All Forum Posts by: Greg Wadsworth

Investment Info:

Single-family residence other investment in La Jolla.

Purchase price: $1,700,000
Cash invested: $750,000
Sale price: $2,675,000

Original plan was to remove existing home and build 6,500 sf single family home on 20k sf territorial view lot.
Instead, we sold as shovel-ready project, fully entitled, to another developer for significant return.

https://www.redfin.com/CA/La-Jolla/6389-Castejon-Dr-92037/home/4922498

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

Have completed other similar projects. This property is in my neighborhood, so I'm familiar with the market and potential exit values.

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

The deal came from a local broker who was familiar with my acquisition criteria. Although the existing home was not distressed, it had never been updated (1963) and was in disrepair. We negotiated a quick closing and short inspection period, knowing that eventually the house would come down. We were willing to pay near retail price, because the margin would be realized at exit.

How did you finance this deal?

Acquisition:
25% equity
75% leverage - hard money

Construction loan was approved and ready to go, but never started construction.

How did you add value to the deal?

- Found the right development site with minimal coastal development requirements, which allowed ground-up construction without a CDP (coastal development permit).
- Developed architectural plans and supporting studies. Submitted to city and managed permit approvals.

What was the outcome?

Decided to test the waters and put up for sale as ready to build project, expecting ultimate buyer to be a retail buyer, ready to build and move in. The eventual buyer was another developer - we sold as fully permitted/shovel-ready project.
Negotiated some seller financing to help with sale
Made nice profit and sidestepped construction risk.

Lessons learned? Challenges?

1. Learned that it's possible to sell fully entitled project if there's enough juice in the deal - another exit to consider.
2. Appraisers stumble on the value of entitlements in this area. Original appraisal did not meet sale price. But after appeal and additional comps, worked out fine.
3. Took awhile to negotiate and close the sale. In the meantime, we couldn't start demo because it would have jeopardized the buyer's ability to close loan. This put us in a difficult spot as escrow delayed.

Have fantastic project in escrow. Looking for investors - please no lenders. Experienced developers/great ROI. Exit $6MM+. 

Builder needs 6-8 month bridge to take out first position lender ($200k) and complete improvements on 3rd of 3-unit commercial space in North Dakota. Other two units are leased up.

28% LTV based on current in-progress appraisal.

Offering 12% for $410k loan, secured by 1st position mortgage.

Appraisal and other due diligence materials available upon request.

Hi @Roy Gonda - 

Welcome to BP. Happy to share what we're up to here in SD. 

Feel free to PM me.

Greg

Basic update rehab in gated San Diego community. Purchased through short sale, experienced developer, ARV supported by appraisal.

Offering 15% flat fee for $150k to cover rehab, based on 6 month to exit. Rehab scheduled for 6 weeks, then on market. DOM avg 35. If project takes less than 6 months, annualized return is even more significant.

If interested, please contact me asap. 858-454-6996.

Hi Suzanne - 

Nice to meet you on BP. 

Please send me an invitation to connect. I have many projects and am always looking for investors. Although our projects usually have a larger gap if we don't self-finance, there are many ways to structure  fair and successful deals.

Would enjoy speaking with you more about it at your convenience.

@Account Closed please add me to your list.

Rare opportunity to step into triplex with strong cash flow.

Three units sit on large, buildable lot.

Must move quickly. Cash buyers only.

Hi Dar - I have a three-unit property under contract with a large buildable lot. My plan was to build out 5 new homes, but I now need to move on. Good cash flow on existing triplex.

Please contact me for details.

[email protected]

Hi Ed - I realize that you posted a year ago, but I have a three-unit property under contract with a large buildable lot. My plan was to build out 5 new homes, but I now need to move on.

This is a great project for a house hacker, flipper, buy/holder, or developer of new inventory in SD. Collect triplex rental income while developing the lot for buildout.

I've been looking at this under three separate scenarios:

Scenario A: Teardown and build on RM 1-1 lot. (15,814sf lot supports 5 units)

5 1,800sf units

3bdr/3ba 2-car attached garages

$2.4MM all in for acquisition, lot development, construction.

$3.125MM exit at $625k/unit ($347.22/sf). Pro forma and due diligence available upon request.

Scenario B: Buy/hold

$5,400/mo gross=$64,800/yr x14 GRM - $907,200 theoretical value.

Effective cap rate at purchase = 7.5

Value at prevailing cap of 4%, at $47,620 NOI = $1.19MM

Scenario C: Flip

Purchase: $650k

Rehab: $60k

ARV: $930k

Happy to share analysis and due diligence upon request.

I have this property under contract at $650k right now, closing set for 1/24, but could be extended. Here's the listing:

https://www.redfin.com/CA/San-Diego/7478-Hyatt-St-92111/home/5225746

Thanks for taking a look and considering.