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SF SOMA 12-Plex - RARE RENT CONTROL EXEMPT OPPORTUNITY
š Address: 388 5th Street, San Francisco, CA
š° Price: $3,250,000 ($270,833/unit)
š¢ Property: 12 Units (6x 3BR, 6x 2BR), Built 1909
š¦ Cap Rate: 6.3% Current | Unlimited Rent Increases: EXEMPT from SF Rent Control
Why This is a Great Investment:
This SOMA property offers a rare unicorn - complete exemption from San Francisco rent control due to its 1909 construction (pre-1979). While normal SF properties are limited to 60% of CPI annually, this building allows unlimited rent increases. With current rents $200K+ below market and a prime SOMA location, this represents exceptional long-term value creation in America's most tenant-friendly city.
The rent control exemption alone is worth $500K+ in additional value versus comparable controlled buildings.
Current Performance š
Investment Metrics (25% Down) | |
|---|---|
Purchase Price | $3,250,000 |
Down Payment | $812,500 |
Purchase Costs | $97,500 |
Total Cash Required | $910,000 |
Current NOI | $204,348/year |
Current Cash Flow | $4,740/year |
Current Cash-on-Cash | 0.6% |
The Rent Control Exemption Advantage š
Normal SF Building vs This Property | |
|---|---|
Typical SF Annual Increase Limit | 60% of CPI (~2-4%) |
This Property Increase Limit | UNLIMITED |
Current Average Rent | $2,274/unit |
Market Rent Potential | $4,500/unit |
Annual Income Upside | $200,000+ |
Market Rent Analysis | |
|---|---|
Current 2BR Average | $2,183/month |
Market 2BR SOMA | $3,500-4,000/month |
Current 3BR Average | $2,365/month |
Market 3BR SOMA | $5,000-6,000/month |
Potential Gross Income | $540,000/year |
24-Month Stabilization Strategy š°
Year 1: Allowable Increases | |
|---|---|
Implement Legal Increases | $18,273 additional income |
Lease Vacant Unit 4 | $60,000 additional income |
New Annual Income | $380,000 |
New Cash Flow | $40,000/year |
Improved Cash-on-Cash | 4.4% |
Year 2-3: Natural Turnover | |
|---|---|
Turn 3-4 Units to Market | As leases expire naturally |
New Annual Income | $450,000 |
New NOI | $290,000 |
New Cash Flow | $90,000/year |
Cash-on-Cash | 9.9% |
5-Year Wealth Creation š
Conservative 5-Year Projections | |
|---|---|
Year 5 Gross Income | $520,000 |
Year 5 NOI | $338,000 |
Exit Cap Rate | 5.5% |
Projected Value | $6,145,454 |
Total Appreciation | $2,895,454 |
5-Year Cash Flow | $300,000 |
Total Return | $3,195,454 (393% on investment) |
Key Success Factors:
Soft-story retrofit completed (2018)
Prime SOMA location near tech offices
Rent control exemption provides unlimited upside
Patient capital strategy over 3-5 years
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It also highlights common mistakes, such as tax mistakes, that can make a substantial differ-ence as you plan your well-deserved future.
Point Loma Duplex - STR GOLDMINE WITH ADU DEVELOPMENT
š Address: 1980 Chatsworth Blvd, San Diego, CA 92107
š° Price: $2,150,000
š Property: Duplex (2x 2BR/1BA) on 8,342 SF Lot
š¦ Current Cap: 2.67% | With ADUs: 15%+ Cash-on-Cash Potential
Why This is a Great Investment:
Point Loma duplex with exceptional STR potential - but ONLY with ADU development! The existing duplex alone delivers terrible returns, but the 8,342 SF lot allows two additional ADUs that transform this into a 4-unit STR complex. This is a sophisticated play requiring $1M+ total investment and ADU development expertise.
Without the ADU strategy, walk away. With proper execution, this becomes a premium STR investment.
Current vs Developed Analysis š
Existing Duplex Performance | |
|---|---|
Current Rental Income | $57,600/year |
Operating Expenses | $21,500/year |
Current NOI | $36,100/year |
Current Cap Rate | 1.7% (Terrible) |
ADU Development Strategy š
Proposed ADU Construction | |
|---|---|
ADU #1: Large (2BR/2BA) | 1,300 SF @ $200/SF = $260,000 |
ADU #2: Studio+ | 550 SF @ $200/SF = $110,000 |
Permits/Design/Contingency | $40,000 |
Total Development Cost | $410,000 |
4-Unit STR Complex Projections | |
|---|---|
Main Units (2x) | $190/night Ć 70% Ć 2 = $97,090/year |
Large ADU | $250/night Ć 70% = $63,875/year |
Studio ADU | $125/night Ć 70% = $31,938/year |
Total STR Revenue | $192,903/year |
Total Investment Analysis š°
Complete Investment Requirements | |
|---|---|
Purchase Price | $2,150,000 |
Down Payment (25%) | $537,500 |
ADU Construction | $410,000 |
Furnishing/Setup | $60,000 |
Total Cash Required | $1,007,500 |
Stabilized Performance (Year 2+) | |
|---|---|
Optimized STR Revenue | $213,000/year |
Operating Expenses (32%) | $68,160/year |
NOI | $144,840/year |
Debt Service | $110,964/year |
Annual Cash Flow | $33,876 |
Cash-on-Cash | 3.4% |
5-Year Exit Strategy š
Development Value Creation | |
|---|---|
Year 5 STR Revenue | $230,000+ |
Year 5 NOI | $160,000 |
Exit Cap Rate | 6.0% |
Projected Value | $2,667,000 |
Total Appreciation | $517,000 |
5-Year Cash Flow | $150,000 |
Total Return | 67% over 5 years |
Critical Requirements:
Verify ADU permits obtainable before purchase
Experience with STR operations essential
Understand San Diego STR regulations
Have backup long-term rental strategy
San Diego 5-Plex - EXCEPTIONAL HOUSE HACK OPPORTUNITY
š Address: 4135-37 Chamoune Ave, San Diego, CA 92105
š° Price: $1,450,000
š Property: 5 Units (1x 2BR/1BA, 4x 1BR/1BA)
š¦ House Hack Returns: 27.7% Cash-on-Cash While Living FOR FREE
Why This is a Great Investment:
This is the holy grail of house hacking - you get PAID $1,008/month to live in San Diego while building massive equity! The 5-unit configuration with separate buildings provides privacy while generating exceptional returns. Live in one 1BR unit and collect $9,600/month from the other four units, creating a negative housing payment.
This represents house hacking perfection in an expensive market.
House Hack Analysis (15% Down Owner-Occupied) š
Investment Metrics | |
|---|---|
Purchase Price | $1,450,000 |
Down Payment (15%) | $217,500 |
Purchase Costs | $14,500 |
Total Cash Required | $232,000 |
Owner-Occupied Rate | 6.75% |
Monthly P&I | $7,998 |
Monthly Cash Flow Analysis š
Monthly Income (4 Units Rented) | |
|---|---|
Three 1BR Units | 3 Ć $2,200 = $6,600 |
One 2BR Unit | $3,000 |
Total Monthly Income | $9,600 |
Annual Income | $115,200 |
Monthly Expenses | |
|---|---|
Operating Expenses | $2,610/month |
Mortgage Payment | $7,998/month |
Net Monthly Position | -$1,008 |
You GET PAID $1,008/month to live | FREE HOUSING + $1,008 |
Compared to Renting š°
Housing Cost Comparison | |
|---|---|
Market Rent for 1BR | $2,200/month |
Your House Hack Payment | -$1,008/month (you get paid) |
Monthly Advantage | $3,208 |
Annual Benefit | $38,496 |
Total Annual Returns š
Annual Return Breakdown | |
|---|---|
Positive Cash Flow | $12,096 |
Housing Cost Savings | $26,400 |
Principal Paydown | $15,000 |
Tax Benefits | $10,000 |
Total Annual Return | $63,496 |
Cash-on-Cash Return | 27.4% |
5-Year Wealth Building Strategy šļø
Year 3: Move-Out Strategy | |
|---|---|
Rent Your Former Unit | $2,200/month |
Total Monthly Income | $11,800 |
Annual Cash Flow | $14,299 |
Property Now Cash Flows | While you live elsewhere |
5-Year Equity Growth | |
|---|---|
Principal Paydown | $75,000 |
Market Appreciation (3%/year) | $235,000 |
Forced Appreciation | $100,000 |
Total Equity Creation | $410,000 |
From $217,500 to $627,500 | 188% equity growth |
Risk Mitigation Factors š
Diversification Benefits | |
|---|---|
Income Units | 5 separate units |
Vacancy Buffer | 50% vacancy still covers mortgage |
Market Position | Below-market rents provide upside |
Location Stability | San Diego market fundamentals |
Exit Flexibility | Multiple strategies available |
Success Requirements:
Qualify for owner-occupied financing
Comfortable with landlord responsibilities
Plan for 2-year minimum occupancy
Understand property management basics
|
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