Our first ground up development!

[Drew Chance]

Investment Info:

Large multi-family (5+ units) other investment in San Diego.

Purchase price: $840,000
Cash invested: $3,200,000

Ground up development of 10 apartment units (9 market rate, and 1 affordable unit)

What made you interested in investing in this type of deal?

I have always dreamed of building something from the ground up. We have done tons of rehabs over the past decade, but never truly built something from nothing. So when this opportunity presented itself, it was really a dream come true.

How did you find this deal and how did you negotiate it?

This was an MLS listed deal. The seller was selling several lots in San Diego simultaneously, we negotiated the price down from the asking price.

How did you finance this deal?

Private capital from Partner on the deal

How did you add value to the deal?

This was an existing single family home, we have scrapped the home and are building ten apartment units on this lot, which will increase the value of the property tremendously.

What was the outcome?

We are currently under construction.

Lessons learned? Challenges?

Dealing with the City can take far longer than you ever dreamed, especially during Covid-19. Budget for extra time and extra money for fees you were not expecting. We are just beginning with the construction, so I am certain there will be a new set of challenges coming at us next.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes, we worked with good broker/seller of the property at acquisition, which we have become friends now. I am a broker as well, so we cooperated on the purchase. We are using private capital, so no construction financing on this project. Feel free to reach out for any advice, I am pretty much an open book and always here to help fellow investors.