Riverside County California
Mentors Input Wanted!
Generate income from as many properties as possible and retain ownership.
What I own:
2 contiguous raw land residential lots in a subdivision north of Palm Springs, California along Hwy 111. Market Value $45k total
3 lots in Lake Elsinore, CA. Two contiguous along Hwy 74 and one lot on the northeastern section of the lake with a lake view. Market Value $60k total
Sell the contiguous lots in Palm Springs. Use profits as seed capital to construct foundation (water, sewer, electric, etc.) for some type of commercial operation on contiguous lots along hwy 74 in Lake Elsinore. = retained ownership commercial lease income.
Finally, obtain construction loan collateralize by leased commercial lots and lake view lot to build a vacation rental on parcel with a lake view= rental income, retained ownership
Mentors let me know what your thinking!!!
From my understanding there is quite a bit of land on Hwy 74 available. You would rent is a contractors lot or what is the highest and best use? I think these tenants are hard to find, they typically stay a decent amount of time.
How many vacation rentals are there in Lake Elsinore? It sounds more like a build and sell property to me. Does building pencil right now?
I think the idea of Lake Elsinore as a vacation destination went out of style about 80 years ago. I'd do my due diligence, then check it again on vacation rental demand in that area.
Lake Elsinore became a popular commuter community for a short while, but the whole place was built up at the worst possible moment and all of it went under water. I had some dealings out there a couple of years ago and it was my understanding that there was a lot of vacancies and even more "shadow inventory" out there. I would take a close look and make sure that you are very confident the market is dramatically improving before investing.
I would agree with the other comments, this is not an area conducive to RE investing, be very, very cautious. I would be more inclined to develop the lots in the Palm Springs area, but again, be careful, it must pencil out and you have some DD to do first!
These projects look to be in the infancy stage. Before thinking any further, I would follow the good advice here and find out if there is a true market for your ideas. If there is no demand, you could lose your shirt and a lot of other things.
For commercial properties, perhaps you should consider a "Build to Suit" project. You advertise that you are willing to custom build to the tenant's specs in exchange for a long term lease.
But... you need to see if you can qualify for loans to cover these projects. Without that, all future consideration is a waste of time. Good luck.