Rental Advice

I belong to a local parents group / email list and recently replied to
a woman's request for help regarding some troubles she'd had finding an
apartment for herself and 2 kids:

I'm searching for a new place to live for myself and my two girls, but
I'm starting to get the distinct impression that landlords are less
than thrilled about my children. (One woman told me over the phone
that I wasn't a good candidate because I was a single mom and she
didn't think I was going to pay the rent. How she decided that without
any knowledge of my income or expenses was beyond me.)

Are there any renters on the list? Has anyone encountered problems
with trying to move the family into a new place? Any suggestions?

I offered the following advice:

As a realtor and landlord I know it is illegal to discriminate on the
basis of familial status. On the other hand, some people (landlords) do
discriminate. I would suggest that a couple of things impress
landlords:

1) most kids are relatively well behaved, meet the landlord at the
property along w/ your kids (when the are well rested and well fed &
happy) and show her/him that they are well behaved and they are not
screaming banshies.
2) getting the appointment to see the apartment does not require you to
say that you have two kids.
3) references from former landlords go a long way, as do credit reports
and employment references. on the other hand, fiends, relatives, the
fact that you go to church, or sob stories, etc. do not.
4) finally, presentation, matters a lot: speaking well, making sure
your kids are not crying in the background when you are on the phone,
nice appearance and clean car etc, mean a lot to a landlord. Think
about it, if you care for your car and yourself, there is a hope that
you will care for the landlords property. If you don't, the landlord
won't rent to you.

I'm not a big fan of the tenants union, they are reactionary and a
negative force in this city. I'd point you to the SF Rent board before I
went to the TU. I would also point you in the direction of the california
apartment association, which has a "renters" section on their website
(caanet.org) or the SF apartment association. I don't know if they have
a list of landlords that have availabilities, but their members are the
most educated about the law and proactive about doing business in a
fair way, so they are the landlords that I would want to rent from.

I'll just offer this last bit of advice: you don't want to rent to
someone who is going to discriminate against you on the basis that you
have kids. Those people are not good landlords anyhow.

best of luck

Another list member replied to my post this way:

As a realtor and a landlord, of course Michael Sundius is "not a big
fan of the tenants union." In a city where housing is so expensive
and homelessness (including for working families) so extensive, for a
landlord to call the tenants union "reactionary" and "a negative
force" is as predictable as it is ludicrous. For anyone who cannot
afford to own their own home in the city and who must therefore rent,
the tenants union is the best source of information and support
available. I say this as a rentor who has lived and rented in San
Francisco for 23 years, with impeccable references from a number of
landlords, and as a Certified Law Student currently working on a
landlord/tenant case.

Michael's suggested response to illegal discrimination is not to
oppose the discrimination but to avoid dealing with those people. If
the civil rights movement had followed that advice Black people would
still be sitting in the back of the bus.

And poof.. we have ourselves the age old disagreement. I'll add the
rest as comments for readability. Please I'd love to hear your thoughts
about this and the opportunity to air mine in as well.

I have to smile at reading that a Berkeley Rent Board member (Chris Kavenaugh) was arrested
for fraud recently: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/09/22/BA0ASBT8I.DTL

and even better, he was discovered because he was making a stink because he wanted to maintain property rights that he (as a tenant) was not entitled to. It just goes to show, these tenant activists will go to any length to squat on others property.
s

I posted the Bernal Heights real estate statistics for March today. There was a big drop off in number of sales for the 3 month trailing averages since December was such a big month, yet the distribution of sales over the last 3 months for # of bedrooms and styles of homes was largely unchanged. Victorians and 3 bedroom homes being the bigges sellers, though ironically only one 3br Victorian has sold in the last 3 months.

The number of homes for the month was up just 1 to 10 and average price was up 5.5% for the month to $868k and the number of homes on the market and in contract were up 15% so it does seem that the market is starting to pick up nicely. We have also seen several properties come onto the market in the first few days of April and expect to see a further jump in listings this week after Easter when the season really starts. Inventory is still fairly low for this time of year at 11 homes yet buyers are still acting very cautious; thus the market seems pretty balanced between buyers and sellers.

Nothing new in the multi-unit market, no new sales occurred thus the numbers for the 3 month average are down though the prices are up just under 9% to $787k. There are a few new listings of multi unit buildings and one is in contract. It seems as though multi unit buildings across SF have not seen buyers responding and I feel that the inventory is growing.

Condo and TIC prices and numbers were basically stable in March and the condo factor remained not significant.

Again, I feel that while the market in Bernal Heights and San Francisco is much smaller than in years before, its is very well balanced between buyers and Sellers. Properties priced low will still get bid up, yet over priced properties will stay on the market waiting for the perfect buyer. I feel that while extremely cautious, there are still many buyers lurking in the wings and this is causing the SF market to be extremely efficient; now, its even more difficult to find that great bargan property. For Multi-unit and investment properties I wonder if we'll see a bit of a dip in prices as inventory continues to inch up. In all rents continue to rise so sellers of multi units may continue to be increasingly patient. Single family homes, on the other hand, seem to be getting snapped up quite quickly.

Props in Play

So from time to time I'll post this. The following is a list of properties that I know are in play, but may not be listed so I won't give all the details for every property right here, for people to get an idea if that is what they are looking for. If you are interested in any of these you should probably give me a call. I always am coming across new stuff like this so if you call please ask if there is anything else that has come up recently.

1) 107 Anderson Classic Victorian near the top of Bernal Hill on the south side. 4 Br 1 Ba. $899k
2) 2 unit (both 1br 1ba) Current owner is just finishing the rehab and its looking totally sweet. Spectacular location near shopping, public transport. Totally turnkey. Totally awesome, wait till you see the pent-house and roof deck
3) San Francisco corner market / liquor store that does a good business
4) 6 room Victorian in Bernal on upper part of Crescent. dining room converted to 3rd bedroom 1 ba plus unwarrented 1/2 bath. nice looking building.
5) Mid century 2br 1 bath fixer. between Jarboe and Cortland. Easy walk to shops and transport. a wonderful neighborhood.
6) Bernal home on double lot, again easy walk to shops transport and wonderful neighborhood.
7) Bernal Mixed use.

Do you know any other's that are in play? do you have any interest in the ones listed above? Call me.

Habitat for Humanity

Well, on friday, February 23, I volunteered a day of my time to help the folks at Habitat for Humanity build a house for a family in need. I'd been wanting to do this for a while now, and finally just told everyone that I was going and doing it. Well, I had a great time. I suggest everyone takes a day every month or so and puts in a couple of hours of time for a good cause. The world would be a much better place if we all did, not just for those in need but for those who have as well.


Two more cents worth.

Bonnie Spindler's Got It Wrong

I noticed an advertisement that Bonnie Spinder has in the SF Examiner. It Says "Buy, Sell, Repeat. Then Retire."

She's got it wrong. The best way to get there is "Buy, Work Hard, Repeat. Then Retire". Selling is not the necessary component. In fact it only delays the end goal. If you keep selling the properties that you buy, then you'll keep paying Bonnie lots of commissions which will allow her to keep purchasing those big full page ads in the newspaper, but it won't get you any closer to your retirement. On the other hand, if you keep the property, rent it out or use it for a business, then it will generate revenue which can initially pay down your mortgage, and ultimately pay for the miathai's that you'll be ordering on the beach during your retirement.

Don't get me wrong, I've sold a building or two in my career, and there are good reasons to do so. For one, if the building doesn't cashflow, then dump it. Or if you need the money for a bigger more profitable investment, or for your kids education. Well, we do what we gotta do. But in retrospect, I don't think I really needed to ever sell any of the properties that I sold.

I also want to mention the work hard part. Its not just like flipping pan cakes here. Real Estate investment is not a free lunch and to get to the end goal, you can't really be living off of your investments (otherwise it would be retire, then buy, sell .... it doesn't work that way). This means that while you are buying and buying you need to be working your 1st job. Even if you 1st job is a Real Estate agent like me or Bonnie, or a contractor or a street sweeper. You gotta eat while you are biulding the equity in your properties.

Further, don't think that Bonnie is just mis-informed herself, she may sell lots of properties, but can't believe that she doesn't have a pile of rental properties that she's keeping for the long haul. And I know she's working hard..... to get you to sell that property to her.

That's just one investors opinion: Think and justify your actions before you sell it.

Ups and Downs of Inexpensive Housing is SF

The following was I response I sent to Carol Lloyd who writes Surreal Real Estate regarding one of her recent posts. I take a particular interest in housing for the rest of us in this world and I thought this would be useful for agents as well as buyers and sellers of TICs:

Carol,

Your article a couple of weeks ago about the BMR studio in the fancy condo development down town was very interesting. I found it somewhat apropos, as I recently encountered some problems with a similar foundation while working on a deal to purchase a 1br TIC for one of my clients. It is 1 of 4 in a newly developed TIC building, which is to close next week.

Well, when at last the 4th partner got into contract and all the buyers were able to meet. One of the buyers (not my client) pulled me aside and told me that my client was "the weak link" since she was putting only 5% down and that he wanted assurance that my client had the reserves to cover unforeseen expenses like replacement of the aging roof. I'm felt a bit pressured, but standing my ground I told that buyer that my client was as strong as anyone in the group having a higher credit score than everyone else, a smaller loan than others (because of the particular unit she is buying) and she has plenty of reserves. I said she's got a better credit score than you!

In response I was told "I have a net-worth over$10 million" in a tone that suggested how dare I cast doubt on him. At this point I recognized the problem. While my client had less equity than the others, she was actually more closely aligned to the other two buyers in terms of financial status than this guy who had the $10M in the bank. Really, everyone except george lets call him, was really just one broken leg away from being in the poor house, and barely able to scrape together the down on a 1br TIC as their first owned home. George, on the other hand, was buying this as a 2nd home for his spouse to stay while in SF.

hmmm. I wondered to myself and to my client what other sorts of troubles could arise out of such a situation; Everyone (with good reason) loves the place, though, so the minor financial worries were brushed aside in favor of progress.

Now its time to get insurance... I did the leg work for the group since my pushing people to get quotes of their own resulted in silence; I presented the group with a quote for insurance. Well, surprise surprise, our fiend is back in 2 minutes pushing a quote of his own, except the personal liability and personal property coverage is next to minimal!!! why would that be? possibly that George has lots of coverage for those things though the policy on his primary residence... Should the rest of the group be exposed to that extra risk? Is this the last of the incompatibilities of this group? My client is no dummy and is going into this with eyes open of course.

Not sure why I relay this story to you. I guess the moral of both of our stories here, is not to push segregation between rich and poor, or one group and another, but to educate people about agreements that they are entering into: you as a journalist, and me as a advocate for my clients. Really, its a reminder that anyone buying/selling real estate should have a good real estate agent as well as read the Chronicle every week.

ps: I held off sending this to you until the deal closed. Anyway, the story has a happy ending, as they all got what they wanted and are now living happily ever after.

New Year Update and Old Year Wrap

Well 2006 is done, and it was a wonderful and educational year for me. I'm grateful for the opportunity to have learned and help where I could and I believe that it has already begun to lead to a very successful 2007.

In the past year I have worked on projects both for sellers and buyers in Multi-Unit, Single Family Homes, and Tenants In Common deals. I attended classes on appraisal, financing, and other aspects of real estate investment and read several books on business organization, entrepreneurship, and proactive sales. I expanded my network to several investor clients, people within the SF County Housing Authority, Habitat for Humanity, and other Lenders, and most importantly many neighbors in my home neighborhood of Bernal Heights. All the while doing what I do and having fun.

However the biggest achievement of 2006 was my break from a dual career as a Software Engineering Consultant / Real Estate Investment Specialist. I gave up the software all together because I felt that my effectiveness at managing 2 careers at once was less that excellent. I was not able to be exceptional at both jobs at once, so my focusing solely on real estate has boosted the level of my learning and performance in terms of commissions but also (and more importantly) the level of service to my clients and tenants. This has been a very difficult step to make since I had never really been sure of my future direction until recently. I knew that I felt that I needed to change and do something different than engineering, however I could really not put my finger on exactly why. My interest is very much in real estate, but why? without the answer, I could not really be sure that I had made the correct choice. Should I really have left the high dollar contacts for real estate? was that the right decision? was it a mistake? This delema has haunted me for the last 7 years, ever since I left the big experiment with the Dot Com Startup. I could write forever about this (I won't); the essence of my point is that only after taking my leap of faith and following my instincts, was I really able to answer the haunting question: "why am I doing this?" and put my fears to rest. The answer is my mission. The answer is about gratification. The answer is about helping people. My first career was for me. The gratification was in the overcoming of technical challenges. Solving engineering problems is difficult, but in the mess of it, the challenge is fun for a while. Finding the fastest way to do something or fixing the most bug in the software or being in charge of designing this or that widget. It was really exciting, for a while, but it was only self-gratifying. Eventually, instead of being gratifying because it was difficult, it just became difficult.

This is not the way to live. I had said it to myself and others many times before, I had even said it in my mission statement on my website. I say that: "I am doing this to help people and to give back some of the things I've learned about investing about real estate". I hadn't put it together really. That is the answer to the big WHY. Why am I taking the direction I am taking in my career? Because helping and working with people is more gratifying than working as an engineer building machines that do impersonal tasks.

Well that is a lot of discourse on a simple thought, but its big for me and I hope it is enlightening for you. I felt it important that my clients and my network knows what I'm up to and what I'm about.

SO....

This year I am poised to focus my attention to working on sales of businesses, mixed use properties, and more multi-unit properties as well as serving local home buyers and sellers. I currently have a couple deals under contract and I'm pleased with the prospects of the coming year.

I plan to continue my education by taking more required classes for my brokers license, and by self directed reading into investing in real estate, marketing, and business and finance.

Finally, I hope to include many more people in my network. If you are reading this, please let me know and help me build my network of interested and interesting people.

Good Luck to you in the new year.