All Forum Posts by: Kris Lai

@Brian Larson How was your experience with Alliant CU? Which HELOC product did you end up choosing? Similar to @Elizabeth Rose I'm looking to tap into my equity on my primary residence here in the Bay Area in hopes to fund my next purchase. I've got quite a bit in equity but it seems Alliant charges $1000 for lines above $250k and I'm hoping to max at 80-90% - wayyy above the $250k mark. Silly me didn't take cash out when i refi'd in 2020 at 2.75% - regretting my decision big time.

I definitely recommend calling the Assessor's office in the county of the property - to get the precise answers. But from what I know: 

1. It's likely the death was never reported to the county back in 2003.  So technically no one is aware that one of the owners is deceased and therefore their name still appeared on the deed in 2013.

2. The new ownership depends on how the title is vested (i.e., tenants-in-common, joint tenancy, etc). If JT, the other remaining joint tenants inherit the deceased tenant's interest in the property. If TIC, the shares go to whomever are his/her beneficiaries.

3. The only way to receive full 100% ownership is for the remaining owner and possibly the deceased owner's beneficiaries to deed their shares to your friend.

Ultimately paying all the taxes doesn't constitute full ownership. The first thing that needs to happen is reporting the death by filing the appropriate paperwork to the county. Know that there's a possibility for the property to be reassessed; if so, you and the remaining owner(s) will have to pay back property taxes for the years going back, but no more than 7 years. 

Yes, sorry let me clarify. I meant to say paying more than $800k in the good parts of SF/Peninsula would eat up your equity. But I just re read your post and it said the property is too far to be a primary ... Whereabouts is it? I would be cautious and think a few years ahead ... will this city's growth/jobs continue to rise (i.e., SF, Oakland, SJ) or could there possibly be a bubble that brings value way down. Regardless, getting a seller financing deal is a coup. 

These are my two cents .... If the 2/1 property is in the SF/Peninsula area, then you really can't go wrong with that deal. I'm assuming it's in your price range and the terms are favorable with your extended family. Unless the price is ridiculous (I'm thinking under $800k in a decent area), you will build equity fast (not to mention not needing to qualify thru conventional loans AND avoiding the bidding process AND obscene rent rates). The other scenarios you mentioned are good options as well but you have a great opportunity to get into a Bay Area property without much hassle with plenty of upsides. Worst case scenario is you get into this deal and later decide you want out; instant equity/cash to buy elsewhere and/or rent/airbnb out your property in this market. 

@Amit M. thanks for the advice. I calculated he right price for a pure investor would be in the $1.2m range after expenses. Each of the parking spots are deeded to each tenant. One is currently using the space as a workout gym!

The idea of seller financing would be the seller avoiding a huge capital gains hit whereby she would only pay ordinary income on the installments since there is no principle involved until I make the balloon payment, or if she decides to sell the note. 

There's no doubt it will be purchased by a techie that loves Bernal. Personally I think it's too foggy at times and prefer Noe Valley for the same price. 

Thank you to everyone with their insights. I've decided to pass on this one and seek other opportunities. I should have another pocket listing coming to me located in the Castro. Hopefully it will be a different rent control situation. 

@Johnson H. PM Me if you are interested. I'll pass the agents name and number to you. He may have already listed it on MLS today though.

What price would you lowball the offer at @Leo B.?

@Johnson H. yes it's in the heart of Bernal right off the most desirable part of Cortland. However  my cash reserves are not flushed at the moment. 

I do agree with @Leslie Pappas that this particular tenant isn't going anywhere anytime soon. 

With that said I'm really liking the fact this seems to be a solid building with only cosmetic needs in a great area. 

If I make an offer, would it be beneficial to use the selling agent to represent me as well (financially and/or otherwise)? And if my offer is accepted, how can one back out within the due diligence time frame (forgive the question; it's been a while since I've made an offer on properties). Thanks again to everyone!

Thanks @Account Closed! Rent control in SF is a nightmare even with the Ellis Act rule. It's not cheap to remove a tenant even if you're in the right.  I'm told both tenants have had their max allowance on increase. The lower unit was paying only $900 and hadn't had a increase in over ten years. The seller finally raised it to the max just last year. 

My mentor is suggesting I offer full price on the condition that the seller finances 100% with interest-only payments at 4% for 10 years (based on a 30 year loan). I calculate I would only break even ($7000 estimated rent - mortgage, taxes and insurance). This doesn't factor in vacancies or repairs. The upside is the potential increase, should those two tenants move out (potentially $3500 x 3 units) and increase in property value. 

The building seems to be in very solid shape - outdated and small but in a highly desirable area (think tech/Google bus route). 

Thanks for the suggestion so far. Can I enlist a Bay Area local that might have some insight

@J. Martin, @minh le, @johnson h or anyone else knowledgeable on SF RE. 

I have until this evening to respond to the seller. Thank you!