Saturday, September 22, 2007

Mill Valley TICs

Tired of the the urban dum and strang? Like to mountain bike? Looks like this 16-unit Mill Valley rental complex is transitioning to fractional ownership. In the $300,000 price range, at first glance these duplex units look like relatively good deals for buyers who are priced out of San Francisco. They are modest - just 550 aquare feet - but have a certain boxy modernist look. At least you get some outdoor space in the way of a small yard or patio, as well as all the public open space of Marin near by.

Note you will be living amidst renters until if and when the entire complex becomes owner occupied. Quick calculation - depending on the down payment buyers will be paying as much as $1,800 in a monthly mortgage to the bank, plus taxes, insurance and common charges. I wonder how much those next door neighbor tenants are paying? And will owning in a mixed complex like this impact your resale value later on?

To editorialize a bit about why the private market is going to keep TICs coming... When the sales on all these units are over and done, sixteen times $300,000 will get the seller almost $5 million, and will free him/her/them from the responsibilities of maintenance. In my calculation from the owner perspective $5 million in the bank free and clear of any obligation sure beats managing the physical plant of sixteen apartments and trying to keep sixteen tenants happy.


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