1. Short answer, No. Maybe in Bernal Heights, which I think is a great area, but you have to be willing to leave the inner SF districts.
2. It is very possible, but will take some time.
3. I would say the return is greater on a well invested TIC.
- TICs, particularly 2-unit buildings which can be fast track condo-converted are great opportunities. The current gap between a TIC and condo is roughly 20-30% per unit. In comparison, it only costs roughly 5% to go through the conversion in a 2-unit building (which does not have to enter the condo lottery, over 2-units and its a whole different story). So after the 1.5 years to convert a 2-unit building you’ve got a garuntee’d return of 15%-25%. Not bad for todays fluctuating market. There are obvious risks with TICs, namely your investing with a partner. The trick is finding a TIC that has not been fixed up, because those that are, are usually priced well above what the market may bear for a somewhat risky investment. Other investors might argue that fixer TICs are risky, thats true, but remodeled TICs don’t present much opportunity.
With risk comes reward…
I’m sure you’ve come across the Sirkin TIC agreement in your research, but if you haven’t hear’s a great place to start researching the drawbacks.
http://www.andysirkin.com/HTMLArticle.cfm?Artic…
Good Luck! Be careful of building with any form of evictions; OMI or Ellis (laws are changing quickly in this area)
2 posts, 2 voices
jberl writes, Jan 20, 2008: (1 post)
Me and my fiancee are looking at buying either a 1 bed condo or TIC in SF Our ceiling is around $300k.
1. Even in today’s buyer’s market, does $300k get you anything decent in the city?
2. If we go with a TIC, can we flip it into something worthwhile?
3. Is the return significantly greater on a condo as opposed to a TIC?
stacyq writes, Jan 20, 2008: (3 posts)
1. Short answer, No. Maybe in Bernal Heights, which I think is a great area, but you have to be willing to leave the inner SF districts.
2. It is very possible, but will take some time.
3. I would say the return is greater on a well invested TIC.
- TICs, particularly 2-unit buildings which can be fast track condo-converted are great opportunities. The current gap between a TIC and condo is roughly 20-30% per unit. In comparison, it only costs roughly 5% to go through the conversion in a 2-unit building (which does not have to enter the condo lottery, over 2-units and its a whole different story). So after the 1.5 years to convert a 2-unit building you’ve got a garuntee’d return of 15%-25%. Not bad for todays fluctuating market. There are obvious risks with TICs, namely your investing with a partner. The trick is finding a TIC that has not been fixed up, because those that are, are usually priced well above what the market may bear for a somewhat risky investment. Other investors might argue that fixer TICs are risky, thats true, but remodeled TICs don’t present much opportunity.
With risk comes reward…
I’m sure you’ve come across the Sirkin TIC agreement in your research, but if you haven’t hear’s a great place to start researching the drawbacks. http://www.andysirkin.com/HTMLArticle.cfm?Artic…
Good Luck! Be careful of building with any form of evictions; OMI or Ellis (laws are changing quickly in this area)