The sad part is that these poor returns don't even have to do with financing costs which will be an issue in the future this is simply poor performance by inexperienced operators.

Welcome to Bigger Pockets, Out of state (OOS) investing would be a wise decision, with Californias market is so highly appreciated.

Once you know your market and have built your team you can make these decisions yourself.

We are cash poor and cannot afford much good land outright, but could seek spec loans if needed. 

It takes patience to get a good multi (and decisiveness to act when the right one strikes).

Have your goals and "you're investing because" guide your decisions on where to invest.

Varied perspectives help in making sound decision.

Since your goal is to build a portfolio of rental properties, you’re right to weigh both the financial and practical aspects of this decision.

To avoid going through the same poor experience, keep reading.Even if someone gives you a referral here, do NOT make the mistake of assuming that the PMC will meet your expectations, just because they met the expectations of the referral source.In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.It's often a case of not doing enough research, as they don't know what they don't know!

From what I can tell, FTF did a poor job of monitoring the progress of the project and released funds to the developer when they shouldn't have.