Fred, Other/Just Looking in San Francisco, CA

What's the best advice for selling a 5 unit property? Are some agents better suited for selling these than?

Asked by Fred, San Francisco, CA Wed Dec 26, 2007

residential properties? Any timing advice for selling such a property?

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The interest rate is usually much higher for a five unit building than it is for a four unit building. It is ratcheted up to a "commercial' loan instead of a residential loan. This triggers a higher down payment requirement as well. The interest rate and down payment differentials are less pronounced in SF than they are in my Sacramento metro area because most of SF is above the conventional loan limit threshold anyway.

When financing is less attractive for buyers, there is relatively less added value for that fifth unit. - in most areas.. San Francisco seems to be an exception to that generalization.


You could ask your agent in San Francisco to do a more specific analysis than my analysis on SFAR of 100 sold 4 plexes in the past year gave a median of $1,350,000 and an average of $1,411,681 or $337,500 to $352,920 per door. 22 five plexes reported sold on SFAR in the past year averaged $1,677,773 with a median of $1,600,000 or $320,000 per door to $335,555 per door.

A quick survey of the Sacramento MLS shows an average sale price in the past 18 months of 84 four- plexes at $523,000 ($140,750 per door)

The average for five plexes was 601,500 ($120,100 per door)

Another way of looking at it is that the fifth units added an average of only $78,500 to the value of their respective properties in my metro area.



advice? financing is a consideration for prospective investor-buyers; a seller could maybe sometimes benefit by offering some seller financing?
0 votes Thank Flag Link Wed Dec 26, 2007
Jim Walker, Real Estate Pro in Carmichael, CA
MVP'08
Contact
I'd recommend Grace Mgrdechian (mee-gree-dee-chi-an) here in the City her number is 415.336.3510; talk to three agents or so and see who you feel comfortable with and let them present their services and earn your business!
Web Reference: http://www.megareteam.com/
0 votes Thank Flag Link Wed Dec 26, 2007
Hi Fred,
I have a client who will be looking for a multi-unit building (4-6 units), most likely in the Spring to coincide with a 1031. I would concur with Jed that you'd want to use a San Francisco agent due to our wonderfully wacky rent control constraints and because we have a very specific pool of buyers interested in the City. No one can really time a market, I certainly saw a lot of 1031 monies needing a place to land even during the holiday season. Let us all know when it comes up on the market!
Cheers,
Melanie
0 votes Thank Flag Link Wed Dec 26, 2007
Hi Fred, You should go with a commercial agent. Marcus & Millichap is a great company that does alot of apartments, but you will pay for it. If I can help you let me know.
0 votes Thank Flag Link Wed Dec 26, 2007
Wanted to add to my earlier response. You need a San Francisco agent. Someone that is familiar with our rent control laws and you tenants rights.
0 votes Thank Flag Link Wed Dec 26, 2007
Jed Lane, Real Estate Pro in San Francisco, CA
MVP'08
Contact
Hi Fred, Darling pup! 1-4 units is considered residential while 5+ is considered commercial. You can find a residential agent who is experienced in selling commercial property or you can find a strictly commercial agent. I think it depends on who the buyer is for the property. If it's likely to be an owner live in situation, I might look for a residential agent..just because the marketing is different.
0 votes Thank Flag Link Wed Dec 26, 2007
Yes you should use an agent that is knowledgable and also known in that market. Most Realtors work in 1 to 4 unit buildings.
I would recommend Mike Marek. He cna be reached at (415) 846-4232 or by e-mail at Mike.Marek@STAR_SF.com
He knows that market and is an investor himself so he can walk you through the entire transcaction and also provide advise on an uplink if you would like.
He would also be able to recommend some one to power wash the building.
0 votes Thank Flag Link Wed Dec 26, 2007
Jed Lane, Real Estate Pro in San Francisco, CA
MVP'08
Contact
I suggest using an agent who specializes in multi-unit sales. There are intricacies to be aware of in this type of sale that are not typically a part of a single family residence sale.

An agent that I would recommend is Larry Mueller. He is a nationally recognized agent specializing in multi-unit property sales. 650.356.3716.
0 votes Thank Flag Link Wed Dec 26, 2007
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