I am interested in building a small 4-8 unit complex in San Diego. Does anyone have experience doing this? With rents ATHs it seems like this would pencil out reasonably well. My estimation is about $300k per unit 900sq ft 2/2.
Lender · Santa Monica, CA · Member since 2017 · 31 posts · 10 votes
4y
Saw heavy traffic funnel down to SD from 2020 to the end of 2021. Margins are getting tighter down there. Would ultimately depend on your lot buy-price. I'd opt for a parcel with plans in place to shorten your lead time until you build. Wouldn't want your as-complete value to drop below break-even after you'd sunk in 40k+ in soft costs.
Some good questions posted back by reply. I am curious what your overall real estate investment strategies are as this would help to direct the best options to deploy your capital and reduce risk on the rate of returns. Do you already have a lot? You can definitely get into an existing property at a lower $/unit and as you rightly pointed out, market rent rates are quite high, there is often some nice upside in existing inventory.
Would you care to connect to look at the various options to deploy your capital?