Update 24 September 2023: 152 4th Avenue has returned to the market, extensively renovated and listed at $4,950,000. See our feature.

—

Most real estate pros in San Francisco that’ve been around long enough have an especially memorable WTF story or two from the trenches. Perhaps it involves a hundred-party bidding war, or a listing where diehard squatters have taken residence, or learning via email that your employing broker sold you out to the same company it was belittling the day before. If we had a dollar for every one of them. *le sigh*

Ours involves a condo that was tenant-occupied when our client offered to purchase it, and it became known as the Mission Murder House by the time escrow closed. Long story short: one roommate bludgeoned the other, chopped up the body in the bathtub, and hid the dismembered parts in the basement. More on this later…

We sometimes come across extra special properties that carry multiple challenges. Exhibit A: San Francisco’s Mummy House at 152 4th Avenue.

This quaint pre-earthquake Victorian just outside the gates of tony Presidio Terrace was a house of horrors when a cleaning crew entered the foreclosed property in 2015. Inside, they discovered hundreds of bottles of urine, rats, mold, and most unnerving of all: the mummified corpse of the owner.

District Supervisor Eric Mar told the San Francisco Chronicle: “The police captains I’ve spoken with tell me this is the worst case of hoarding they have ever seen.”

Sounds to us like the place was ripe for a developer to work his/her/their magic. And, as it turns out, it still is.

Six years later, 152 4th Avenue is coming back on the market, largely untouched from the time local real estate investor Green Hills LLC purchased the extreme fixer in probate for the princely sum of $1,560,000. It is now listed at $1,750,000.

According to stats collected by the SFAR MLS, the median sales price of single-family homes in the Lake Street District has increased 66.5% since the Mummy House sold in 2015. Coincidentally, the price of lumber has nearly doubled over the past 12 months, labor has become harder to find, and the city’s permitting backlog has continued to grow. For what it’s worth, the current seller has done a favor for the next owner by abating code violations on the place.

The property’s morbid history aside, there aren’t many 2-bedroom single-family home sales in the neighborhood with which to compare apples-to-apples. In fact, when it sold in 2015, it was the only 2-bedroom house sold in the neighborhood that month, and there was not another 2-bedroom house sold until April 2018 (which was the first of only seven 2-bedroom house sales up to the date of writing this).

There were plans filed with the San Francisco Department of Building Inspection in 2016 to add two more bedrooms to the house. It’s no secret to developers that the fastest and most cost-effective path to adding value is to capture space within the envelope, and this house affords that opportunity. Converting the attic and basement to habitable space could add easily double the existing 1,130 square feet (per tax record).

So let’s examine some 4-bedroom properties…

Lake Street District 4-bedroom outdated houses and cosmetic fixers with the most closely comparable square footage have sold in the lower part of the mid-$2 million range over the past year or so. Meanwhile, nicer move-in ready 4-bedroom houses of similar scale have sold in the lower part of the mid-$3 million range.

Accordingly, 152 4th Avenue could very well hit the $3,000,000 mark as a newly renovated 4-bedroom house on the smaller side, even with its morbid history.

Let’s say it sells today for the $1,750,000 list price. If another $500,000 is spent to improve it as described, a $3,000,000 resale price and 5-6% off the top to pay broker commissions would yield a profit in excess of one half million dollars.
 

Now back to our Mission Murder House story…

Our client purchased it for $400,000. Mind you, it had tenants on a lifelong lease who were paying next to nothing and had no intention of vacating. The cost to carry, improve, and resell the freshly vacant property (because murder charges will likely land you in jail for a long time) was no more than $200,000. It was subsequently purchased for $1,050,000 — significantly less than the median price of other condos in the area at that time. You can do that math on that profit.

Mission Murder House as it appeared post-renovation, listed and marketed by yours truly.

In closing, the occurrence of death on a property must ordinarily be disclosed to prospective buyers for a period of three years from date of incident. For the Mummy House, that time has come and gone. And as of this month, May 2021, the Mission Murder House is also in the clear. Nonetheless, we’re living in the digital age when a well documented case of the WTFs will live on forever.

The numbers suggest that investing in stigmatized real estate is still an opportunity to make a killing. Especially if it has good bones. Okay, okay… we’ll stop with the puns.