This is What $1.6 Million Buys You in San Francisco

An uninhabitable 640-square-foot cottage is for sale in San Francisco for $1,599,000. That’s $2,498 per square foot and no, it’s not in move-in condition.

The listing for 311 28th St. in Noe Valley notes that the 2,888 square-foot lot comes with a “non-conforming cottage” that was built in 1907.

San Francisco Listing 311 28th St.

In other words, you’re going to have to tear it down before you rebuild on this site.

311 Clipper San Francisco Listing If you think someone could just spruce this place up, then you’re sadly mistaken. This is what the kitchen of this $1.6 million listing looks like.


And this is a view of its lovely bathroom, complete with a cast-iron tub.


The entry hallway looks like a perfect setting for a horror film.


Parking is tough in this neighborhood and the new buyer could maybe rent out the cottage’s two-car garage or the long driveway while waiting for the city to issue a building permit.


The above picture shows the lot and the neighbors’ homes. Considering there are property-line windows on the existing homes, it wouldn’t be surprising if they’d protest any proposed plans that blocked sunlight.

Before you dismiss this listing  as being overpriced and something that nobody would buy, keep in mind that there are a lot of developers and buyers that could see this as a relative bargain.You can count the number of single-family homes for sale in Noe Valley on one hand as of today. Since it’s zoned as RH2, a large single family home or a pair of condos are both possibilities.

Google, Apple and other Silicon Valley companies with well-heeled employees have shuttle stops within a few blocks of it, increasing its value significantly.

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Earlier this month a dilapidated home that’s half a mile away from this shack sold for $2.8 million. While that property didn’t need to be torn down, it does need to be stripped down to its bones.

Screenshot 2015-08-13 01.48.03

Why did the house on Noe St. sell for $2.8 million even though it’s in poor condition? It probably has something to do with the fact that this freshly remodeled home just around the corner sold for $7 million, which was $2 million over its $5 million asking price.


San Francisco real estate prices are out of reach for most people and this  listing illustrates just how far out of reach it is.  If you were somehow able to buy this property with standard mortgage underwriting terms, you would need to put $320,000 down, make at least $370,000 per year and have somewhere between $60,000 and $120,000 in reserve funds. Oh yeah, you’d also have to have zero debt payments, otherwise you’d need to have a higher income to keep your debt-to-income ratio intact.

Of course the above calculations aren’t going to work for most people. Instead, buyers would need to take out a construction loan or pay all cash. A developer with deep pockets is this lot’s most likely buyer.