appropriate for a separate unit.

- Ceiling height - there is a bedroom that doesn't have a high enough ceiling at the entrance to the bedroom. This is a bedroom permitted in 2006, so we don't understand how it passed inspection. She suggested pushing back the doorway 3 feet. 

- Stove venting - the kitchen area was originally permitted as a laundry area, and it's unclear whether the laundry venting being used as stove exhaust meets code. The vent disappears into the ceiling, and we can't see what happens after that.

- Exit doors - the front door to the in-law is only 30" wide, so it may need to be widened.

As a result of all this possible work, we changed our minds and are going to try to sell it without legalizing. We tore out the old kitchenette and are replacing it with a minimal wet bar type sink to cover up the plumbing.

One piece of advice - if you need to get plans from DBI to show existing floor plans or to demonstrate that the unit was there before 2014, go at least 30 days before you need it. The design engineer whose name was on the plans for our house has not answered the request from DBI to reprint the plans. DBI said that if they don't answer, then after 30 days, they'll consider permission given and print the plans.