There was an old woman in France who sold her house to a younger buyer who could have it after she died. She outlived him, and he never took possession.
The French lady was in her 90’s, he was in his 40’s, so can’t blame him for being optimistic. Who knew she would keep going into 120’s while he died first in his 70’s, which is normal life expectancy for men. I think his surviving wife still need to take over to financially support the very old lady when he past. Life can be so unpredictable.
@@jaker3151That guy was banking in her having so ke from teenage hood and being 90 when he made the deal to pay her to live inside the property (which she owned) as along as he could take possession (basically inherit) of the property upon her death. He died of natural causes in his 70s and she when unto being celebrated for being the oldest human alive. 😂😂😂 He thought he was playing her, but Karma had other plans!
No, not a scam. They're called "deferred possession agreement" or a "sale-leaseback arrangement" (if the seller stays in the home as a tenant). thanks.
They buyer not only not able to move in, but also need to maintain the house, fix issues which is expensive nowadays. A water leak can damage the house and requires upward of $50K to fix it.
@@MAGASupremacy-i4p The terms of this specific agreement is what makes it a scam. Nevermind that you would have to wait for thirty years, you'd also be locked into a rental agreement well below market price. In addition, since you become the owner, all responsibilities with regards to maintaining the house falls to you. So yeah, definitely a scam. Just because they found a way to make it legal doesn't mean it stops becoming a scam.
People are getting creative with their scams these days. Why would anyone want to pay for upkeep/repairs/property taxes on a house they can't utilize for 30 years?
@@GizmoMaltese Highly doubt someone will want to buy a property in 15 years when $417 a month won't even cover monthly utilities cost and the tenant has a lease that'll last another 15 years. Also, the bond has a negative return in the context of accrued interest.
@@GurpreetSingh-et8ix Property value appreciation gives you a positive interest return. Do we know if the rent includes utilities? I doubt it. Also, tenant could be elderly and is unlikely to survive the full 30 years. All these factors must be considered. Might be worth it for someone who wants to park their cash.
As a real estate agent in California, nothing about this makes any sense for a buyer. Regardless of all the different scenarios I’m reading in the comments, this is all around ridiculous. The “tenants” which are clearly the homeowners, would be the only winners in this situation with rent lower than a car payment.
Well it depends on the language in the contract and the reason you purchase the home. $500k for a home that could very well be worth 10 to 20* more in the future could be a very good investment for your children. But again depends on the language in the contract
Exactly what I was thinking. How can you secure housing for 30 years for dirt cheap and also get a nice chunk of change for your retirement and reduce your personal liability… game the housing laws.
Not a plot twist. The writing is written on the wall. Probably childless elderly so why not cash out and have a place to stay until they pass? Actually it's a win win. Most likely it will be bid to 800k - 1m you heard from the here first
Why would I want to pay a mortgage on a property for 30 years when I can’t live in it, have to pay rent somewhere else, and have to pay property taxes? It’s insane.
@@msorge74 0 chance that the money you put into repairs, taxes, insurance, etc that this property revenue will outpace just putting that money into the market for 30 years. They'll pay 1 million in property tax alone before they even step foot in the place.
well at least the rich achieved something in life before that person dies. his kids will probably inherit the fortunes and pass on to the next generation. cycle of life.
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The sucker buyer needs to be willing to wait until they die before they can take possession. The cost of maintaining the house will exceed the rent of $417. It's a legal scam.
A half million dollars for an eleven hundred square foot house doesn't seem like such a bargain even if you could move right in. What does a cardboard box sell for in San Francisco?
If you account for inflation its basically a 3.5M dollar home with 30 years of wear and tear that you have to pay for. Because that 488k would be about $4M properly invested in 2053 while it would be about 1M inflation adjusted so you are paying 3M in loss of possible investment gains and 488k for your principal then you need to add in all the rehab costs for 30 years of wear and tear on top of that. I wouldnt do it
With crimes, homelessness, drug users and taxes, California cities are turning into the next Detroit. Houses and neighborhoods become abandoned. The housing markets is going downward not upward.
I pay 700 I love at home with my family. It's bank greed. It's no longer black people getting redlined. Btw it's also the people who invest in the area I have nothing against Asians. But I know a few who buy areas of land. Houses flip them. Sell them to their friends lol😂 🤧 more like Patsys. Rinse repeat. Make the area nicer. Then you have places where all the people are renters. And because of all the culuding before. That first person who owned the house is one city counsel.😂😂😂😂😂😂😂 It's not just Asians btw. Thought you will notice if you go to an Asian store. Like the ones in the malls. No not like mall malls but more than just a super market and fast food joint. They are own by the same people they all cousins funn😂😂😂😢😢😢😢 it's kind of a pyramid scheme no one talks about
One of my friends lives in an apartment like that. It was even simpler when he was still married. The single bedroom apartments in the city are already crossing $1,000 a month, its such a better deal.
what makes this deal so outrageous is the $417 current rent. Not only is that more appropriate to a property selling for about 50k - 80k, if that amount stays fixed for thirty years it won't be enough to pay the property taxes or pay for basic upkeep. Anybody buying this property today will be feeding a negative cashflow for the next thirty years (or until the current tenant passes away, which may or may not happen anytime soon, we don't know anything about the person) in the faint hopes of cashing in big decades from now.
No, it's not the outrageous thing is you can't own it and use it until 2053. There's ways of getting that tenant out. But you can't move in is basically waiting until the seller dies and then you get it at no more use to him.
@@shipwreck8847 you don't know anything about real estate. Inflation in over 30 years will screw you over. Once you own that home in 30 years you will pay a supplementary tax and it will not be pretty along with the property tax. Oh wait SF is known for earthquakes so if there's one major earthquake your investment is gone.
A website said the property's tax is $17K. Let's assume it's $5K for maintenance, which I think is fair. Lets assume $2K in home owners insurance and $2K for contingencies. So, expected cost for the property is about $27K per year. Purchase price is about $500K, but actual value without that tenant restriction is $1.4 million. Average annual appreciation for the house is probably about 8%. So the house appreciates $100K per year and annual cost is $27K (if you pay cash). It could make sense if you have enough cash on hand, and are really patient.
The deal breaker is really the low rental. That wont even cover the usual annual repairs. Project home owners insurance, repairs rewiring etc over 30 years. This is no deal! It is subsidising another persons lifestyle at your expense.
Years ago, there was a very interesting story like this in France. A man in his 40s bought a home from a woman in her 90s. He got it a little cheaper, but there was only one condition: he had to wait until she died. No problem, right, she should kick the bucket at any moment. She lived past 120 and he died before her! This, along with me preferring to just invest my money, is why I’d never go for a deal like this. Who the heck knows what’s life going to be like 30 years from now. 30 years from now, $488K in a fund matching the S&P 500 would be $8.5 million! I’d never do this.
Yes, me too. The value preservation effect is obvious only when the house is bought very early. Otherwise, it is better to make some related investments
yes, the home is going through family issues, the original owner made sure that part of his family has a place to live in after they pass away, the other part of the family wants to sell it because they don't want to pay the property taxes and just get their share. whoever purchases this house will have to look at it as a 30 year investment property- it is an interesting but sad story. personally I wouldn't touch this home with a ten foot pole, but I am sure someone will buy it.
I mean the new owner could take a mortgage out on the house for triple what they paid for this house, use that money to buy up more property and rentals. They also get 144k in "rent" over the years. So its not a complete loss.
Who would buy a house occupied by a tenant paying such a low rent, especially when you wouldn't be able to move in until 2053, if you are still alive? It makes no sense!
I think I get it. It’s actually quite clever and savvy. I’m interested to see if more people come up with this plan, to keep the banks from profiting. It’s essentially a reverse mortgage to a person rather than a bank.
Seems lile a Rent to own scam, you pay rent for 30 years and then its yours IF you even make it 30 years! By then who would have replaced the roof and kept up with the maintenance??...I would not go for it!
I looked up the tax history and taxes went from 1,700 in 2022 to 17,000 in 2023 no wonder it’s for sale the rent at $417 a month needs to be at 1,417 just to pay the taxes lol wow 🤯 ok now I understand rent control and tenants protection and all but this is highway robbery and unfair to the owners! Who has not experienced rent increases in one way shape or from in the us to make it ok for this individual to continue paying 1920’s rent price in 2023 come on!
How did the tax jump thousands in just 1 year? Usually taxes go up about $1K a year. Unless lots of work was done to the home, which I highly doubt, it does t make sense. This whole thing is weird lol horrible buy
It's a unique juxtaposition. Usually the tenants are the ones being exploited. Now it's the other way around. That is, if anyone makes the purchase. I don't think anyone will unless they can evict the tenant.
@@Sweetheartbabez maybe prop 13? since property taxes in cali are pegged to a 2% increase each year (i think) to the original value of the home, if it was sold, the property would have been reevaluated resulting in such a high increase.
To all the buyers willing to do this: I have some ocean front property in Arizona. From the front porch, you can see the sea. It is so pretty. $488,000. Bonus- you can take possession in 30 days. Before that time, I'm taking a trip to Costa Rica. 😮
Some corporations buy so many houses, and an individual decides to play a different game. I hope this story keeps getting updated because I genuinely want to know who buys this and why.
Considering it’s in Russian Hill, the actual value of the home is probably 3-4 million. In 2053 it’ll probably be around 7million or higher. Buy the house 488k and wait 29 years and sell it for 7million?
It’s actually a great idea for the seller, who clearly represents the interest of the tenant. If they don’t need capital, and can lock in 30yrs of shelter with ZERO inflation over THIRTY years - this is actually brilliant.
@@aimesdavid2800 "Former male owner, over 100 years old died by natural cause in home" according to the listing. The tennant is probably a son or daughter.
Someone bought it in July for the asking price! Less than a month after this story was reported. I guess someone thought they were getting a good deal. Not me.
What a terrible investment! $400 rent for 30 years is not even near the amount of property taxes the new owner will have to pay over the course that 30 years. Not only that, San Francisco has historically had earthquakes and fires, so the home may not even be standing after 30 years
By law, the new owner can evict the tenant if it’ll be the owner’s primary residence. Doesn’t matter what the current tenants lease is but dealing with the SF eviction court is going probably be a long and annoying process.
Not on this one, Ellis Act doesn't apply, trust me if you could Ellis Act, this would have been sold over a 1million, Basically, the way the contract is written tenants own the place until 2053 and then ownership rights revert back to the title holder.
@@futurethinking there Might be ways around it. I have heard of similar things in the past. But, after Lengthily Court battles back and forth. The Buyer won in them, since it was just not possible to have Legal Lease Span over a certain amount of years.
The only way I can see this working is if parking costs more than the mortgage, and that's a 2 car garage that house has; and the new owner can have use of both parking spaces. Or if the new owner can get a permit from the city to add an addition and make it a two family somehow to either live there or rent out at market rate to offset the cost. If not, it's a terrible arrangement. If the landlord pays the water bill in CA, that alone can come to $400/month. Add the taxes, mortgage upkeep of the place, home owners insurance, whether or not this house needs a new roof, etc; and this new owner will be paying this tenant to live there. *NO!* 👎🏾😞
The comments show a lot of financial illiteracy. I penciled this out as a buyer and with 20% down and a 7% interest rate, I got to a roughly annual return of 11.5-12.5% if you sold the house after 30 years depending on how aggressive you want to be with appreciation of the asset. (This includes a reasonable estimate of your expenses as a homeowner, like property taxes, insurance and upkeep.) Obviously, an investment with a 12% annual return is an attractive one in a vacuum and that would increase even more over time if you kept the house and lived there. Probably worth the financial risk However, as an investment to buy now and sell as soon as you can, this is probably not worth it. 11.5-12.5% would likely beat large ETFs over 30 years, but not by that much. Neighborhoods and cities can completely transform over 30 years so there is tremendous risk in assuming steady appreciation of value of a house. Unless you want to live in this house and are comfortable rolling the dice that the neighborhood may be different than when you buy in, you're betting off taking you $100K and buying index funds.
Home was last sold in 1968, this is a family member or someone close to the deceased owner that had the original owner write up a tenant lease before they passed, more then likely had an attorney that deals with tenant leases write it up to make sure it can't be broken.
Even if the house is being sold at 1/3 the price, for something you can't do anything with, but still have to keep up the maintenance for a yearly lost of probably around 15K a year (from taxes, maintenance, insurance, etc. minus the 5K a year in rent), its not worth it. Unless you think the house is going to be worth over 7.5 million dollars after 30 years, and you have the patience of a saint to wait 30 years before you can get anything on your investment, and nothing happens to the house in those 30 years, there's no way it makes sense. This is a super long game plan type purchase, that is taking a huge risk, that doesn't match the return. This is basically a subsidy to the tenant (probably the owner). You take on all the risk, and reap no rewards for 30 years.
Yup. the owner wants to live there until they die, not pay a dime on the upkeep, & profit from the sell to keep have spending money. Just wait it out the owner is broke.
I would buy it and by the time of turn over, it would be worth millions, and time for me to retire. But i'd also make a will that in case i'd die, i'd give it to my kids and do whatever they wanna do with it. At least by then, it would be worth millions like it is today.
Take that same amount of money. Hire an investment advisor. I can guarantee you'll get much more in return for your investment in 30 years. Take some of that money and buy a nice home of your choice for your retirement.
Or it could be worth nothing. 30 years is a long time and many things could happen during that time…especially in California where everything is getting worse faster than the rest of the US…except for maybe NYC. The house could also be lost to an earthquake, a fire, or something else too. Unless you have the money to throw away….it wouldn’t really be worth it…a lot could happen in 30 years. Of course the tenant could always pass away before the 30 years….or the person buying it could pass away….you can never plan for the future because everything changes before you get there.
If you account for inflation its basically a 3.5M dollar home with 30 years of wear and tear that you have to pay for. Because that 488k would be about $4M properly invested in 2053 while it would be about 1M inflation adjusted so you are paying 3M in loss of possible investment gains and 488k for your principal then you need to add in all the rehab costs for 30 years of wear and tear on top of that.
I hear criticisms of this situation and I want to mention three points: first the current owner can do what he wants with his property including bound it to a rental agreement. The assumption is that the owner wants to sell and stay in the property, then set his own rental price, but we don't know if that is the case. Its very possible that its an elderly relative or even a family member with disabilities that the owner wants to be taken care of for the remainder of their life. Second, this offer is not as unreasonable as it seems. The seller is selling the property for a fraction of the price and is basically saying " I will sell the property at a huge discount, and the rest of the properties value will be payed over 30 years to the tenant in the form of lower rent. Third, someone may ask why a buyer would agree to this? Because its a house that upon sale will have millions in built in home equity from day one of ownership. Yes, its now an investment property that would be hard to sell, but a savvy investor buys it, has a tiny mortgage (compared to the actual home value) , then takes out a large home equity loan (pays no taxes on that loan) and purchases a second property with those funds. That is how the rich make money in real-estate.
The state needs to strip SF of their zoning powers. If there are 100 people willing to pay half a million for an 1,100 sq ft house, then there should be construction crews building tens of thousands of more homes in that neighborhood. The only reason there isn't is because of racist laws from the 1950s that ban building more homes. And SF thinks of themselves as a progressive city. It's egregiously ironic.
Will once you buy couldn't you set new rules I mean you bought it already so it wouldn't be there's? To say when to move in if it's not being rented? Only renting could set move in dates ?
What happens if the tenants die? Buyer hits jackpot? Sounds like a horror movie in the making. Criminally minded buyer purchases it and tries to drive out the tenant (use your imagination)....if I was the tenant I would be constantly looking over my shoulder.
@@MeEncantaKiley lol I'd speed up the process! Id expedite the expiration rate. Nothing ever belongs to anybody at one point we all crumble into dust anyways just giving them some help.
I wouldn't buy it. Heck, if I owned the home and I planned to retire in San Francisco in this home but needed some extra cash, I might sell it this way. For $417 per month in fixed rent for 29 years I get $488,000 to boot. The ultimate in rent control. If the roof starts leaking or the water heater needs replacing, I just call my landlord and they'll fix it. That responsibility is lifted. One problem is what happens if the new owner or the tenant dies before 2053. Can the tenant then just let another tenant take over? As far as the owner dying, does the home immediately go to the tenant without waiting until 2053? If so, the owner might need to make sure the tenant doesn't have other ideas. :/
@@567307 because tenant hasn't rented the property, it legally has purchased the right of ownership for 30 years for 480$ a month. You really can't evict them in anyway and you can't break that contract.
It would be hard to get a 30-year mortgage on that because the rent is too low and everything else it doesn't calculate out ! They would have to sell it for like $100,000 . Doesn't matter how many people look at it unless they're going to pay cash there's no way they could sell it for that .
Crazy part is there will definitely be some idiot who'll think this is a good deal and buy it. Who knows what'll happen to that house in 30years, it could become so brutally distressed that it'd require a whole new build ontop.
@@Angelmndy But if you wanted an investment house you would make far more money if you bought an unoccupied (full priced) home and rented it at market rent, then sell it in 20-30 years
@@Angelmndy A house like that, would have a rent around $10k a month, in the current market in that area. And would be looking at pulling in a total rent of around $5 million in 30 years after rent increases every year or two (assuming home values continue to go up at the current rate).
Some people are thinking that this is a scam. I think this is the family home of the person living in it now. The parents probably bought that house many decades ago for between 25k and 40k and were grandfathered into the 1970s property tax protection. That protection doesn't exist anymore and when the owners who had the house when the tax protection law went into effect die, the taxes go up to the assessed value. This means that inheritors have to sell because they can't afford the outrageous property tax on a house that is currently assessed in the millions... and can't afford to rent elsewhere in SF either. I'll bet whoever is living in that house doesn't want to leave and tried to come up with a way to stay in it. Under 500k is incredibly cheap for that house. However, paying property taxes plus waiting 30 years to be able to sell doesn't seem like that good a deal as the US economy is going to crash and burn long before 2054. I find the idea interesting, though. My parents bought a huge 1923 house three blocks from the beach in Southern California in 1967 for 38k. My mother has been able to continue living in that house (90 years old now) because of the 1970s property tax law that she's grandfathered into). When she passes on, my brother, sister and I can't keep the house because we'd have to pay property taxes on a house that is now assessed at 7 million. I'd rather have the house than the money. Bad deal.
I didn't realize it was "cheap" until they said something about it being cheap. I just bought my 1900 sqft tri level for 240k with a 500 sqft outside building and 1.5 car detached concrete garage. 500K would be a massive house around me, and I live in a small city, not the middle of nowhere.
Basically the renter is paying the property taxes (just a general guess, I don't know the actual amount) so the buyer gets zero out of it for 30 years. A lot can happen in 30 years.
I suspect the property tax is significantly higher than 5k per year. I paid 30% more than that for my house in the 10th largest city of an east coast state, just this year. Nevermind what it will be in 30 years.
@@THEhorihito Yeah you are probably right. It occurred to me that there was a good possibility that it could be higher than that but I just made a guess.
@@212days According to the SF Assessor's office, the property tax was $1,692.75 last year. Land Value $55,466.00 Structure Value $87,686.00 Tax Rate 1.182484%
@@RaymondHng Yeah that sounds right. Land value $55K and house value $87K... when the house was last sold 40 or 50 years ago or something. GOOD LUCK on the next person who buys the house (if anyone does) paying $1700 a year in taxes.
Another thing to consider is with all of the insurance carriers pulling out of California and/or dropping policies for various reasons such as homes that are too close to one another, good luck getting insurance on that.
Could actually pencil out for the right buyer… you get $400/mo cash flow guaranteed and an asset worth maybe $1.5m now, and maybe $4-5m in 30 years. It would ultimately have to be for the benefit of the buyer’s estate (children, relatives, etc) given the timeline. BUT… if the current tenant dies, or otherwise disinhabits the residence, there may be a maturation clause that would permit early possession. If you have the doe to drop and not blink an eye, it’s investable.
Couldn't the new owner just use an Ellis Act eviction(out of business) and pay out the renter? They just can't rent it out for a period of 5 years for owner move-in eviction.
The tenant (s) (probably the current owner) will be occupying the property for the next 30 years. They will only be paying $417 in rent monthly. The buyer will not be able to live in the house for the next 30 years. The buyer will have to pay the property taxes and utilities for the house out of their pocket. The buyer will be responsible for repairs and upkeep of the property. Meanwhile, the tenant gets to live in the house practically for free.
Reverse mortgage privatized. Its not a "sloppy arrangement" its a wise arrangement to keep the wolfs away....😂😂 For an investor who looks at long term gain rather then instant gradiafication this is a gold mine that can be handled down to his her legacy. Pretty sure a corporation wont think twice about this one. I honor the person living their being able to feel secure.🙏🏾
Update someone bought it why no idea. Property tax for the property is $16,928 and in 20 years that's about $338,560 and not including maintenance. So that means $488,000 property cost + $338,560 20 years tax= $ 826,560 < not including repair the house next door is worth 1 million that's not really helping.
I don’t understand how people don’t see the value in this as a long term investment. This was almost certainly bought by a wealthy investor or private equity group. They just bought the home for a third of its value. Assuming taxes of about 17k a year, and a couple hundred thousand in miscellaneous repair costs, that is about $710k. Let’s add another 100k for various insurance etc. Ok, that’s $810k they’ll pay for 30 years. Yes, yes, I realize property taxes will slowly climb, so add another $100k. $910k let’s call it. The tenant paid $150k in rent for that time. So all told the buyer will have paid about $760k, plus the initial $488k, so $1,248,000. Still less than the market value when it was initially bought. What do you think the value will be at in 30 years? A nice townhouse IN San Francisco? 3 million? 5 million? Either way, the savvy buyer gets a nice payout as they retire themselves. Likely a couple million. Amongst their hundreds of other long term investments.
That's interesting, so you'd be buying purely a speculative investment that you'd be hoping to eventually sell to another person for more, enough so that it's worth it to pay the expenses on the house in the meantime. There's probably a number where that makes sense, dunno if it's 400k though.
There was an old woman in France who sold her house to a younger buyer who could have it after she died. She outlived him, and he never took possession.
The French lady was in her 90’s, he was in his 40’s, so can’t blame him for being optimistic. Who knew she would keep going into 120’s while he died first in his 70’s, which is normal life expectancy for men. I think his surviving wife still need to take over to financially support the very old lady when he past. Life can be so unpredictable.
In such a scenario if I where the seller I would be concerned the buyer might try to take me out early.
@@jaker3151That guy was banking in her having so ke from teenage hood and being 90 when he made the deal to pay her to live inside the property (which she owned) as along as he could take possession (basically inherit) of the property upon her death. He died of natural causes in his 70s and she when unto being celebrated for being the oldest human alive. 😂😂😂 He thought he was playing her, but Karma had other plans!
It’s called "vente en viager", it’s a practice in France
Wasn’t she the oldest person to ever live
Call it a scam. Don't even bother or do business with that real estate company
Yea I couldn't take a company seriously that would list something like this. It's like a lawyer who'd sue a lemonade stand.
No, not a scam. They're called "deferred possession agreement" or a "sale-leaseback arrangement" (if the seller stays in the home as a tenant). thanks.
They buyer not only not able to move in, but also need to maintain the house, fix issues which is expensive nowadays. A water leak can damage the house and requires upward of $50K to fix it.
@@MAGASupremacy-i4p The terms of this specific agreement is what makes it a scam. Nevermind that you would have to wait for thirty years, you'd also be locked into a rental agreement well below market price. In addition, since you become the owner, all responsibilities with regards to maintaining the house falls to you. So yeah, definitely a scam. Just because they found a way to make it legal doesn't mean it stops becoming a scam.
People are getting creative with their scams these days. Why would anyone want to pay for upkeep/repairs/property taxes on a house they can't utilize for 30 years?
Because math is not their strong suit.
As a long term investment like a 30-year bond. They could probably sell it for 3x value in 15 years.
@@GizmoMaltese Highly doubt someone will want to buy a property in 15 years when $417 a month won't even cover monthly utilities cost and the tenant has a lease that'll last another 15 years. Also, the bond has a negative return in the context of accrued interest.
@@GurpreetSingh-et8ix Property value appreciation gives you a positive interest return. Do we know if the rent includes utilities? I doubt it. Also, tenant could be elderly and is unlikely to survive the full 30 years. All these factors must be considered. Might be worth it for someone who wants to park their cash.
@@GizmoMaltese launder money you mean
As a real estate agent in California, nothing about this makes any sense for a buyer. Regardless of all the different scenarios I’m reading in the comments, this is all around ridiculous. The “tenants” which are clearly the homeowners, would be the only winners in this situation with rent lower than a car payment.
Imagine having a luxury cali home for less than a cheap luxury wristwatch payment.
You can be a half-witted, smooth-brained, , knuckle dragging, mouth breathing moron from land of gimps and this deal still wouldn’t make sense 😂
Why are you paying 1.6k a month for a vehicle?
@nuevomexico505
Oh, my GAWD... 417 a month in rent? I thought that was weekly payments...
I had the wrong numbers.
Well it depends on the language in the contract and the reason you purchase the home. $500k for a home that could very well be worth 10 to 20* more in the future could be a very good investment for your children. But again depends on the language in the contract
Plot twist the tenant is the seller
Good one!
Exactly what I was thinking. How can you secure housing for 30 years for dirt cheap and also get a nice chunk of change for your retirement and reduce your personal liability… game the housing laws.
This comment deserved so many more likes.
That’s exactly what I think lol
Not a plot twist. The writing is written on the wall. Probably childless elderly so why not cash out and have a place to stay until they pass? Actually it's a win win. Most likely it will be bid to 800k - 1m you heard from the here first
Why would I want to pay a mortgage on a property for 30 years when I can’t live in it, have to pay rent somewhere else, and have to pay property taxes? It’s insane.
It'll be worth 3-10 million in 30 years. That is why. It's a long term investment.
@@msorge74 0 chance that the money you put into repairs, taxes, insurance, etc that this property revenue will outpace just putting that money into the market for 30 years. They'll pay 1 million in property tax alone before they even step foot in the place.
@@gringoboy701who said whoever buying wants to set foot in there?
The prospective buyer would be someone super wealthy who is not looking to actually live in the house
@@msorge74bro who’s buying that house for 10 mil in 30 years? Be real dawg..
$400 won't even cover a fraction of property taxes and property maintenance.
That's the point
"Take it or leave"
That's why it's so below market rate (but probably still not low enough to compensate for the terms).
$417/month is insulting, I agree, but can’t the owner raise the rent once they purchase the home?
@@TheBigJawn 1:06 in the video, the tenant pays the same amount of rent until they move out. it's in the agreement
*No man is too rich til you leave the earth you leave with nothing*
well at least the rich achieved something in life before that person dies. his kids will probably inherit the fortunes and pass on to the next generation. cycle of life.
true.but.i.wont.die.poor
We live in this earth, we gotta play our part...He's living life while he is still alive...
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I'm a bit perplexed seeing him mentioned here I also Didn't know he has been good to so many people too this is wonderful, i'm in my fifth trade with him and it has been super,
It’s pretty clever. The current owner, once sold, becomes the renter and set his own rent price lol
You’re right. Its pretty clever.
@@byefelicia8632 Zillow listing: _"...Former male owner, over 100 years old died by natural cause in home..."_
It's pretty clever or the buyer is really stupid.
And gets $488k
pretty clever? dude are you stupid? this is some shit a stoner would come up with to help their parents pay the mortgage 😂
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The sucker buyer needs to be willing to wait until they die before they can take possession. The cost of maintaining the house will exceed the rent of $417. It's a legal scam.
100%
And believe it or not, there will be a sucker that will buy it ! They're there lined up to see it already !!! 😎
It's not a scam. It's just a bad deal.
The buyer might expedite the renter's end of lease.
@@Bread996A bad deal that requires a sucker = scam.
A half million dollars for an eleven hundred square foot house doesn't seem like such a bargain even if you could move right in. What does a cardboard box sell for in San Francisco?
Cardboard 20k+ but may increase to 25k+ after new years, get it now
But the house always maintains its value
@@rainacherienne1010let’s see if people can still afford living in California by year 2053
@@MB-we4dx Why not, they’ll just need to buy a smaller sq ft cardboard, maybe like 1 ft sq and put it over their head when it rains.
Ill take it but i refuse to pay until 2103
😂😂
🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣
The rent being charged will not come anywhere close to what the buyer has to pay in property taxes and mortgage.
Too risky, there’s other costs associated with owning property that a meager $417 won’t cover. Not to mention, a lot can happen in 30 years.
Absolutely
If you account for inflation its basically a 3.5M dollar home with 30 years of wear and tear that you have to pay for. Because that 488k would be about $4M properly invested in 2053 while it would be about 1M inflation adjusted so you are paying 3M in loss of possible investment gains and 488k for your principal then you need to add in all the rehab costs for 30 years of wear and tear on top of that. I wouldnt do it
With crimes, homelessness, drug users and taxes, California cities are turning into the next Detroit. Houses and neighborhoods become abandoned. The housing markets is going downward not upward.
$417/mo won't even cover the property taxes
@@SafeEffective-ls2pl And insurance which keeps rising every year!
$417 dollars for rent is wild specially because you’re not accounting the inflation 30 years from now
30 years? I have already gone from this planet
😂😂 what a weird case in America .
Stay out of Cali yes I’m in Cali to this happens in stupid ass cali
Same
Good
Skill issues.
I wish my rent was $415
I used to pay rent for $400ish a month, many moons ago.
I will settle for even double that!
I pay that but with roomies lol I don’t mind
I pay 700 I love at home with my family. It's bank greed. It's no longer black people getting redlined. Btw it's also the people who invest in the area I have nothing against Asians. But I know a few who buy areas of land. Houses flip them. Sell them to their friends lol😂 🤧 more like Patsys. Rinse repeat. Make the area nicer. Then you have places where all the people are renters. And because of all the culuding before. That first person who owned the house is one city counsel.😂😂😂😂😂😂😂 It's not just Asians btw. Thought you will notice if you go to an Asian store. Like the ones in the malls. No not like mall malls but more than just a super market and fast food joint. They are own by the same people they all cousins funn😂😂😂😢😢😢😢 it's kind of a pyramid scheme no one talks about
One of my friends lives in an apartment like that. It was even simpler when he was still married. The single bedroom apartments in the city are already crossing $1,000 a month, its such a better deal.
It's like buying into a timeshare & never using it.
Sad how $488k back in the 90s was considered expensive.
Not to mention it was a much better place to live in those days.
Yup, remember the kid in the movie Blank Check bought that mansion for $250K 🤣
It's still considered expensive to me ha
So u have it now? Doofus
@@MariaMaria-sr8zgto a majority
$417 for rent 30 years god damn what i gotta do for a deal like that..
what makes this deal so outrageous is the $417 current rent. Not only is that more appropriate to a property selling for about 50k - 80k, if that amount stays fixed for thirty years it won't be enough to pay the property taxes or pay for basic upkeep.
Anybody buying this property today will be feeding a negative cashflow for the next thirty years (or until the current tenant passes away, which may or may not happen anytime soon, we don't know anything about the person) in the faint hopes of cashing in big decades from now.
No, it's not the outrageous thing is you can't own it and use it until 2053. There's ways of getting that tenant out. But you can't move in is basically waiting until the seller dies and then you get it at no more use to him.
@@shipwreck8847 you don't know anything about real estate. Inflation in over 30 years will screw you over. Once you own that home in 30 years you will pay a supplementary tax and it will not be pretty along with the property tax. Oh wait SF is known for earthquakes so if there's one major earthquake your investment is gone.
@@wittypoker stfu you idiot. i own several homes. i own more than you. just stfu. you're basically giving them a free loan. that's the thing.
A website said the property's tax is $17K. Let's assume it's $5K for maintenance, which I think is fair. Lets assume $2K in home owners insurance and $2K for contingencies. So, expected cost for the property is about $27K per year. Purchase price is about $500K, but actual value without that tenant restriction is $1.4 million. Average annual appreciation for the house is probably about 8%. So the house appreciates $100K per year and annual cost is $27K (if you pay cash). It could make sense if you have enough cash on hand, and are really patient.
But aren’t housing prices in the United States already on the rise? Is it worthy of long-term investment? It seems like this is fake news?
It would make sense as an investment to a lot of people. It's just that the brokies can't figure it out / afford it. That's why its an issue.
@@mqrkoh Currently, real estate agents are very profitable, and their income is more stable than the stock market
The deal breaker is really the low rental. That wont even cover the usual annual repairs. Project home owners insurance, repairs rewiring etc over 30 years. This is no deal! It is subsidising another persons lifestyle at your expense.
Well said! I didn’t even think about that! Thirty years is a very long time for this so called investment
Nevermind the repairs costs, property tax will be really high. At $500,000, this will be at least $6,000 a year in property taxes.
@edwoo1005 the property tax assessment is a lot higher
Taxes will be way more
@@yolyprog2561yet you have a 401k
Years ago, there was a very interesting story like this in France. A man in his 40s bought a home from a woman in her 90s. He got it a little cheaper, but there was only one condition: he had to wait until she died. No problem, right, she should kick the bucket at any moment. She lived past 120 and he died before her! This, along with me preferring to just invest my money, is why I’d never go for a deal like this. Who the heck knows what’s life going to be like 30 years from now. 30 years from now, $488K in a fund matching the S&P 500 would be $8.5 million! I’d never do this.
Yes, me too. The value preservation effect is obvious only when the house is bought very early. Otherwise, it is better to make some related investments
The fact that anyone showed up for this shit shows you how hard the fall will be.
And it's a-comin.
Crash bro!!!
if you want to avoid a market crash just increase your potassium intake. Simple.
@@jesusdiaz9176a banana a day keeps the crash away.
Look around you, 80% of society took the Cl0tShots for a free D0nut, there's plenty of morons to go around these days. Unvaxxed Chad checking in.
😂 Yeah because it can't be that area of California is desirable right ?
yes, the home is going through family issues, the original owner made sure that part of his family has a place to live in after they pass away, the other part of the family wants to sell it because they don't want to pay the property taxes and just get their share. whoever purchases this house will have to look at it as a 30 year investment property- it is an interesting but sad story. personally I wouldn't touch this home with a ten foot pole, but I am sure someone will buy it.
yes
The rent doesn’t even cover real estate taxes. Pay $500k and then lose $ for another 30 years. The only buyer is the Mob 😂.
I mean the new owner could take a mortgage out on the house for triple what they paid for this house, use that money to buy up more property and rentals. They also get 144k in "rent" over the years. So its not a complete loss.
@@coreytrevor3910 wow that is what most of us missed. Thank you for explaining.
Or the government.
@coreytrevor3910 Bank wont lend much though bc of the fixed 30 year lease with no rent increase.
The mob or any company with cheap loans indirectly fueled by all the QE from Covid.
Who would buy a house occupied by a tenant paying such a low rent, especially when you wouldn't be able to move in until 2053, if you are still alive? It makes no sense!
its called a rental property which is what i do. this property as a market value of 2.3 million so its a great investment!
hedgefunds with cash to spare will buy it 30 years itll be probably 6 million or something
Tenant mysterious goes missing LOL
Exactly what I was thinking. Happens all time 🤷🏻♂️
😮😂
I think I get it. It’s actually quite clever and savvy. I’m interested to see if more people come up with this plan, to keep the banks from profiting. It’s essentially a reverse mortgage to a person rather than a bank.
I wrote the same thing but you phrased it much better. Bingo and spot on.
Yes, genious. Probably nobody wants to buy the property, which is the owner wanted.
Seems lile a Rent to own scam, you pay rent for 30 years and then its yours IF you even make it 30 years! By then who would have replaced the roof and kept up with the maintenance??...I would not go for it!
@@jose09841 even if the property was inhabitable, the land alone will be worth double in 30 years from now.
@@bbmak0the average price of a house is 2 million
They’re probably older and don’t want to move
Houses don’t stay on the market long in SF
very smart to avoid property tax.
yes
And what are the odds an earthquake doesn't bring it down in the next three decades?
Poor tenant is gonna go missing as soon as the new owner takes over. Sad sad 😔 I’d move. It’s not worth your life.
I looked up the tax history and taxes went from 1,700 in 2022 to 17,000 in 2023 no wonder it’s for sale the rent at $417 a month needs to be at 1,417 just to pay the taxes lol wow 🤯 ok now I understand rent control and tenants protection and all but this is highway robbery and unfair to the owners!
Who has not experienced rent increases in one way shape or from in the us to make it ok for this individual to continue paying 1920’s rent price in 2023 come on!
biden tax hike!
ah yes isnt it nice when democrats have finally ruined everything
How did the tax jump thousands in just 1 year? Usually taxes go up about $1K a year. Unless lots of work was done to the home, which I highly doubt, it does t make sense. This whole thing is weird lol horrible buy
It's a unique juxtaposition. Usually the tenants are the ones being exploited. Now it's the other way around. That is, if anyone makes the purchase. I don't think anyone will unless they can evict the tenant.
@@Sweetheartbabez maybe prop 13? since property taxes in cali are pegged to a 2% increase each year (i think) to the original value of the home, if it was sold, the property would have been reevaluated resulting in such a high increase.
what is the average property tax a year in that location....?
Let's see who's dumb enough to purchase this property.. 😂
If my son was born today, I would buy it. But the time he is 30 he would own the house free and clear. $488k is a steal at that location.
@@jml9550yep.
Investment companies. They have billions. This is a drop in the bucket.
Who’s dumb enough to buy a house in San Francisco?
I'm sure after the Americans are ethnically and culturally replaced it will be productive again.
To all the buyers willing to do this:
I have some ocean front property in Arizona. From the front porch, you can see the sea. It is so pretty. $488,000.
Bonus- you can take possession in 30 days. Before that time, I'm taking a trip to Costa Rica. 😮
I've got some bridges in NY for them as well!
I hear Arizona has such beautiful beaches - sand further than the eye can see
@@megsley😂😂
Trip to Nigeria.
Some corporations buy so many houses, and an individual decides to play a different game. I hope this story keeps getting updated because I genuinely want to know who buys this and why.
Considering it’s in Russian Hill, the actual value of the home is probably 3-4 million. In 2053 it’ll probably be around 7million or higher.
Buy the house 488k and wait 29 years and sell it for 7million?
It’s actually a great idea for the seller, who clearly represents the interest of the tenant. If they don’t need capital, and can lock in 30yrs of shelter with ZERO inflation over THIRTY years - this is actually brilliant.
Oh that one tenant? You honestly think this is legit 😆 the owner truly cares about the tenant? A tenant? Who's this tenant honestly? The owner?
@@aimesdavid2800 "Former male owner, over 100 years old died by natural cause in home" according to the listing. The tennant is probably a son or daughter.
@Bread996 that's total cool. I'd definitely not buy it. It's still stupid for whomever buys it.
it's a scam, bro.
@Bread996 or his sugar baby who's like 80 🤣🤣
Someone bought it in July for the asking price! Less than a month after this story was reported. I guess someone thought they were getting a good deal. Not me.
What a terrible investment! $400 rent for 30 years is not even near the amount of property taxes the new owner will have to pay over the course that 30 years. Not only that, San Francisco has historically had earthquakes and fires, so the home may not even be standing after 30 years
Buyer could drop dead in 2 years 🙄
I was just thinking the exact same thing....lol
Tenant could drop dead in 2 years 🎉
There is something called a trust and will.
Why can not the owner opt for owner move-in evictions?
There won’t be anything left in 30 years…
What do houses in the area typically go for?
By law, the new owner can evict the tenant if it’ll be the owner’s primary residence. Doesn’t matter what the current tenants lease is but dealing with the SF eviction court is going probably be a long and annoying process.
Not on this one, Ellis Act doesn't apply, trust me if you could Ellis Act, this would have been sold over a 1million, Basically, the way the contract is written tenants own the place until 2053 and then ownership rights revert back to the title holder.
@@futurethinking there Might be ways around it. I have heard of similar things in the past. But, after Lengthily Court battles back and forth. The Buyer won in them, since it was just not possible to have Legal Lease Span over a certain amount of years.
no shot or it would have sold in ten minutes.
The only way I can see this working is if parking costs more than the mortgage, and that's a 2 car garage that house has; and the new owner can have use of both parking spaces. Or if the new owner can get a permit from the city to add an addition and make it a two family somehow to either live there or rent out at market rate to offset the cost. If not, it's a terrible arrangement. If the landlord pays the water bill in CA, that alone can come to $400/month. Add the taxes, mortgage upkeep of the place, home owners insurance, whether or not this house needs a new roof, etc; and this new owner will be paying this tenant to live there. *NO!* 👎🏾😞
I just saw that there's an HOA as well??? Absolutely NOT!
It's like a cash out option of a reverse mortgage.
What are you talking about.
The comments show a lot of financial illiteracy. I penciled this out as a buyer and with 20% down and a 7% interest rate, I got to a roughly annual return of 11.5-12.5% if you sold the house after 30 years depending on how aggressive you want to be with appreciation of the asset. (This includes a reasonable estimate of your expenses as a homeowner, like property taxes, insurance and upkeep.) Obviously, an investment with a 12% annual return is an attractive one in a vacuum and that would increase even more over time if you kept the house and lived there. Probably worth the financial risk
However, as an investment to buy now and sell as soon as you can, this is probably not worth it. 11.5-12.5% would likely beat large ETFs over 30 years, but not by that much. Neighborhoods and cities can completely transform over 30 years so there is tremendous risk in assuming steady appreciation of value of a house. Unless you want to live in this house and are comfortable rolling the dice that the neighborhood may be different than when you buy in, you're betting off taking you $100K and buying index funds.
The rent wouldn’t even cover taxes
Home was last sold in 1968, this is a family member or someone close to the deceased owner that had the original owner write up a tenant lease before they passed, more then likely had an attorney that deals with tenant leases write it up to make sure it can't be broken.
Even if the house is being sold at 1/3 the price, for something you can't do anything with, but still have to keep up the maintenance for a yearly lost of probably around 15K a year (from taxes, maintenance, insurance, etc. minus the 5K a year in rent), its not worth it. Unless you think the house is going to be worth over 7.5 million dollars after 30 years, and you have the patience of a saint to wait 30 years before you can get anything on your investment, and nothing happens to the house in those 30 years, there's no way it makes sense.
This is a super long game plan type purchase, that is taking a huge risk, that doesn't match the return.
This is basically a subsidy to the tenant (probably the owner). You take on all the risk, and reap no rewards for 30 years.
Yup. the owner wants to live there until they die, not pay a dime on the upkeep, & profit from the sell to keep have spending money. Just wait it out the owner is broke.
Who is responsible for taxes, upkeep, insurance, etc?
I would buy it and by the time of turn over, it would be worth millions, and time for me to retire.
But i'd also make a will that in case i'd die, i'd give it to my kids and do whatever they wanna do with it.
At least by then, it would be worth millions like it is today.
Take that same amount of money. Hire an investment advisor. I can guarantee you'll get much more in return for your investment in 30 years. Take some of that money and buy a nice home of your choice for your retirement.
Or it could be worth nothing. 30 years is a long time and many things could happen during that time…especially in California where everything is getting worse faster than the rest of the US…except for maybe NYC. The house could also be lost to an earthquake, a fire, or something else too. Unless you have the money to throw away….it wouldn’t really be worth it…a lot could happen in 30 years. Of course the tenant could always pass away before the 30 years….or the person buying it could pass away….you can never plan for the future because everything changes before you get there.
Ppl getting smart AF 😂
If you account for inflation its basically a 3.5M dollar home with 30 years of wear and tear that you have to pay for. Because that 488k would be about $4M properly invested in 2053 while it would be about 1M inflation adjusted so you are paying 3M in loss of possible investment gains and 488k for your principal then you need to add in all the rehab costs for 30 years of wear and tear on top of that.
I rather park that money in a s and p 500 fund for 30 years, way less risk and no work
Wouldn't the county tax it at its assessed value once the sale is made, which is probably several million dollars.
I hear criticisms of this situation and I want to mention three points: first the current owner can do what he wants with his property including bound it to a rental agreement. The assumption is that the owner wants to sell and stay in the property, then set his own rental price, but we don't know if that is the case. Its very possible that its an elderly relative or even a family member with disabilities that the owner wants to be taken care of for the remainder of their life. Second, this offer is not as unreasonable as it seems. The seller is selling the property for a fraction of the price and is basically saying " I will sell the property at a huge discount, and the rest of the properties value will be payed over 30 years to the tenant in the form of lower rent. Third, someone may ask why a buyer would agree to this? Because its a house that upon sale will have millions in built in home equity from day one of ownership. Yes, its now an investment property that would be hard to sell, but a savvy investor buys it, has a tiny mortgage (compared to the actual home value) , then takes out a large home equity loan (pays no taxes on that loan) and purchases a second property with those funds. That is how the rich make money in real-estate.
The state needs to strip SF of their zoning powers. If there are 100 people willing to pay half a million for an 1,100 sq ft house, then there should be construction crews building tens of thousands of more homes in that neighborhood. The only reason there isn't is because of racist laws from the 1950s that ban building more homes. And SF thinks of themselves as a progressive city. It's egregiously ironic.
Will once you buy couldn't you set new rules I mean you bought it already so it wouldn't be there's? To say when to move in if it's not being rented? Only renting could set move in dates ?
What happens if the tenants die? Buyer hits jackpot? Sounds like a horror movie in the making. Criminally minded buyer purchases it and tries to drive out the tenant (use your imagination)....if I was the tenant I would be constantly looking over my shoulder.
Stop giving out my plan
Exactly… Not even worth it for the tenant…. He’d be living in fear every single day, bullseye on his back, next 30 years…
Or the buyer! The buyer ain't safe either! I would be afraid and looking over my shoulder
@@MeEncantaKiley lol I'd speed up the process! Id expedite the expiration rate. Nothing ever belongs to anybody at one point we all crumble into dust anyways just giving them some help.
@@rrrealqueen Yeah in fact that should just apply anywhere.
so the house would end up standing u at around $333,000 if rent 417 a month. but in the 30 year how many repairs and maintenance?
That’s beyond ridiculous who in their right mind would want to buy a place they can’t move into for 30 flipping years 🤬🤦🏼♀️
Not worth the hassle!
I wouldn't buy it. Heck, if I owned the home and I planned to retire in San Francisco in this home but needed some extra cash, I might sell it this way. For $417 per month in fixed rent for 29 years I get $488,000 to boot. The ultimate in rent control. If the roof starts leaking or the water heater needs replacing, I just call my landlord and they'll fix it. That responsibility is lifted. One problem is what happens if the new owner or the tenant dies before 2053. Can the tenant then just let another tenant take over? As far as the owner dying, does the home immediately go to the tenant without waiting until 2053? If so, the owner might need to make sure the tenant doesn't have other ideas. :/
This must be how Conner McCloud passed down his own property to himself over the last 400 years.....
$400 rent in SF in 2024 is the real shocker! 😂
So what happens if the Tenant moves out or dies? Like within months after buying the home?
How in the hell does he get a deal like that, someone fucked up.
Exactly
Family member
@@SafeEffective-ls2pl Why can not the owner opt for owner move-in evictions?
@@567307 because tenant hasn't rented the property, it legally has purchased the right of ownership for 30 years for 480$ a month. You really can't evict them in anyway and you can't break that contract.
How much do the taxes add up to over 30 years?
The move in date is 30 years from now because that's how long it will take to remove the squatters.
It would be hard to get a 30-year mortgage on that because the rent is too low and everything else it doesn't calculate out ! They would have to sell it for like $100,000 . Doesn't matter how many people look at it unless they're going to pay cash there's no way they could sell it for that .
waiting 30 years for a slanted house without a backyard is stup!d work… but hey, if you wanna invest into a home for your newborn, why not…
What if the tenant dies unexpectedly? Like in a car crash. Would the buyer get the house immediately after?
Hate to see what San Francisco will look like in 30 years
💩
Crazy part is there will definitely be some idiot who'll think this is a good deal and buy it. Who knows what'll happen to that house in 30years, it could become so brutally distressed that it'd require a whole new build ontop.
come with a squatter..... LMAO
In case anyone stumbles upon this several months later like I did, the house did in fact sell for the asking price a month after this video.
That rent won't even cover the real estate tax😂😂
No sane person is going to pay half a million dollars for this house with this restriction to only collect $180,000 in rent over the 30 years.
@@Angelmndy But if you wanted an investment house you would make far more money if you bought an unoccupied (full priced) home and rented it at market rent, then sell it in 20-30 years
@@Angelmndy 500k discount but losing way more than that over 30 years in uncollected rent isn't value.
@Angelmndy yea but you need to factor everything in including opportunity cost,time, and all expenses not to mention there is no payoff for 30 years.
@@Angelmndy i just think there is no way you're coming out ahead vs just throwing money in index funds. this is just a pure headache.
@@Angelmndy A house like that, would have a rent around $10k a month, in the current market in that area. And would be looking at pulling in a total rent of around $5 million in 30 years after rent increases every year or two (assuming home values continue to go up at the current rate).
Some people are thinking that this is a scam. I think this is the family home of the person living in it now. The parents probably bought that house many decades ago for between 25k and 40k and were grandfathered into the 1970s property tax protection. That protection doesn't exist anymore and when the owners who had the house when the tax protection law went into effect die, the taxes go up to the assessed value. This means that inheritors have to sell because they can't afford the outrageous property tax on a house that is currently assessed in the millions... and can't afford to rent elsewhere in SF either. I'll bet whoever is living in that house doesn't want to leave and tried to come up with a way to stay in it. Under 500k is incredibly cheap for that house. However, paying property taxes plus waiting 30 years to be able to sell doesn't seem like that good a deal as the US economy is going to crash and burn long before 2054. I find the idea interesting, though. My parents bought a huge 1923 house three blocks from the beach in Southern California in 1967 for 38k. My mother has been able to continue living in that house (90 years old now) because of the 1970s property tax law that she's grandfathered into). When she passes on, my brother, sister and I can't keep the house because we'd have to pay property taxes on a house that is now assessed at 7 million. I'd rather have the house than the money. Bad deal.
So, buy the house, release a bunch of pests and get it condemned. Renter has to move out, fix the issue and it’s yours again
if you’re 1 yr old and bought that that house today its not too bad if you move in to your own house at 31 yrs old. think about it.
I didn't realize it was "cheap" until they said something about it being cheap. I just bought my 1900 sqft tri level for 240k with a 500 sqft outside building and 1.5 car detached concrete garage. 500K would be a massive house around me, and I live in a small city, not the middle of nowhere.
Basically the renter is paying the property taxes (just a general guess, I don't know the actual amount) so the buyer gets zero out of it for 30 years. A lot can happen in 30 years.
I suspect the property tax is significantly higher than 5k per year. I paid 30% more than that for my house in the 10th largest city of an east coast state, just this year. Nevermind what it will be in 30 years.
@@THEhorihito Yeah you are probably right. It occurred to me that there was a good possibility that it could be higher than that but I just made a guess.
@@212days According to the SF Assessor's office, the property tax was $1,692.75 last year.
Land Value $55,466.00
Structure Value $87,686.00
Tax Rate 1.182484%
@@RaymondHng Yeah that sounds right.
Land value $55K and house value $87K... when the house was last sold 40 or 50 years ago or something. GOOD LUCK on the next person who buys the house (if anyone does) paying $1700 a year in taxes.
@@212days the new tax for $488,000 will be about $5,770.xx and only if county allows
Another thing to consider is with all of the insurance carriers pulling out of California and/or dropping policies for various reasons such as homes that are too close to one another, good luck getting insurance on that.
Could actually pencil out for the right buyer… you get $400/mo cash flow guaranteed and an asset worth maybe $1.5m now, and maybe $4-5m in 30 years. It would ultimately have to be for the benefit of the buyer’s estate (children, relatives, etc) given the timeline.
BUT… if the current tenant dies, or otherwise disinhabits the residence, there may be a maturation clause that would permit early possession.
If you have the doe to drop and not blink an eye, it’s investable.
Absolutely correct
Couldn't the new owner just use an Ellis Act eviction(out of business) and pay out the renter? They just can't rent it out for a period of 5 years for owner move-in eviction.
There's 2 current tenants in their 80s and 60s.
@@567307 you can't Ellis Act this one, tenant essentially owns it for 30 years.
The tenant (s) (probably the current owner) will be occupying the property for the next 30 years. They will only be paying $417 in rent monthly. The buyer will not be able to live in the house for the next 30 years. The buyer will have to pay the property taxes and utilities for the house out of their pocket. The buyer will be responsible for repairs and upkeep of the property. Meanwhile, the tenant gets to live in the house practically for free.
$417 dollars a month is rent for a home like that is outrageous! How can they afford to fix anything should some thing go wrong!
Insane.
What if the tenant mysteriously passes away, can the buyer move in then after?
Reverse mortgage privatized. Its not a "sloppy arrangement" its a wise arrangement to keep the wolfs away....😂😂 For an investor who looks at long term gain rather then instant gradiafication this is a gold mine that can be handled down to his her legacy. Pretty sure a corporation wont think twice about this one. I honor the person living their being able to feel secure.🙏🏾
Can anyone explain how you get 3 Bedrooms in 1100 sq feet?????
who would want to live in San Francisco? No thanks!!
Update someone bought it why no idea. Property tax for the property is $16,928 and in 20 years that's about $338,560 and not including maintenance. So that means $488,000 property cost + $338,560 20 years tax= $ 826,560 < not including repair the house next door is worth 1 million that's not really helping.
$417!? That's either a blatant lie, or that person got the deal of a lifetime
I don’t understand how people don’t see the value in this as a long term investment. This was almost certainly bought by a wealthy investor or private equity group.
They just bought the home for a third of its value. Assuming taxes of about 17k a year, and a couple hundred thousand in miscellaneous repair costs, that is about $710k. Let’s add another 100k for various insurance etc. Ok, that’s $810k they’ll pay for 30 years. Yes, yes, I realize property taxes will slowly climb, so add another $100k. $910k let’s call it.
The tenant paid $150k in rent for that time.
So all told the buyer will have paid about $760k, plus the initial $488k, so $1,248,000.
Still less than the market value when it was initially bought.
What do you think the value will be at in 30 years? A nice townhouse IN San Francisco? 3 million? 5 million?
Either way, the savvy buyer gets a nice payout as they retire themselves. Likely a couple million. Amongst their hundreds of other long term investments.
Will the tenants pay the new owners rent or do they continue to pay the current/previous owners?
the seller is basically an option trader
That's interesting, so you'd be buying purely a speculative investment that you'd be hoping to eventually sell to another person for more, enough so that it's worth it to pay the expenses on the house in the meantime. There's probably a number where that makes sense, dunno if it's 400k though.