I'm keeping this property for the appreciation (in a high demand area with great schools) and low interest rate for now.  

First there is no reason to buy a Townhouse "all cash" instead put 40% down and reap the benefits of an extrenly low rate, No PMI and the option to escrow.

I bought it about 9 years ago as a primary residence, which keeps my taxes low.

A total cost of 6.3Mn over 23 units equates to 274K/unit...this appears unbelievably low for San Diego...I'd want to see full development budget detailing hard, soft and financing costs as well as month by month projections showing construction and lease up cash flows.What's the 2.2Mn purchase price for?

That $1400 rent actually makes sense given the low purchase prices.

@Eric Lowe Here's an article with cost segregation FAQs.

Quote from @Monish Anand: I'm a fan of the low prices and my plan is to STR since I currently run a short term rental business.

I moved from the SF Bay Area to live and invest in Reno, NV because of it being much more landlord friendly, low property taxes, close to Northern CA and Lake Tahoe, strong appreciation, and I understood the market after speaking to a bunch of people and feeling confident about the future here.  

The current owners have extremely low occupancy and are open to selling.

I think there's going to be a serious thinning out of STRs because of the overall market and interest rates, and people just getting fed up with the platforms, unless one of the newer no/low fee platforms takes off.