All Forum Posts by: Lawrence Leung

@Roz Enfield, I think there was a slight nuance that @Brian Garlington missed.

You mentioned a 3rd roommate which was not moving out which means the property is not entirely vacant and you may not be able bring rent up to market unless 1) the 3rd roommate was never on the original lease and 2) you never created a tenancy relationship with this 3rd roommate.  If the former two items are true then you could possibly issue a costa hawkins rent increase to bring it up to market. Please keep in mind to do the necessary due diligence to ensure you give proper notice and you are exempt from any current Covid-19 rental increase moratoriums as well as active emergency price gouging laws.

Regarding your other question...

1 & 2) Regardless of San Francisco's Tenant friendly nature, a Tenant is contractually responsible for the lease term. Assuming you have a lease that has boiler plate language you should not need to create another agreement as the lease agreement already indicates that the tenants are jointly and severally liable for all terms and conditions most key of which is payment of rent. It doesn't matter if they want to move, they are under contract until the end date or until you find a replacement tenant in good faith. If they still choose to move the last remaining tenant (assuming his name is on the lease) is also responsible and you can always take them all to small claims court for any unpaid rent.

On a side note. I noticed you said your SFR was not under rent control. Keep in mind that COO is no longer the sole criteria for determining your exemption from rent control. How you own your property also plays a role and there are situations where a newly constructed SFR in San Francisco is subject to rent control.

@Hari Narayanan, It's not so much the state law (although there are requirements that exist), but you should seek out your local planning department. Search the city and planning department in google and call that phone number and speak to someone on the phone.

I think there is a dichotomy between the responses provided by those familiar with San Francisco and those that are not familiar with the San Francisco rental market.  Everything that @Mike McCarthy, @Carmichael Lewis, @Aigo Pyles is absolutely right in that the bathroom does look fine and is at least not the vintage 60s and 70s pink tile that you can sometimes find in San Francisco. Not doing anything would probably work in the the suburbs or the outer lying districts of the City like the Bayview, Vistacion Valley, Hunter's Point, but I'm guessing that @Tyler Zanini lives in a nicer neighborhood of San Francisco where it really does matter how the bathroom looks because prospective Tenants searching in these neighborhoods have a more discerning taste when finding their next home because they can not only afford to, but will also pay a higher rent for it.

@Amit M. I was totally thinking East Star as well. HAHA

@Tyler Zanini, You didn't show the tub/shower, so I assume that looks pretty good. I think it would be good to differentiate yourself from your competition and get a higher rent price or at the very least make your place easier to rent.  Since you are already doing a kitchen remodel, adding in some work for the bathroom (finishes only) would be a minor incremental cost from your contractor as boots are already onsite. See if you can squeeze in a modern dual vanity with rectangular under mount sinks that will match your existing tile and wainscot.

Completely agree with you on Multifamily. Can't say the same for the condo rental market in San Francisco.

With that said, the amazing thing about San Francisco, in one of the highest cost living areas of the country, is that it continues to buck the trend with surveys showing a rent payment of over 95% which is far higher than the national average of between 80-85%. A part of me believes there is a direct correlation between the good and friendly nature of people in the San Francisco Bay Area and their willingness to pay rent even in these difficult times.

@Tyler Zanini Congrats on scaling up and making the decision to keep your existing property and turn it in to a rental for investment purposes. To coin a phrase by Matt Theriault, get rich by buying Real Estate, but become wealthy buy holding it.

@JD Martin hit the nail on the head and it really "depends" on how the "outdated and ugly" look compares to your competition. If all other 2BR/1BA in your neighborhood are all remodeled, then you may want to remodel unless you are satisfied with a slightly lower market rate rent and a higher vacancy rate. Conversely, if all other comparable properties have dated bathrooms like yours, you can make yours stand out and attract top dollar with a nice remodel and a lower vacancy rate. We will always recommend the bathroom remodel telling our clients that a below average property will attract a below average tenant while an above average property (i.e. updated bathroom, kitchen and finishes) will attract not only an above average tenant, but a tenant who will take care of your place.

Btw, you mention selling in the future. I would recommend seeing if you can align your exit strategy with that special 3 year window where you can take advantage of both IRC 121 and 1031. This assumes that your capital gains would exceed the 121 $500k exemption.

@Justin Thorpe having the option to work from home and actually working from home are two different things. If SIP has taught us anything, it is that, it is human nature to want to collaborate and socially interact with others. Many people will work from home if they have that option, but only some of the time. IMHO I think the vast majority of people would want to go into an office for those team environments.

@Diane G. SOMA, East Cut, Yerba Buena, China Basin and Mission Bay condos are my fear at the moment based on your comment above and with the increasing layoffs that are taking place this week across the Gigeconomy including, but not limited to Lyft, Uber, Airbnb the inventory is going to only increase further.  My biggest fear is how many ppl are going to walk away from lease obligations as the job market has completely dried up. 

We have two condos vacant and the competition is fierce. We do a thorough job looking at comparable units to price our vacancies, but will decrease the price $100/week until we see a sweet spot with inquiries. Based on this, our decreases are in line with what @Amit M. is seeing with single digits up to at most 10%.

@Tob Siripak I think you need to share what your strategy is for your property and better advice can be provided. For example OMI is relevant with respect to the tenancy you are displacing should you want to entertain a condo conversion strategy in the future. Buyouts, while more expensive, are usually the more ideal option because it leaves your title clean.

@Matt K. it’s funny that you mention scams on Craigslist. I know they’ve always been around, but I have noticed an uptick since Covid-19. I don’t have the time to look for these myself, so how I monitor things is based on inquiries that I receive for properties we don’t manage but our name and reputation are attached to these listings that are quite frankly “too good to be true.”  Thankfully most of the folks that brought this to my attention were savvy enough to Google me or our company to verify. I’m worried for the other folks that may have actually placed a deposit down site unseen. I have been tempted withWith law enforcement to call these listings, but perhaps for another time...