I could afford that but I don't think that the ROI will ever even after I get rid of the mortgage will justify the massive capex. 

Just be really careful here. 7% is NOT a good rate for this deal at all, and youre going to have to generate a massive amount of gross income each month to stay solvent.

I always recommend standing out from the crowd by providing your investor buyers massive value and good, accurate data.  

My point was a similar situation in PA or TX would be much less taxing...there’s no way to get around CA massive income tax.

Because once you stabilize the property, you will have created massive equity and drastically increased the cash flow.It takes anywhere from 6 months to 24 months to stabilize a property.

we do a lot of infill building.. this only works in HIGHLY desirable areas @Wayne Brooks  as Wayne states not sure were your thinking the value play is here.now there are plenty of folks that buy cheapo lots in FLA like Lehigh acres then sell for a few grand more on contracts those are the land flipping guru's you see that's what they teach.. and there are millions upon millions of lots available for this type of activity generally in FLA  and West Texas  AZ CA and other areas that had massive land speculation booms in the turn of the century.. think Lancaster Palmdale in CA there are million plus platted lots there that get traded around at tax sales every year.to find land with value to builders you need infill in established areas.. close to down towns.. in areas that are regentrifying .. lots that have shadow plats beneath them. or you can split using a lot confirmation technique ( common in Portland)  you need to work areas of Scarcity .. 

I would break even on it (at best) if it werent for the massive run up in DC real estate over the past decade and a half.

Massive loan docs take time. 

Plus in my personal opinion it is way too saturated and there will be less demand for rent in the future due to the massive supply. 

Neighborhood with massive growth in the last 5 years may not have massive growth the next 5 years.