Home Buying in 94005>Question Details

Lili Peck, Other/Just Looking in 94005

Has anyone bought and sold a BMR in San Mateo County? Good or bad experience? Loose money or make a little?

Asked by Lili Peck, 94005 Sun Feb 22, 2009

My broker says BMRs are a bad idea because you could actually lose money at resale after you pay realtor fees. Unfortunately, I don't really make enough to afford a decent market rate place. Any recommendations?

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4
Joel Diaz’s answer
Yes, it doesn't always work. You have to be careful.

I recommend buying in a regular development where only about 10% of the units are BMR. These retain their value better. And you have to figure on buying and holding for the long term. If you buy high and sell in a down turn, that's a recipe for disaster and is unfortunately happening to a lot of people.

Short anecdote: My client purchased a luxury BMR condo in a luxury condo development and is very happy. His wife's health issues prevented her from going up and down the stairs at their old apartment; she couldn't hardly walk and couldn't leave the apartment. Their new place has an elevator. It has transformed their lives. She is now coming and going and even starting to walk again.
0 votes Thank Flag Link Thu Jan 21, 2010
iT WAS A HEAD ACHE, BUT AFTER ALL SAID AND DONE-- I'M HAPPY TO SAY HOW WONDERFUL THIS PLAN IS. I AM VERY THANKFUL FOR THE PROGRAM. IT'S JUST TOO BAD THE BUILDER SHOULD HAVE NEVER BUILT THE PLACE. 4 YEAR OLD BUILDING AND IT HAS BEEN LEAKING FOR THREE OF THOSE YEARS.

THE LAWSUIT IS A JOKE ALSO. BUT I TRULY O LOVE MY NEW HOME AND AGAIN VERY THANKFUL FOR THESE PROGRAMS.
0 votes Thank Flag Link Mon Oct 29, 2012
I purchased a BMR condo in San Mateo. It was a new development when I purchased and I thought I was getting a great deal. In the end, I lost money on the unit and would NEVER recommend purchasing BMR units to anyone. Here is why: the HOA dues continued to grow each year. My HOA dues were close to $450.00 when I finally sold my unit back to the City (at a loss). Keep in mind....The property only increases in value if the median income increases....So recently, there was no increased value on the BMR units and the value actually went DOWN when the economy went bad. After living in the unit a few years, many things required replacement because they built the BMR units with low quality EVERYTHING!!! Linoleum instead of tile...cheap carpeting, cheap appliances, cheap light fixtures, cheap cabinets.......SO....if you replace any of these things with good materials, you will be lucky to get any of your money back upon sale (especially if the median income has gone down). In other words....there is absolutely NO real benefit of owning a BMR unit other than the tax benefits of ownership (mortgage write-off) and the little equity you make while paying down your mortgage...unless that equity is swallowed up by decreasing median income limits. Yes....it looks great on paper and the city wants to make everyone believe they are doing a great deed by making BMR units available but I am so much happier renting and saving money to buy my next place at market value so that I can have ALL of the benefits of home ownership. Do yourself a favor and RUN for the hills if you are offered the chance to purchase in the BMR program.
0 votes Thank Flag Link Thu Jan 21, 2010
Yes I've sold BMR's and know of some really BEAUTIFUL ones available. As long as it's a nice development, you can expect your BMR to go up in value 5-10% every year. It has to do with incomes.

BMR's are allowed to go up in value every year at the same percentage of average incomes in the area. So long as average incomes rises, so will your BMR. The restrictions on resale require that you sell to a low or moderate income qualified buyer. As low and moderate incomes rise, those low and moderate income borrowers will qualify to borrow more money and pay you a higher price on your BMR home.

Low and moderate incomes in the Bay area have been rising at a very high rate for the past 35 years and San Mateo is one of 4 counties with the highest incomes in California. This means that BMR's will climb in value every year at a steady rate, perhaps at a faster percentage than market rate properties. At no time will BMR exceed market rate properties values, but it is possible that they could sell at similar rates in the future. It all has to do with incomes in the area.
Web Reference: http://www.brisbaneca.com
0 votes Thank Flag Link Sat Sep 5, 2009
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