[quote-permabear]. . . The only thing is we’re very design-savvy people, interested in modern architecture. . .[/quote]
permabear, I don’t know if you can get a construction loan based on the 80% – 85% LTV scenario you describe here.
Assuming you can, if you build, you will be subject to building on already subdivided lots which will be situated in a community facilities district. You will have to pay the MR all during the time it takes you for the permitting and building process (1-3 yrs), even while you are living somewhere else. The MR will likely be greater than $5K per year and there may even be high monthly HOA dues connected to this as well, whether or not you have even broken ground and/or are even using the HOA’s facilities.
If you buy your land inland rural (ex. Lilac Rd or Valley Center surrounds), it will not be situated in a CFD but you will have to, more likely than not, bring in or place all utils there yourself and bring water to your property. This could SIGNIFICANTLY add to the cost of your $1.2M estimate.
May I suggest you contact owners (in your selected areas) of properties which are of authentic modern architecture and see if they will sell? Beginnning approximately 2022-2023, these mid-century properties will be eligible for Mills Act property tax treatment if they have a significant local history or designer. By that time, you will be able to save =>$10K per year in property taxes after successful processing of your Mills Act application by the county.
If you can find a property with authentic modern architecture that is a little shopworn or even needs a bit of structural work (due to subsidence) that you have the know-how and skills to fix, then this would be your best investment, IMO. These properties will not lie within a CFD.
You may be already familiar with these charges, but the Metropolitan Water District “kickback” is currently about $7,500 – $8,000 for a new dwelling, not to mention the local water authority fee for laying your meter, that is, after all your pipe is laid to city or county and CWA specifications.
IMO, it’s a much better investment to rehab an existing property where someone else has already brought in (and permitted) all the utils long ago (at a much cheaper cost). This way your property’s (interior and exterior) environment cannot be duplicated by anyone and it therefore will somewhat insulate you from the vagaries of “comparable recent sales” which will help to keep your property’s value from intermittently going “underwater” in CA’s “boom/bust” RE cycles.
After you successfully obtain a Mills Act designation, it follows the property and thus is worth real substantial money upon sale, especially if its value is in the over $1M category.
See these links for examples of currently listed properties near your selected area:
