Hello everyone!

If you're in real estate, whether as an agent or a developer, SB-9 in San Diego City is something you need to have on your radar and smart investors can make it work to their advantage. Urban Lot Splits (ULS) allow you to divide a lot into 2 parcels, and Multi-Dwelling Unit Developments (MDUD) are allowed up to 2 units per lot. With enough space, this could mean up to 4 units on a single property. A potential goldmine for those seeking to increase property value and generate rental income.

However, navigating this opportunity requires strategic planning. Investors need to factor in zoning regulations and parking requirements, which are essential for smooth permit approval. While permits for ULS may take up to 1.5 years, MDUD projects can proceed faster, provided all requirements are met.

Let's break down the numbers for San Ysidro, a promising area for development. Building a 4,000-square-foot, three-story duplex with a 1,000-square-foot ADU could cost about $1.83 million, including construction and permits (excluding land). With market values reaching approximately $3.95 million, that translates to a 115% ROI. Construction could take a year, with permits stretching up to 15 months, a timeline that’s still attractive given the return potential.

For developers seeking even bigger returns, a lot split project might be the way to go. Constructing two 4,000-square-foot duplexes on separate parcels in San Ysidro would cost roughly $2.96 million, with a market value of $6.31 million, offering a 113% ROI. Compare that to Tierrasanta, where market values hover around $3.01 million for a similar project, and it’s clear that location is key to making SB-9 projects profitable.

Agents, this is where you can shine. By highlighting properties in high-demand areas like San Ysidro that are ripe for SB-9 developments, you'll attract savvy buyers and investors who are eager for strong returns. Presenting these insights to clients sets you apart from the competition.