The recent listing of 219-221 Chattanooga Street is an appreciation mystery I’m trying to solve. This two unit building was brought on the market late last year with an asking price of $1.195mm. The home sold in November 2006 for $995K. The two units are tenant occupied and based on the inspections and disclosure of the original listing, I know that there is a VERY LARGE amount of work that needs to be done to this charming, but old building in the heart of Noe Valley. For one, the back of the building (which includes the bathrooms, large storage area and deck), needs to be removed and rebuilt as it’s in disrepair.

Here is what I’m trying to figure out…

How did this building appreciate $104K (10.5%) in a mere 4.5 months? The rent roll is exactly the same, no work was done and now weeds are growing through the deck in the back yard.

All of that said, I’m a fan of the building and the location. Buy it at $1.01m, put in $325k (redo the back area bathrooms, storage and deck, reconfigure the units, get some new finishes, reinforce the foundation, build a garage and clean up the back yard, owner occupy the two units and condo convert). In at $1.335m and you’re living in a gorgeous 2 bed/1.5 bath, brand new condo in an amazing location.