Why We Talk More Owners Out of Selling Here
Start with the uncomfortable part, because it is the most useful thing on this page.
On a rent-controlled San Francisco building, the displaced tenants have a right to return at their prior rent once repairs are complete. That is true whoever owns the building when the repairs finish. So a buyer prices the building on the rents that will actually be received, which on long tenancies sits well below what the restored units would let for on the market.
Which means the discount we apply is a discount you can avoid entirely by restoring the building yourself. The tenancies come back either way. The only question is who holds the asset when they do.
Is That Not an Argument Against Your Own Business?
What We Buy
Fire-damaged residential property across San Francisco, in any condition. Single-family houses, two to four unit buildings, larger apartment buildings, and property containing unauthorised units. Rent-controlled and not. Tenanted, partly tenanted and vacant. Claims open, settled, denied and uninsured.
Where we decline it is geography. Outside the city — Daly City, South San Francisco, Oakland, Berkeley — different local rules apply and we would be the wrong buyer.
How the Number Is Built
The income the restored building will actually produce given the tenancies that return, less the cost of restoring it, less carrying cost, less the transfer tax at the applicable tier, less margin.
Note the first line. Everywhere else that would be "what the restored units would let for". Here it is not, and that single difference is why local and out-of-area offers on the same San Francisco building diverge so widely.
Why Do Offers Vary So Much on the Same Building?
Where Our Interests Diverge From Yours
We are the buyer. Not an adviser, not neutral. We benefit if you accept less and decide quickly.
The section above is the honest exception, and we would rather you read it sceptically than trustingly: check it. The Rent Board holds the rules on the right to return, the Planning Department holds the position on unit removal, and the Assessor-Recorder holds the record of what we have actually bought.
We are also not brokers, not public adjusters, not contractors, not contract assigners and not lawyers. That last one matters unusually here, because the Rent Ordinance carries procedural requirements where the sequence is what makes an eviction lawful or wrongful, and that is not something a buyer should be advising you on.
When a Different Buyer Is the Right One
A multi-unit specialist, on a tenanted building. They underwrite tenanted San Francisco property for a living, and on a building with a complicated rent roll they will frequently see value we do not.
An owner-user, on a smaller building. Someone buying a two-unit property to restore and live in can pay above an investor's number, because they are not underwriting an income stream at all.
Nobody — restore it. The case set out at the top of this page. It applies more often in San Francisco than anywhere else we work.
What We Ask of You
One thing, and it is in your interest as much as ours. Tell us about unauthorised units. They are common across this city, buyers expect them, and they affect a figure honestly rather than fatally. What they cannot do is stay hidden, because disclosure on a development application is made under penalty of perjury and a buyer who discovers one in escrow usually withdraws rather than renegotiating.
Reaching Us
Send an address through any form on this site. Before you deal with us, ask us the rent roll question set out on our page about how to tell local cash buyers apart, and read what applies on our page covering units, tenants and demolition control.