San Diego Multifamily Development
Hey Everyone,
I'm an investor out of San Diego, CA and I own a few small commercial properties (rental offices) and a couple of single family homes here. I also have one piece of raw land (there used to a residential home on the property decades ago so there is at least water on the property) in the south bay in a low socio-economic area that is drawing a lot of interest from developers.
I own the land free and clear through my LLC and I realize this is a vacant lot but development sites near public transit are hard to come by these days and properties in the area are selling for around $40/SF. The lot has been appraised at around $850K. The property is about 21,380 SF and the zoning designation allows one dwelling unit per 1,500 SF which means this site could hold up to 14 apartment units as well as additional affordable housing units.
My plan all along has been to sell this property and invest in a 10-20 unit or multiple 10-20 units via 1031 exchange in Texas or Nevada and I've already identified several candidate properties in those areas and have started the team building process but I'm starting to think I may want to take the leap and partner with a developer here in San Diego to leverage that property.
Development is expensive in San Diego but I could make it work if I really wanted to. I just don't want to overpay for developing something at a high-leg in the market with an election coming up and worrying about other outside factors that could derail the project thereby having me take on more and/or unnecessary risk.
My appetite for risk isn't low but I do not want to be overly aggressive given where we are in the market cycle and given the fact that this is California. I plan to be in multifamily very soon it's just a matter of whether or not it's in San Diego or elsewhere.
Input/observations from anyone who has had experience developing multifamily in terms of the challenges and upsides they may see in this situation would be most appreciated.
Thanks In Advance!
Tony