Can you handle a net loss (negative return) just to speculate on appreciation?

Well maybe J.Scott because he also seems to think buying a house is like buying gas, because he doesn't understand why gas prices go up and down, supply and demand plays a very small part compared to market speculation BTW market speculation goes right back to Freakonomics how individuals, organizations, and businesses often exploit their access to information at the expense of others.Again J, if gas rose to $20 a gallon and fell to 20 cents a gallon the next day, you would not have to pay on the $20 for the next 30 years.

If something of value (cash) was exchanged for the option then you are in a better position... because you do have a contract.Without reading the option agreement it is hard to speculate beyond that... however with a straight purchase agreement you have taken an equitable position in the property and gives you many advantages that an option by itself might not give you.... it would depend on how a judge evaluates the agreement... and your only recourse had the seller walked away would have been to take them to court.

Whereas outside of your area its more speculation. 2) People spend thousands of dollars learning their chosen profession so dont get discouraged so fast.

As other people on here have said, that's speculation and more risky.  

I plan on making a move to Southern California in a few years, however, I am looking to invest with developers building high-end spec homes beforehand.I have been fascinated seeing beautiful speculative-built homes across the LA and OC areas and I plan on getting involved by the end of 2024.My plan is to invest passively in such developments while observing until I can develop such properties myself.Any advice, input, recommendations, or referrals would be much appreciated.I look forward to your responses.

And, my speculation, is you will recoup all that over time and more. 

If you are truly speculating then you may open yourself up to some criticism, and liability.

You'll want to be very careful about building speculatively, as you don't want to build homes that you cannot then sell quickly once completed.D.

So rather than speculate I would say that unfortunately this is probably one of those times you can really only turn to competent legal counsel.