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March 2, 2015

Sellers Search for Build-It-Yourself Buyers


There are at least a dozen single-family homes on the market that are being sold with approved construction permits, architectural plans, or simply positioned as “opportunities to build your dream home.”

The trend in 2015? Hand off construction to buyers, who will hopefully pay a premium for lot value and approved (or unapproved) plans. In many cases, the owners (typically an LLC or contractor) may have more pressing projects and will agree to sell if the numbers add up. Or, in the case of those selling properties without approved plans, they may be anxious that today’s market won’t be quite as strong by the time they can get plans approved and the property built.

These types of projects can be appealing for buyers tired of competing for the latest single-family homes in good locations. If you can afford the entry price, keep in mind a few ground rules. First, you’ll be looking at construction costs of about $500/square foot. And if you’re taking on a ground-up project without approved plans, it will probably take anywhere from two- to four years to get through Planning, neighbors, permits and construction, as per contractors I know who routinely flip properties like this in Noe Valley and surrounding areas.

Here’s a look at what’s out there now:
564 Valley, Noe Valley
List Price: $1,500,000

What’s For Sale Vacant fixer with approved plans for a 4BR/4.5BA, three-level view home with 3,000 square feet (see photo above for rendering).

Big Selling Points It’s Noe Valley (!). Four walk-out decks, rear garden.

Back Story Current LLC owners paid $800,000 in 2013 for the property. This particular block on Valley became known several years ago for large homes replacing cottages. So the future rebuild will be right at home.

Update: 564 Valley just closed escrow on 3/10/15 for $1,550,000 in an all-cash transaction.
4308 21st Street, Eureka Valley
List Price: $2,300,000

What’s For Sale Approved plans and permits for a new 3,573-square foot 4BR/3BA/2 half bath home to be built on a now-vacant part of the lot. Included in the sale is the existing 2BR/1.5M Craftsman home that is separate and is not part of any development plans. Both homes will be considered to be condos upon new home completion.

Big Selling Points Nice corner position for the newly built house, lovely block in Eureka Valley. View terrace, ability to command two freestanding houses and create your own compound.

Back Story Seller is a contractor who paid $1.3M in 2012 for the property and is busy with other projects at the moment. Property will be two condos instead of two separate lots because it was probably too much of a pain to get approval to subdivide the lot.

3750 21st Street, Eureka Valley
List Price: $2,495,000

What’s For Sale Fixer that’s down to the studs in some rooms, situated on a prime view lot in the neighborhood. Architectural renderings available, but no approved plans/permits.

Big Selling Point Views, excellent location.

Back Story This LLC purchased the property off market in late 2014 for $2,000,000. He’s looking for around $3M for this property, despite the list price.

Update: The seller dropped the list price to $1,895,000 on April 10, 2015.

1611 Broderick, Lower Pacific Heights
List Price: $2,975,000

What’s For Sale Partially remodeled house with plans and permits for 5100 square feet of living space across three levels, in an ok Lower Pac Heights location.

Big Selling Points Top floor has three bedrooms and two baths. Majority of plumbing, heating and electrical is done.

Back Story Seller paid $1,200,100 for the property in September 2013. They need someone to finish the project.

2724 21st Street, The Mission
List Price: $1,199,000

What’s For Sale Approved plans and permits for an 1,897-square-foot, 4BR/2.5BA single-family home with garage.

Big Selling Point Location is deep in the Mission between York and Bryant, convenient to many new retail businesses and restaurants.

Back Story Last sold for $650,000 in June 2013, 2724 21st Street has been in and out of contract once already. The main level is tenant occupied, but the lower “unwarranted” level is vacant.

3695 Market Street, Twin Peaks
List Price: $1,599,000

What’s For Sale Architectural plans for a 3BR/3BA view house, but no approved plans or permits. Property is in an RH-2 zone, so maybe you could get a two-unit building through Planning and the neighbors.

Big Selling Point It’s Twin Peaks, it’s all about the views.

Back Story Last sold to a developer in September 2014 for $1,415,000.

50 Urbano, Ingleside Terrace
List Price: $995,000

What’s For Sale Plans in final stages of approval for a 750-square-foot addition that will turn the existing 2BR/1BA house into a 4BR/3BA home with 1900 square feet on a pie-shaped lot.

Big Selling Points Period detailing throughout, nice Ingleside Terrace location.

Back Story Last sold in 2004 for $845,000.

2008 Vallejo, Pacific Heights
List Price: $5,495,000

What’s For Sale Architectural drawings for a major renovation of a 4,500-square-foot, 5BR/3.5BA Georgian mansion that’s been heavily damaged by a fire.

Big Selling Points Prime Pac Heights location with northern views.

Back Story There was a three-alarm fire here in April 2013. Property has been owned by the same person since the 1970s.

Give me a shout at 415.823.4656 / if you’d like to see any of these properties.

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