Here’s the story of how we helped our client sell an investment rental income property in Bernal Heights, San Francisco, for six figures above the buyer's original offer!
Selling a home in San Francisco is a detailed and deeply personal process. Selling an investment rental income property in San Francisco even more so, with added complications like tenants’ rights and COPA restrictions to consider.
Are you are thinking of selling your San Francisco investment rental? Is it wrong to assume you want to work with a top San Francisco listing agent with experience in all the laws and issues affecting tenant-occupied housing?
Learn more about our San Francisco listing agent experts and boutique team, Vivre Real Estate. And read on for how we helped our client get the most from the sale of their San Francisco investment rental property!
The story begins on a charming block of Bernal Heights, San Francisco, with our subject property at 74 Gladys Street. Our client owned this three-unit building for decades. First it was an investment rental property, and later a home and a launching pad for their adult children after college. (You can see how the flexibility for income and owner-occupancy is a big selling point!)
There are many reasons why the owner of a San Francisco investment property might choose to sell it. A change in investment strategy, favorable market conditions, or an endless assortment of personal reasons, to name a few. Our client was nearing retirement age and wanted a new property closer to their home that would be easier for them to manage.
The seller was referred to us by their family member who is also a real estate agent. This agent doesn't work in Bernal Heights and wanted a local expert to help them. She found Danielle Lazier Vivre Real Estate Agents because I had recently sold another income property in the neighborhood and got a good price for the listing.
In the case of 74 Gladys Street, pricing and timing were everything.
After a strong seller’s market throughout 2021, we entered 2022 with the San Francisco real estate landscape largely unchanged.
Demand is high, and San Francisco home buyers and investors are looking for real estate to purchase. On the other hand, supply has been extremely low for going on two years. To capitalize on these market conditions, we knew the goal was to list our client’s San Francisco investment rental income property ASAP.
In the San Francisco real estate market, pricing is your #1 marketing tool. The listing price is the first thing people see. It can draw in potential buyers, or turn them away. For 74 Gladys Street, we strategically targeted a listing price that would get noticed and encourage multiple offers.
As we mentioned above, selling a San Francisco investment rental property is complicated. You need an agent who understands the various laws and issues that affect tenant-occupied properties.
Tenants’ rights are well-established and enforced in California, and San Francisco is further subject to the Community Opportunity to Purchase Act (COPA) for multi-family properties of three or more units. Throughout the process of selling your San Francisco investment property, it is critical that you follow all the rules and procedures to remain protected.
Preparing and showing a multi-unit, tenant-occupied listing is also a delicate process. You always want an agent who is cooperative, who will not alienate your tenants in the process of selling. You certainly want the listing to show well and have buyers feel welcome when they are visiting. This takes finesse.
And of course, you want an agent with exceptional negotiating skills, a great network and a marketing plan tailored to your personal situation. For 74 Gladys Street, we brought it all together in a thoughtful process that kept tenants happy and allowed buyers as much access as possible.
This Bernal Heights triplex was an interesting situation. The seller knew of at least one interested buyer even before we hit the market. However, when the goal is to achieve the highest possible sales price, it’s important for buyers to compete.
Rather than entertaining off-market offers, we encouraged our client to list their property on the MLS and let this buyer compete with the general public to get the best possible sales price. It ended up working out really well for the seller!
That same initial buyer was ultimately the winning offer who bought the building. The well-located Bernal Heights triplex was a perfect fit for the buyer’s situation. However, they did pay $200,000 more than they originally planned because of the competition from other buyers.
After two weeks on the market and multiple open houses, seven offers were received on our offer date. We did three rounds of negotiations to arrive at a sales price that was $377,000 higher than the asking price, and $75,000 more than the initial highest offer that we received.
What's key here is that the winning offer came up an additional $200,000 to go from fourth place to the top. As the listing agent, I knew the buyers' different motivations. I was able to make sure that the seller did not leave money on the table. In the end, via my negotiations, the seller earned way more than they would have otherwise.
I hope this case study on selling a San Francisco investment property has been helpful or inspiring in some way! If you have questions about the San Francisco real estate market, the process of selling a multi-unit, tenant-occupied duplex, triplex or other investment property—or anything else real estate-related!—we’re always here to help and grateful for your business and referrals.
Our team is made up of experienced, full-time real estate advisors and marketing professionals who know the ins-and-outs of our unique San Francisco real estate market. After 800+ sales and going on $1 billion in sales volume, we’ve just about seen it all!
When the time comes that you need trusted real estate advice, please feel free to contact us any time, or share some details on your situation by filling out our buyer worksheet or seller worksheet.
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