Also make sure you are comfortable with some holding costs if the units don't get rented right away (if vacant).Also look into if there is rent control in the area that the property is located.

Like you a purchased my primary residence in 2017 as an estate sale and landed an amazing deal which still holds a large amount of equity.

Determine the cost of construction (hiring a contractor in the GNO area is going to start around $165-175/sqft to build) and be sure to include all holding costs, as well as interest in the loan.

You already seemed to conclude you are forcing this deal, I would agree unless there's a reason why this property will appreciate significantly in the near future and the 40 year amortization schedule allows you to hold on for that to occur. 

His reason was the only thing he knew to do with the proceeds was to loan it back out at 12%, and he would be "behind" where he is now in cashflow.His proceeds would have given him options up to and including PE, but he is a simple man and in his case holding was the option for now. 

Exit strategies are typically, refinance into a long term loan and hold or sell it for profit.Cheers!

I would not purchase MLS RE in San Diego as this time without value adds unless I was going to hold it at least 10 years. 

This is not yoursituation, but just to walk through the different thought processesin Holding/Selling that a friend of mine is going through.Helped my friend getinto the Self Storage business and walked him through the wholeprocess from evaluating the market, selecting a site, developing thesite, systems, financing, insurance, etc.

They tend to cost more to construct then they add in value, they are generally more valuable for a property you are holding as a way to generate more income.

Investment Info:Single-family residence buy & hold investment.