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Inside a $1 million fixer-upper listing for sale across the bay from San Francisco that might actually turn out to be a bargain
Inside a $1 million fixer-upper listing for sale across the bay from San Francisco that might actually turn out to be a bargain
Katie CanalesJan 26, 2020, 19:27 IST
Courtesy of Kevin Cunningham of Red Oak RealtyThe home is no longer tagged with graffiti.
A century-old dilapidated home atop a 6,450 square-foot lot in Oakland - a city just east across the bay from San Francisco - is for sale for $1 million.
"Fixer-uppers" selling for millions isn't new in the Bay Area, but this listing is more of a bargain since it includes city-approved plans to build five units. All the buyer has to do is purchase building permits.
The property sits in West Oakland, near a train station that is merely one stop away from San Francisco.
In a region with a housing shortage, and a demand for housing close to transit, the additional units would likely be welcome.
Seeing the descriptor of 'fixer-upper,' paired with a million-dollar price tag, in not exactly uncommon in the San Francisco Bay Area's real estate market.
The demand for housing is so great, and prospective buyers' pockets are so deep, that inconsequential details like fire damage and outdated plumbing don't put off some home hunters.
But a stretch of land across the bay in West Oakland with a 960-square-foot, century-old dilapidated, yet historically relevant, Victorian home is more than a mere fixer-upper. It's more of a development project, listing agent Kevin Cunningham of Red Oak Realty told Business Insider. The listing at 1818 Adeline Street comes with city-approved architectural plans to build out the lot into five housing units total, two of which would be apart of the existing Victorian structure.
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The ability to add five new housing units is a minor miracle in the San Francisco Bay Area, with its limited housing stock and growing population. San Francisco may make headlines the most often for its influx of professionals and for the city's myriad reasons for not being able to keep up with housing demand, but the effects are most certainly felt in Oakland and other Bay Area cities as well. There are many that live in Oakland and commute into San Francisco for work to avoid the city's sky-high rent.
And with the listing's location being near a BART station, the Bay Area's regional train system, it will likely attract workers looking to do just that.
If the prospective buyer pays $988,000 - working out to about $200,000 per future unit before development costs - they'll have an opportunity to develop housing units to lease out that could then provide a nice revenue stream.
All of which is to say, this isn't your run-of-the-mill, multi-million-dollar San Francisco Bay Area fixer-upper. This is more of a bargain, at least for those with the resources to pay to develop it.
"It seems pretty reasonable for whoever wants to get in and get going at it," Cunningham said.
The listing at 1818 Adeline in West Oakland is "shovel-ready," according to Cunningham.
The property sits in West Oakland. The lot is specifically located in the heart of the residential district on a semi-main street with a large park nearby.
It's also close to a West Oakland BART station, which is just one stop away from San Francisco's Embarcadero station across the water.
The property has been in the owner's family for 60 years. He would rather develop the property himself, but Cunningham said at this point he's selling for personal reasons.
"It's just kind of in that in-between space where the traditional sort of fixer-flipper market, it's too big of a project for them but not big enough for the bigger developers like Lennar or Toll Brothers or whoever else," Cunningham said.
The city-approved plans detail that the existing 1890 house will be lifted up and inched over to make way for the three townhomes that will be built beside it. There will also be a second unit built beneath the Victorian home.
The seller has already taken the painstaking route of getting the approved plans from the city, which is not an easy feat in the Bay Area.
Now comes the part of waiting for somebody who can take the plans and execute them.
"Everything has been done except for paying for the building permits and getting started with the actual building process," Cunningham said.
The owner had originally planned to live onsite in the very back unit. So that one is the nicest of the bunch, with a full rooftop deck on the top and a private yard and detached garage space.
Cunningham said a ballpark estimate for the value of the five units collectively would be about $3.7 million once it's all said and done.
The home is in what Cunningham calls an "opportunity zone." The full tax benefits of the zone pertain more so to rentals than to resale.
"So to kind of capitalize on the opportunity zone, it would sort of be best for somebody, whoever does the development, to rent it out," Cunningham said.
Most of the prospective buyers would be thinking along the lines of splitting it up into five units and leasing them individually, but just because there are plans included in the listing doesn't mean future buyers have to follow through with them. Cunningham said they could certainly change it up.
"I've heard a couple of potential buyers talk about trying to get a demolition exception and not save the existing house and just tear it down and start over," he said. But he said that may not be a possibility since the home, a Victorian built in 1890, has a minor historical designation to it.
The home has those "good redwood bones" that are virtually extinct nowadays (redwood trees are native to California, but its supply was swallowed up by home building use until the 1960s and 1970s when conservationists stepped in.)
Cunningham said it would be a shame to lose to the home, especially since the city approving the plans partly hinged on the fact that it would be maintained — originally, only four units were outlined to sit on the lot until the city granted a variance to go up to five.
As far as how potential buyers are responding, Cunningham said he's getting calls regarding the listing every day, so he's cautiously optimistic. "We're hoping with the spring market picking back up, we'll find somebody," he said.
