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The Family Business

Erin Feher and Danny Montoya


Buyers: Erin Feher and Danny Montoya
Bought: Mixed-use building in the Outer Richmond
Asking: $1.19M
Final: $1.15M
Realtor: Carol Koffel, Vanguard

On our first date, over hot chocolate at Ritual Roasters in the Mission, my now-husband Danny and I bonded over (among other things) our mutual goal of one day owning a home in San Francisco. He was a first-grade teacher who moonlighted as a DJ. I was a waitress and journalism student at San Francisco State. Considering our career choices, the odds of our becoming homeowners weren’t necessarily in our favor. But we were diligent savers, and my parents offered to kick in to help cover closing costs, so two years into our courtship we were able to put 10 percent down on a 500-square-foot condo in the Tenderloin priced at $427,500. This was 2007 and the market was just about to take a nose dive, but we weren’t looking for a hot investment. We were looking for a home. By the time we were finally ready to move on, 10 years and two kids later, the value had gone back up and the amount we owed had inched down. We figured we could sell it and pocket about $250,000 cash to put down on a new place.

Of course, we were still a journalist and a teacher, and our income didn’t qualify us for a home loan above $800,000. We couldn’t get much more house than we already had for that amount in San Francisco, where we were dead set on staying; plus, the monthly payment on that kind of loan would have left us strapped. But we didn’t really see ourselves in a traditional single-family home anyway. Our dream was a mixed-use building, with a residence above a commercial space. We had started our own business in the Mission two years back, a woodworking studio for kids called the Butterfly Joint. Danny ran it shrewdly (i.e., he did every single thing himself, from building it out to designing the website to teaching all the classes), and so despite the $5,100 commercial rent, it was making money. If we added that rental income to our mortgage payment, our monthly property expenses totaled $7,500. For that kind of outlay, hypothetically we could have bought something in the $1.4 million range. But then it was back to the problem of finding someone to lend us that much money.

A friend of ours, who owned two bars in the city, told us she had taken out a Small Business Administration loan to open her second location. A few Google searches led us to a specific type of SBA loan called a 504, which allows businesses like ours to buy property and requires only a 10 percent down payment. Another Google search led us to California Bank & Trust, which makes these types of loans. Danny filled out the “contact us” form, and Matt Hine, vice president at the bank, called him back almost immediately. Over the next couple weeks, and through a flurry of emails and phone calls with Hine and our realtor, Carol Koffel of Vanguard, we were preapproved for a loan of up to $1.5 million.

But savvy sellers know that SBA loans are much more complicated and take longer to fund (that is, it takes longer for the money to actually materialize) than traditional home loans. In a world of all-cash offers, what we were dangling at sellers wasn’t particularly appealing. Plus, we needed to sell our condo before we could even come up with the down payment. We can only assume that this is why we lost out on the first three properties we bid on over the next six months. The high we were riding when we were approved for the loan began to wane. But we were able to erase one big black mark from our offer, thanks to my parents.

I’d never been privy to their financial situation beyond what I could piece together: A social worker and a handyman who bought their home in a Cleveland suburb for under $40,000 in the late 1970s, they were notoriously thrifty, much to my teenage chagrin. But they retired comfortably at 65 and had set up college savings accounts for my brother and me that would cover four years at state universities. And when I needed a 90-day loan of $210,000 to buy a mixed-use building in San Francisco, they gave it to me. The loan would allow us to live in our condo until we had a new place to live.

We found that place about six months into our search. Just four blocks from the Pacific Ocean and one block from Golden Gate Park, it had a huge commercial space that the owners, ballroom dance enthusiasts, had hung with half a dozen chandeliers and used as a private dance hall. There was a 550-squarefoot apartment above. We offered $1.1 million and included a heartfelt letter and a picture of our family. The owners countered with $1.15 million, indicating that they had another offer but really loved our story and wanted us to have the place. We accepted, finding out later that they had chosen us over a higher, all-cash offer. Because they are amazing.

Our escrow was 63 days long, there were inspections (a requirement of an SBA loan), and the paperwork was intense. But on August 3 of this year, we got our keys. A week later, my 69-year-old dad flew out from Cleveland with a collection of drywall knives in his suitcase and spent the next two months renovating the upstairs unit with us. On October 9, we held our first (sold-out) camp at the new location of the Butterfly Joint. Our baby can nap in his crib upstairs and our daughter and her friends can play in the backyard while Danny works in the shop. And I can see a sliver of the Pacific from my side of the bed. If only those two lovesick kids at Ritual could see us now.

The Family Business
Broker, Lawyer, Designer, Mom
To the Locals Go the Spoils
Tell a Story, and Make It Good
The Lottery Winners
Riding Out the Recession
The Soul (and House) Mates
Three Boys and a Dream
Not in Texas Anymore
A Reward for the Faithful
A Gift from Grandma
The Grateful Educators
Chasing the Dream
The Renter No Longer
The Data Optimizers
An Accidental Homeowner
The “Oh-S**t” Moment
All Aboard in the Marina


Originally published in the November issue of San Francisco

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