Someone bought a private road for $994 in San Francisco

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Someone bought a private road for $994 in San Francisco

Ryan Lee
Investor · Bowie, MD · Member since 2016 · 143 posts · 51 votes

Look at what can happen to a gated community that don't pay there taxes.

http://www.npr.org/2017/08/07/542076983/wealthy-san-francisco-neighborhood-fails-to-pay-taxes-loses-private-street?utm_source=facebook.com&utm_medium=social&utm_campaign=npr&utm_term=nprnews&utm_content=20170807

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Danny Grey
Investor · La Jolla, CA · Member since 2016 · 66 posts · 169 votes
9y
Originally posted by @Ryan Lee:
Originally posted by @Matt K.:

 I love that they kinda sticking it to the wealthy a little. 

 Why? Do you think this neighborhood's residents deserve to have it stuck to them because they are financially successful?

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  • Clint ShelleyPro Member
    Surveyor · Dothan, AL · Member since 2014 · 425 posts · 391 votes
    9y

    Yes. This can and has gone in multiple directions. For every example you find that was ruled one way you can find the converse. This could be a prescriptive easement or definitely an easement by necessity for sure. That's what makes law and its practice so multi dimensional and best left to those who practice it. Prescription and taxes do not always go hand in hand. For example... Here in Alabama, we have lots of dirt roads that are graded and maintained by the counties. Their continuous maintenance for 20 years has acquired them a prescriptive easement on behalf of the public. The landowner still owns the roadbed and the ditches, etc. and still gets the tax bill too. This easement is unwritten and unrecorded but still valid. You will not find a true right of way deed until they elect to lay paving. Your mileage may and will vary based on Locale and situation. Fascinating for sure. I will try to find a case like this one in the thread that has been adjudicated to see what the court said. It may take me a few days, but I will post. Great stuff gang.

    Clint 

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Clint Shelley  having sold ranch land and all sorts of land in CA for 40 plus years I have run into all sorts of easement issues.  and they are as you state complex.. and no way as cut and dry as people think..

    one big fallacy is a property cannot be land locked that simply is not true in CA.

    this will be interesting..   I suspect the road could be private but there is probably and easement for ingress and egress for the owners.. but just guessing like I said I cant see a modern city recording the plat knowing that there is no deed right of way.. the people that own the homes could not get title insurance.. they would be land locked and right  of way would be excluded.

    I am doing an easement by necessity right now in Oregon.. thank god title co.. missed it and they either need to get it for me or pay me the 700k my land is worth LOL.. we learned through the process even though we have been crossing state lands  50 feet to get to the public right of way  for 50 plus years. there is no prescriptive right in Oregon or any other right to cross that land.. only way title co is going to get me a right of way is to buy it from the neighbor who to date has been less than willing.. even though all I need is 50 feet by 20 feet of their cherry stem driveway there home is 600 feet back .. but you know neighbors really friendly until you need something  LOL.. then they are out for blood .. not all but these folks are .

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    3Reply
  • Tom Chen
    Real Estate Investor · Flushing, NY · Member since 2016 · 210 posts · 77 votes
    9y
    The irony is, that residential area was originally developed to SPECIFICALLY keep Asians from being able to purchase property there. It's been 2 years since they bought that property...it would definitely be odd if a judge were to reverse the sale. These rich people should just pay up.
    1Reply
  • Matt K.
    Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
    9y

    inside view...

    https://www.google.com/maps/@37.7887468,-122.4612284,3a,75y,259.63h,68.91t/data=!3m6!1e1!3m4!1s9MXNrvo60pLGw0HEUusioA!2e0!7i3328!8i1664

    0Reply
  • Wayne W.
    New to Real Estate · Chino Hills, CA · Member since 2017 · 23 posts · 8 votes
    9y

    It doesn't matter what the buyer will do to the street in the future. Right now, they purchased a street legally, they own it, they can do anything they want to it(within the law).

    It's just like anyone who got a deal for cheap due owner didn't know the market. Are you willing to give it back? NOPE

    rgds

    0Reply
  • George P.
    Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    9y
    Originally posted by @Ryan Lee:
    Originally posted by @Matt K.:

    it was about 90k not 900.... and they are likely going to get outspent in court. 

    I'm not sure if you could, but they should of NNN leased it back to the HOA... instead they are trying to tell super wealthy and elite families they are going to have to pay for parking haha.

     thanks for the correction. I love that they kinda sticking it to the wealthy a little. 

    You know who thinks like this? Poor people. 

    5Reply
  • Ryan Lee
    OP
    Investor · Bowie, MD · Member since 2016 · 143 posts · 51 votes
    9y
    Originally posted by @Matt K.:

    inside view...

    https://www.google.com/maps/@37.7887468,-122.46122...

    THANKS SO MUCH FOR THE LOCATION! very nice homes.

    0Reply
  • Ryan Lee
    OP
    Investor · Bowie, MD · Member since 2016 · 143 posts · 51 votes
    9y
    Originally posted by @Jason Hirko:
    Originally posted by @Jay J.:

    I don't get it..  what's the point?? 

     I mean, its not like the 'road owner' now owns the homes or anything.. (seriously, they just bought a bill bill, didn't they??) what are they going to do, make it a toll road??!!  lol

     Parking...

     I am not going to lie, but a toll road would be hilarious. 

    0Reply
  • Matthew Olszak
    Real Estate Broker · Chicago, IL · Member since 2015 · 1k+ posts · 2k+ votes
    9y

    A number of years ago here in Illinois there was a guy who purchased the entire common area of a HOA - parking, walkways, and pools: http://articles.chicagotribune.com/2008-04-13/busi...

    Just last month at the scavenger sale in Cook County I came across an alley behind 6 houses. Each house had an easement though to access their garages in the rear.

    0Reply
  • Jose R Garay
    Investor · San Ramon, CA · Member since 2016 · 4 posts · 1 vote
    9y

    rather than going to court and battle it out with the residents, I would sell it back to them. 

    The investors paid a little over $90K  

    The price would be $900K plus expenses, a great price in a city where a parking spot can go for $200K

    A NONE ZERO SUM GAME! 

    the residents win their street back, NO LAWYERS OR COURTS involved

    and I made a thousand percent on my investment. (and I being generous considering the values of the properties on the street!)

    AWESOME!!!!!! 

    1Reply
  • Bruce Lynn
    Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
    9y

    More to the story...
    http://www.sanjoseinside.com/2017/08/08/san-jose-couple-makes-big-news-by-snatching-up-private-street-in-swanky-s-f-neighborhood/

    0Reply
  • Ryan Lee
    OP
    Investor · Bowie, MD · Member since 2016 · 143 posts · 51 votes
    9y
    Originally posted by @Bruce Lynn:

    More to the story...
    http://www.sanjoseinside.com/2017/08/08/san-jose-couple-makes-big-news-by-snatching-up-private-street-in-swanky-s-f-neighborhood/

     thanks!

    0Reply
  • John Nachtigall
    Santa Rosa, CA · Member since 2017 · 325 posts · 701 votes
    9y

    I have been following the story as I live close to SF. They actually own the road, the sidewalks, and the "common" areas. They got into a bidding war 2 years ago, so they paid $90,000 for a $990 debt. They have said they just saw the address and went for it. They kept it secret for 2 years to get it past the date by which it could be rescinded. The HOA only found out because the title company that the couple was using to make sure title was clean called the HOA and asked if they were going to buy it back (lol).

    The home owners apparently already have an easement to get to their homes, but have no rights to park on the street anymore.   And as far as being an exclusive "gated" community, they can deny access to the roads owner and anyone the owner deems.   So, for example, if he wanted to charge tour busses $10 a pop to run around the roundabout and look at the homes, he could.    It is private land...his private land, so he has access to his land.  

    It is absolute extortion...it is absolutely legal. The HOA is rich and powerful and they will surely fight, scream, and stamp their feet, but in the end the law is settled here and they are going to have to pay to get this back. Personally, I think I would just pay someone in a jalopy to drive around the circle from 8am to 10pm. Invite the press, have them take pictures or even better give them rides....after 1 day the HOA will pony up whatever money you wish.

    It is a simple clerical error, in all honesty the HOA does not deserve it just because they are rich. But it is hard (emotionally) not to root against them.

    1Reply
  • Bruce Lynn
    Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
    9y

    Interesting that they admit they did not really know what they were buying, just the general area.  Way too often I see this at tax sales.  Often the people in the know will warn the people bidding.....be care...do you know what you are buying....and they keep bidding.  Sometimes the lawyer selling the property will warn them.... and they keep bidding.   Most of the time it is land locked parcels....other times it is land in the flood zone or under water.   We'll see if they got lucky or not.   They might have just opened a can of worms that turn into cobras.  I wish them the very best.   I'm somewhat surprised no one has raised the issue of why this land was only being tax $14/year.   In San Fran, I would think that would be the tax for a pebble on the road.   Especially if parking is involved.   

    0Reply
  • Aaron Mazzrillo
    Investor · Riverside, CA · Member since 2011 · 2k+ posts · 3k+ votes
    9y
    Originally posted by @Ryan Lee:
    Originally posted by @Matt K.:

    it was about 90k not 900.... and they are likely going to get outspent in court. 

     thanks for the correction. I love that they kinda sticking it to the wealthy a little. 

     And yet you come to a website dedicated to making you wealthy. Maybe someone will "stick it to you" someday.

    2Reply
  • Matt K.
    Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
    9y
    Originally posted by @Jose R Garay:

    rather than going to court and battle it out with the residents, I would sell it back to them. 

    The investors paid a little over $90K  

    The price would be $900K plus expenses, a great price in a city where a parking spot can go for $200K

    A NONE ZERO SUM GAME! 

    the residents win their street back, NO LAWYERS OR COURTS involved

    and I made a thousand percent on my investment. (and I being generous considering the values of the properties on the street!)

    AWESOME!!!!!! 

    Dream bigger... lease it to them for a "modest" fee per house per mo. Structure it like NNN where they are responsible for maintenance and taxes.

    0Reply
  • John Nachtigall
    Santa Rosa, CA · Member since 2017 · 325 posts · 701 votes
    9y

    @Bruce Lynn

    Apparently there are 800+ "private roads" in San Francisco and they are all taxed at $14 a year because that was set back in the 1800's.   I smell a tax increase coming.   It will not take long for the most liberal city in America to figure that out (sorry Berkeley, New York or Boulder if you are offended).  

    @Aaron Mazzrillo@Ryan Lee

    There is something to be said for aspiring to be wealthy enough to be worth suing.   I fervently hope to be worth a frivolous lawsuit one day, I will know that I have arrived.    :-)

    1Reply
  • Ryan Lee
    OP
    Investor · Bowie, MD · Member since 2016 · 143 posts · 51 votes
    9y
    Originally posted by @John Nachtigall:

    @Bruce Lynn

    Apparently there are 800+ "private roads" in San Francisco and they are all taxed at $14 a year because that was set back in the 1800's.   I smell a tax increase coming.   It will not take long for the most liberal city in America to figure that out (sorry Berkeley, New York or Boulder if you are offended).  

    @Aaron Mazzrillo@Ryan Lee

    There is something to be said for aspiring to be wealthy enough to be worth suing.   I fervently hope to be worth a frivolous lawsuit one day, I will know that I have arrived.    :-)

    Agreed.

    0Reply
  • Bruce Lynn
    Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
    9y

    @Ryan Lee   Looks like it is gated.....now the winner owns the gates.  He could either open them up for all to see.....and take a fee to close them, or could install a toll taker.   This will get very intereeeesting.

    1Reply
  • Ryan Lee
    OP
    Investor · Bowie, MD · Member since 2016 · 143 posts · 51 votes
    9y
    Originally posted by @Bruce Lynn:

    @Ryan Lee   Looks like it is gated.....now the winner owns the gates.  He could either open them up for all to see.....and take a fee to close them, or could install a toll taker.   This will get very intereeeesting.

     I would sell it back to them plus some perks from one of the owners. I am assuming since they have money they might have some connections or deals that can be made. 

    0Reply
  • Matt K.
    Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
    9y
    Originally posted by @Bruce Lynn:

    @Ryan Lee   Looks like it is gated.....now the winner owns the gates.  He could either open them up for all to see.....and take a fee to close them, or could install a toll taker.   This will get very intereeeesting.

     Sell them and all the landscaping... lol

    0Reply
  • Jerry K.
    Specialist · Phoenix, AZ · Member since 2011 · 698 posts · 629 votes
    9y

    I saw a short section of a street as a parcel in a northern Arizona tax lien auction this year. Funny thing was, I knew the street since I had just researched where a member of the band Chicago had a home in the city. Then this lien shows up and the parcel outline was the street in front of about 4 homes including the Chicago band member. Not a gated community nor private subdivision. Just what looked like part of a public street. Didn't have the heart to buy the lien. Also weird was that the parcel owner was an individual's name and not the city.

    I did, however, buy a lien on a parking lot for some nice professional offices. The buildings are rented. Interest rate on the tax lien was pretty good and the owner of record will pay the lien off before it ever gets to the foreclosure option. That's all I want for this allocation of money  - a good interest rate return.

    0Reply
  • Bart H.
    Dallas, TX · Member since 2016 · 1k+ posts · 745 votes
    9y
    Originally posted by @Matt K.:

    Since this is a private road... does the owner of the road:
    Assume the landscaping contracts (I highly doubt a place like this is doing their own landscaping)

    Maintenance for the road itself? Is it on some kind of schedule set forth by the HOA?

    What about the utilities like the sewer/water lines... since it's a private road wonder who has ownership in the road itself.

    Bet that wealthy HOA could replace the gas or electric or water lines.....wouldn't the new owner be on the hook for replacing the road?

    0Reply
  • Ron Fletcher
    Leclaire, IA · Member since 2016 · 161 posts · 130 votes
    9y
    If I were these buyers I would " settle "sell back to owners for a 100% return and be done with it. If they get really greedy as someone posted earlier, those people and their lawyers will drag it thru courts for years and bleed them dry.
    1Reply
  • Ryan Lee
    OP
    Investor · Bowie, MD · Member since 2016 · 143 posts · 51 votes
    9y
    Originally posted by @Ron Fletcher:

    If I were these buyers I would " settle "sell back to owners for a 100% return and be done with it. If they get really greedy as someone posted earlier, those people and their lawyers will drag it thru courts for years and bleed them dry.

     true

    0Reply
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