6020 California is a TIC located in the choice Lake District, a stonesthrow from Sea Cliff and a couple of blocks over from the Presidio. Before we get into why you might want to consider this TIC, here's some pics of unit and general description of its features/layout:
This is an upper floor unit in a classic Edwardian unit. Classic split floorplan, with the family/living room on one side of the building and the kitchen and bedrooms on the other side.
The kitchen is clean, spacious, and bright, albeit with non-upgraded features. A good starting point nonetheless.
The bedrooms are of decent size and retain some nice period features in the overhead lights.
The main selling feature of this TIC though is the shared rooftop deck. It's pretty expansive and look it fits not just one umbrella table, but two!
SF Bubble Perspective: TICs, or Tenant-in-Common units are quite popular in San Francisco. As they technically were not condo units, and hence lack some of the priviledges that come with it (see our TIC Housing Resource guide for more details on TICs), TICs have historically traded at a discount to a similarly spec'd cond unit. In the past real estate market, TICs presented themselves as a great opportunity for home ownership, with the potential advantages of a lower entry price. Ironically, during the big housing run-up of '04-06, TIC prices crept upwards and often times were virtually on par with condo units.
With the potential for condo conversion down the road, many looked to TICs for the ultimate "flip" opprotunity. As with most things in real estate these days, nothing is for certain nor guranteed. Many owners of TICs these days are realizing the pain of holding communal TIC loan or paying higher interest premiums on TIC fractional loans. Others, are saddened with the fact that winning the TIC->Condo conversion lottery is well..............just as difficult as winning a real lottery.
However, there is hope. 6020 California is located in a 2 unit TIC building. If you've read our TIC housing resource, you'll know that 2 unit TIC buildings can automatically convert to condos after 1 year of ownership (both units need to be owner occupied). So think of this as your FastPass to condo conversion. The other unit (6022 California) is owner occupied, so you know there is a vested interest from that party in sticking out the year to condo heaven.
Square footage for this unit is not listed, so we are guestimating it be around ~1100-1200 sq. ft, which puts the comps at $624-$680 sq. ft. In the current market, $590-620 per sq. ft. is a good target to shoot for, so while this unit is not exorbitantly overpriced, there's definitely room for some negotiating (remember, there should be some handicapping as well for the lack of a parking spot -> has a leased spot across the street which the seller will prepay the first 6 months). Negotiations on TICs are usually a bit difficult as the owner is typically trying to sell out the entire building's set of units.............so negotiations on an individual unit are tough at times, as the owner is wary of pricing implications on the other unsold units (similar to a new building developer). However, in this case, as the other unit is owner occupied, you are essentially dealing with the price ramifications on one unit, so it's all a matter of finding the optimal price level that the owner will be happy with. Best of luck with this one and please leave comments on your thoughts on pricing and the viability of TICs (2-unit ones that is). Also, let us know if you want us to review other TICs as they become available.
2 comments:
aren't all TICs a bad bargain for most buyers these days? Why fuss with the higher rates, the mixed financial tangles, when there might be better value and utility in well-negotiated condo or single family home? 1946, 1948 California is another 2 unit TIC desperately seeking buyers; it's already come down $320K!
Keep up the good work.
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