Honoring the ups and downs of this columnist’s fearless friend and his career in the San Francisco rental market.
What a long, strange trip it’s been. This year has been interesting—no doubt about it—and it is not over yet. The inspiration for many of my articles has been my good friend, business partner, and client, Irving. Irving owns a nice portfolio of San Francisco rental properties. I often refer to him as one of the last cowboys. In the 1960s, he was fearless, jumping right into purchasing properties without any real estate background. Not all went as planned, but for the most part, he did well.
Sadly, I must report Irving is at home in hospice—but it makes me happy to also report that was able to cast his vote in the 2020 election first. He will leave a sizeable estate in local real estate assets.
I spoke with him yesterday, and he fondly remembered driving his clunker from Boston to San Francisco in 1964. “San Francisco has been very good to me,” he said. Before he landed his first job selling Chronicle subscriptions over the phone, he took every bus route in San Francisco from start to finish to learn the lay of the land. He had several other odd jobs, including working at Doggie Diner, Macy’s, and Emporium. Even then it was a struggle to pay rent in San Francisco, so he decided to join the Navy before he got drafted. After the Navy, he joined the Merchant Marines where he worked on a transport ship going back and forth to Vietnam. While on the ship, he met Doc, who would soon become his business partner. He made it through the Summer of Love, and in 1968, while volunteering with the McCarthy for President campaign, he met another soon-to-be partner, Mary Alice. Within a few years, he had met a wide variety of lifelong friends and a cast of colorful characters.
Irving’s mother, Rose, gave his three older siblings $5,000 as a start when they got married. She knew Irving was struggling in San Francisco, and so she decided she would go ahead and give him $5,000. She confided in his older sisters her concerns that he would never marry, that he’d become a communist, and that he’d share the $5,000 with his friends. Well, he didn’t share a dime; instead he made his first purchase on Winfield Street in Bernal Heights. The Winfield purchase worked out so well that he partnered with Doc on another Bernal property on Prospect Avenue. His banker told him that doctors were an easy loan. Frank Sinatra’s niece lived in one of the units and the other was vacant. The property was leaning into the neighboring property and they got a construction loan to make repairs. Once completed, they rented the property, refinanced, and paid off the construction loan.
While Doc was pleased with the results, he wasn’t ready to jump into a new venture. Irving called up Mary Alice—she had a full-time job and so could get a loan. Together they bought a neighboring property on Winfield Street. Irving loved garage sales and spent his weekends finding supplies for his projects. He claimed to be the first green builder in San Francisco. He found inexpensive labor and at times did some of the work himself. This was the beginning of many more purchases with Doc, Mary Alice, and many other partners. Based on a handshake, he would partner with plumbers, contractors, realtors, and just about anyone that made sense.
Irving’s parents had him later in life, and his father passed away when he was just eleven years old. He and his mother moved into a three-flat building in Boston with his sisters, each one occupying a floor. By then his sisters had married and had kids of their own. There was never a dull moment, and someone was always around.
One of the reasons for Irving’s success is his ability to get along with everyone; he is a people person. He is a colorful character, constantly singing jingles from radio shows. One of my favorites was Bucky Beaver Circus Star’s New Ipana; if you have time do a quick Google search, I recommend watching the vintage video. Whenever he would get mad, though, you would know it. He could be furious one minute and then your best friend the next, but he rarely held a grudge. For the most part, he got along with his tenants and even formed friendships with some of them. He was never overly aggressive with rents and preferred that tenants stick around for a while as vacancies cost money. I’ve always maintained that sooner or later anyone who owns property in San Francisco has a story to tell—Irving certainly does. He has all kinds of tall tales, some of which should not make it to print. The one that really sticks out is the infamous cat-breeding tenant who was also an attorney. They went many rounds and ultimately ended up in a jury trial. Fortunately for Irving, she represented herself and lost. The whole event was very stressful for him; he really didn’t think he would win.
He’s had his fair share of COVID-related rental issues, but nowhere near what some landlords have experienced. Irving has been very fortunate; he’s owned most of his properties for a while. There have been a handful of vacancies, only a few payment issues, one rent reduction, and a boatload of repairs due to tenants being home during quarantine. He’s had the most movement in a property consisting of one-bedroom units, where the majority of tenants were techies who can now work from anywhere.
Irving still talks about buying property. He was particularly fond of 2-4-unit buildings and, with rare exception, that’s what he invested in. He bought and sold in any market. This year’s market has been interesting; we’ve got great rates available, a pandemic, and an election year. Property is still selling. In a year-over-year comparison or even a comparative market analysis for a particular property, I’m using a shorter timeline as opposed to the six-month default on the Multiple Listing Service. For the purpose of this article, I pulled sales from September and October of 2019 and 2020. Last year, there were 73 properties that sold during this timeline, this year there have been 61; I don’t consider this a huge disparity. Price per square foot for properties sold during the timeline in 2019 was $686.39; this year price per square foot is $692.67. In 2019, days on market were at 52; this year, this number is 46. The average sale last year was $2,218,712, while this year the average sale price is $2,135,180.
There is a healthy inventory right now, which helps balance the scale for buyers—and they are out there. Allison Chapleau is a top agent in multi-unit sales and her positive outlook on the real estate market is refreshing. She kindly took my call to discuss her opinion of the market. She said there are three factors that are triggering property owners to sell. One, there are more vacancies. Two, vacancies are harder to fill right now. Three, property owners are getting tired of the politics. Well-priced properties that are properly marketed are selling, and there are plenty of well-qualified buyers in the market.
The election results have investment-buyer confidence up. Proposition 21 was defeated by a 20% margin, striking down—for the second time in recent years—efforts to enact more restrictive forms of rent control and abolish Costa Hawkins. The defeat of Proposition 15, which would have changed commercial and industrial property tax law, is also perceived as the best outcome for landlords.
I know that if Irving was able to look at properties right now, he would be. I also know he wouldn’t be worried about selling. When one door closes, another opens. He would be disappointed that we’re not touring properties, for the time being. Pre-COVID, he would show up at my office every Tuesday. He particularly liked seeing open homes that served lunch. On Sundays, he religiously read the real estate section of the newspapers. When he wasn’t shopping for property, he was taking care of his own. He made his rounds, broom in hand. He’d wear his signature sweats and a threadbare sweatshirt. People who didn’t know him would often wonder who he was. He paid close attention to his properties, and that was the true key to his success.
Kilby Stenkamp is a realtor at Vanguard Properties. She can be reached at email@example.com or 415-370-7582.