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Lajja, Home Buyer in Twin Peaks, San Fran...

Is Bernal heights a good area to invest in a 2 unit TIC for a fast track condo conversion? However the TIC does not have parking.

Asked by Lajja, Twin Peaks, San Francisco, CA Thu Jan 20, 2011

I mostly see Single family homes in Bernal heights so wonder if Condo would have a good re-sell value in a few yrs. The TIC also does have any parking and since people invest in Bernal for being close to the freeway would NO PARKING in a Condo be of a concern down the road?

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Thank you all for the very wonderful comments. The 2 unit TIC that I am interested in is on Cortland avenue, sort of mid-way in Cortland (by Bocana). After reading all the comments it seems like parking would be a problem especially since the property is on Cortland and where parking is scarce. Also I will have 2 cars so it might be frustating to look for parking everyday. I was unable to find any parking lots in the area unless any expert out there knows of any.

Wow I also didn't realize that even though 2-unit bldgs pass the condo conversion lottery, it can take upto 2-3 yrs for the process to complete. The bldg and the unit itself is absolutely brand new with all the upgrades recently completed so I would not have to spend a penny in remodeling the place. I wonder how much of an upside would this property get once it's converted to a condo? The current price is about $570k.

One more thing- The unit has a commercial space downstairs for sale so if that were to end up being a coffee shop or a store would the property value be lowered?

gosh its so hard to deceide. Please help once again.
0 votes Thank Flag Link Mon Jan 24, 2011
Hello Lajja, There are a number of things to consider in regards your post and without knowing more about your particular situation and unique investment needs so I can only answer on the face of the question. It is true that parking (depending upon the neighborhood) can add $30-70K to the value of a property. It is also true that some neighborhoods/blocks are better than others in holding their value with or without parking. The trend in urban areas is towards having a higher WalkScore because many people are electing to get out of their cars, they want to live near transit (ie. Genentech/Google stops in nearby Glen Park) and have shopping/lifestyle need stores, etc.within walking distance. So not having a garage is not the worst thing. Many people find Bernal so desirable that getting into a TIC (soon to be condo) could be a good investment. The market conditions that made TIC's a great option in the past aren't in play anymore, so pay attention to the purchase price...get a professional to help you understand what a good price is on this before you write your offer. However, what do you mean fast-tracked? 2-units have no restrictions to go condo...so there is no lottery process....therefore by "fast-tracked" do you simply mean that the current owners have already begun the process... have separated utilities, and accomplished/prepaid for etc. application requirements?

If you would like to discuss this further, I am available to help so call anytime. All the best, Callista
0 votes Thank Flag Link Fri Jan 21, 2011
Parking will always be an issue when you plan to sell down the line because you will have a reduced number of interested buyers. As far as a good investment, it all depends on the price and terms. I require more details to help you assess that.

Oggi Kashi
Paragon Real Estate Group DRE 01844627
Web Reference: http://www.oggikashi.com/
0 votes Thank Flag Link Thu Jan 20, 2011
Like most neighborhoods, some parts of Bernal are more desirable than others. If your building is located in one of the more desirable locations, then the fact that it is a condo w/out parking might be overlooked by a buyer. As a rule of thumb, a parking space is valued at between $40k and$75k or maybe a little more, depending on circumstances.
Web Reference: http://www.timwoloshyn.com
0 votes Thank Flag Link Thu Jan 20, 2011
There are a fair amount of condos in Bernal Heights, and the neighborhood is popular and desirable. So I believe a condo investment here would be a sound one. That being said, the lack of parking could be a problem, but that depends on where you're located in Bernal. The closer you are to Cortland, the more important parking will be.

One thing to keep in mind that "fast track" conversions typically take about 2-3 years when all is said and done. So you will be sharing a loan for that time period, which is something to consider in the current economy.

Please check out the TIC section on my blog, which could be helpful to you:
http://www.insidesfre.com/category/tics/

Best wishes,
Eileen Bermingham
Zephyr Real Estate
Web Reference: http://www.insidesfre.com
0 votes Thank Flag Link Thu Jan 20, 2011
Hi Lajja:
Bernal is one of the neighborhoods that is hisghly desirable for it's weather, closeness to freeways and charming character. But the location, the configuration and condition of the units and the price point will have a significant effect on the desirablity of the units as condos. Not having a garage in Bernal could be a major negative in many of the areas in Bernal as street parking is tight and public transportation is pretty much limited to the bus on Cortland. For entry level condos, it may not be as significant because Bernal is very attractive to bicycle commuters.
If you would like advice on the specific property you are considering, please feel free to contact me anytime.
Maureen McGinley DRE #01049345
415-407-9256 cell
sfcarealestate@gmail.com
0 votes Thank Flag Link Thu Jan 20, 2011
Most likely the fact of no parking will be a wash for you in terms of investment value, however consider why it would be carefully.

How long down the road are you thinking? Parking is a great feature to have, but more and more scarce in San Francisco moving forward. Currently, Bernal Heights has relatively abundant street parking, a zip car lot and is reasonably served by muni. Caltrain and Bart are on the fringe of what would be considered walking distance and so your condo without parking becomes a reasonable alternative to a comparable home in say SOMA or a denser neighborhood.
Remeber the parking issue will be factored into the price when you buy now as well as when you sell later so will in many senses be a "wash" unless the neighborhood changes drasticaly during your holding period.
0 votes Thank Flag Link Thu Jan 20, 2011
It is a good investment. The condo market will be getting better in Bernal, just like it has in the Mission, but it really depends on the views, condition of the property, and how close you are to the freeway. Having no parking is always going to be a concern, and it will always affect your selling price. Parts of Bernal are real easy to park, and some parts are very difficult. Having a leased parking space can help you through this hurdle when it comes time to sell.

Good luck,

Joshua Lawrence
Climb Real Estate Group
joshua@climbsf.com
(415) 971-0454
0 votes Thank Flag Link Thu Jan 20, 2011
Lajja,

There are duplexes and condos in Bernal, so that would not be excluded by default. Each property would have to be evaluated on its own in comparison to what they would sell for is condos to see if there is upside. Lots of places in Bernal don't have parking, although it's always going to add value if you have parking.

No one knows where the market is headed and since you need to have a certain appreciation just to cover commissions and transfer tax, you want someone familiar with the market who is also a great negotiator.

We have done a number of our own projects buying duplexes, fixing them up, and selling them, (one in Bernal), as well as for clients, so if you want an opinion on a particular property or discuss the topic in general our contact info is below.

Best Regards,

Lance King/Owner-Managing Broker
lance@fixedrateproperties.com
415.722.5549
DRE# 01384425
0 votes Thank Flag Link Thu Jan 20, 2011
No parking is ALWAYS a big concern in San Francisco and will effect the re-sale value for sure.
0 votes Thank Flag Link Thu Jan 20, 2011
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