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TIC lottery conversions taking longer than ever

by sfishome on March 26, 2009

San Francisco requires all multi-unit buildings with 3 to 6 units that wish to convert to Condos to enter their lottery to try to win an application ticket. Only 200 units are allowed to convert a year, and that was just fine when only 200 units entered. Today there are so many units vying for a lottery ticket that according to G3MH.com “The City estimates that most properties entering the 2009 conversion lottery for the first time will not win conversion eligibility before 2030.”

In other words, don’t plan on buying a TIC in a 3+ unit building (or a 2-unit with only 1 owner occupier) unless you plan to also sell it as a TIC.

There’s been a push to try to get the City to allow current lottery entrants to buy an application to convert to generate revenue for the City. But San Francisco’s Board of Supervisors are unlikely to agree to that no matter how dire the City finances might become.

When considering buying a TIC, be sure to hire a Buyer’s agent who knows TIC’s so you know what you’re getting into. I personally think TIC’s are excellent investments, and the “risks” are over blown by unknowledgeable people. But since the promise of a conversion to a condo is so remote for all except 2-unit buildings with 2 owner occupiers, you need to know you are likely to be selling a TIC whenever you plan to move on.

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