2-unit REO in Noe Valley

by sfishome on June 5, 2010

 1081-1083 Noe St a 2-unit building in Noe Valley is now only asking $1,104,900 after it’s third price drop in as many months.  Listed as a banked owned REO it has on and off the market for 4 years now. 
Initially listed in 2006 for $1,844,000 for a 2 month period and then pulled for over 2 years.  Unfortunately it was re-listed in the San Francisco MLS just prior to the Bear Stearns news in late 2008, and so it began it’s slow march down in price before it was de-listed in January of this year.  It was then taken back by the lender about 10 days later.  The last price before it was taken back by the bank was $1,399,000. 
Per tax records the lender’s purchase price was $850,200 – presumably the amount of the first loan.  So while $338 per SqFt for this 3,268 SqFt building looks like a pretty good price, just maybe there’s still room to go down if you’re looking for a San Francisco investment property. 
Note that both units are tenant occupied and are paying a combined $5,395 in monthly rent per the San Francisco MLS.  One way this looks like a potentially excellent investment is that Condo prices in the area tend to start at $600 per SqFt and go up from there.  So even if you assume as much as a 20% discount as TIC’s, purchasing these units for anything under $400 per SqFt looks like a great deal. 
One caveat is that listed square foot information has multiple problems in multi-unit buildings.  For one they are probably counting common hallways, and two SqFt info is often wrong in tax records.  But if you’re an investor, consider taking measurements, do some due diligence on each unit’s re-sale value as a TIC, factor in all costs, and you just may find that there’s some good value here. 

1081-1083  Noe St is just off of Noe Valley’s 24th Street shopping corridor.  So it is a great San Francisco location that will always sell.  The caveats – no parking in the building, and both units currently tenant occupied.  But if this looks interesting and you’re not already working with an agent, give the SFisHOME Group a call.

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