Thanks to Burbed reader Gallileo for this find!
Excellent Investment Opportunity: Corner Lot Residence in Palo Alto’s Best Neighborhood!
Location: Old Palo Alto
This 3br/1.5ba single-family residence is an owner-occupied, ranch style one-level home (1328 sq. ft.) with a two-car attached garage. The house was built in 1950 and is on a corner lot (5625 sq. ft., Zoned R1) surrounded by multi-million dollar estates in the most prestigious neighborhood of Old Palo Alto located just ten minutes walking distance to University Ave. in downtown Palo Alto.
The owners have lived on the property since 1977 and prefer to continue residing in the home for the next ten years as opposed to accepting a traditional outright sale. Based on a 2007 appraisal, the property was valued at $1.2m. The property’s current fair market value now is estimated to be at least $1.0 million. *According to the City of Palo Alto Development Center, a new house may be constructed up to 2,438 sq. ft. (not including basement area which may also be built up to the same square footage area as the main level.)
The owners are open to all serious offers. However – as a reference point, they have considered the summarized scenarios below which will enable them to continue living in the property.
The owner-occupant will accept a $600,000 loan secured by a new first deed of trust at 6% compounded monthly. The owner will continue to live on the property with no loan payments and move out in 10 years with an end payoff to the lender of $1,091k in ten years. An alternative option is the owner would agree to pay a lender 60% of the purchase price in 10 years – allowing the buyer to be paid whichever payoff is higher depending on how inflation affects the property’s value at the end of ten years. *An investor in this scenario would need to consider their imputed interest because an investor making a loan with no payments (such as buying a zero-coupon bond) may still need to pay tax each year on the interest that accrues during the year. In this instance, a retirement account or non-profit entity may be a suitable investor.
The owner will accept $900,000 for the property as-is, through an outright sale now. The seller will continue to live in the property for the next ten years. Rather than paying rent to the new buyer (on which, an investor would be required to pay income tax), the seller will instead continue to pay 100% of the ongoing costs of property ownership such as insurance, property taxes, and maintenance during the ten years at which time, the buyer can take possession and/or sell.
Buyer to purchase a 67% undivided interest in the property for $600,000 cash. At the end of ten years, the current owner will sell their remaining 33% with a first right of refusal to the buyer for its fair market value.
*Buyers are required to consult with their own attorney and tax consultant, and are urged to conduct their own due diligence with the City of Palo Alto Planning Department regarding usage, building restrictions, and zoning laws. Any contracts and/or deed of trust will be recorded with both buyer/seller parties providing their own attorney representation and contract review at their own expense.
740 Addison Ave.
Palo Alto, CA 94301
Bedrooms: 3 Bathrooms: 1.5
Parking Spaces: 2 Year Built: 1950
Lot Size: 5625 Garage Size: 2
School District: Palo Alto Square Footage: 1328
Here is another one for you. My guess is that someone has had a little too many cash-out refi’s and is looking for a way to stay in their home, but it’s really the bank’s at this point. Just look at the artistic color–easter egg blue is all the rage these days. Plus it is located on the corner of Fulton Street, which is Palo Alto’s “Christmas Tree Lane”–just on the part of it that isn’t part of the show. You get the Fulton street connection with none of the pesky tourists!
And such a realistic price–Just mention the 2007 price and you know you get 200K of instant equity just out of the gate. Now there is an investment worth pursuing.