Investment strategy
Equity through development, explained.
You provide the capital and own the property. We provide the strategy, underwriting and execution designed to increase what it earns, and what it's worth.
You own the asset.
You, or an entity you control, acquire and hold the property. It is not a share in a fund, and VIP does not pool investor capital.
VIP is engaged under a separate agreement to build the investment plan and coordinate the development. Architects, lenders, contractors and property managers each work under their own agreements, so responsibilities and fees are explicit. Your ownership rights, financing obligations and decision authority are set out for each project. We encourage every client to review them with their own legal and tax advisers.
How development creates value
Value beyond market appreciation.
Traditional real estate investors mostly depend on prices rising over time. Development adds a second source of value: improving what the property earns.
- Acquire an underused propertyA coastal property whose existing buildings use only part of what zoning and state housing laws allow.
- Renovate and add homesModernize existing units and add premium townhomes, often with rooftop decks and ocean-facing outdoor space.
- Stabilize the incomeLease up. Rent, minus vacancy and operating costs, is the property's net operating income.
- Value follows incomeIncome properties are commonly valued as net operating income divided by a market cap rate, the yield buyers expect.
A Pacific Beach example
ProjectedPreliminary projected underwriting from November 2, 2026 for an opportunity our team has evaluated; not completed performance or an offer. Estimated before selling, refinancing and ownership costs. Not profit or an investor return.
Funding a project
What does it take to own a $5.5 million development?
Not necessarily $5.5 million in cash. Here is the same Pacific Beach example funded two ways, and what happens to the owner's equity if the result is as projected, softer or under stress.
| With lending partners | All cash | |
|---|---|---|
| Total project cost | $5.51M | $5.51M |
| Lender financing | $4.68MAbout 85% of cost, as modeled; not yet committed | None |
| Owner equity | $0.83MPlus reserves for carrying costs and contingencies | $5.51M |
| As projected 4.25% cap, value $8.17M | +$2.66M+321% on equity | +$2.66M+48% on equity |
| Softer market 5.00% cap, value $6.94M | +$1.43M+173% on equity | +$1.43M+26% on equity |
| Stress case Income 15% lower, 5.50% cap, value $5.36M | −$0.15M−18% on equity | −$0.15M−3% on equity |
Change in the value of the owner's equity at stabilization, before selling, refinancing and ongoing ownership costs. Not a projected return. For simplicity both columns use the same total cost; an all-cash project avoids most interest, improving its result somewhat. A real project would also require reserves beyond the equity shown.
Leverage cuts both ways.
Financing lets you control a larger asset with less of your own capital, which magnifies gains and losses alike. At 85% financing, a small change in value is a large change in equity. Loans can require personal guarantees, terms change with the market, and overruns usually fall to the owner. Self-funding avoids lender risk and interest, but ties up more capital. We model both for every project you consider.
Funding options
Finance it, or fund it yourself.
Our lending partners finance eligible coastal infill projects, and we coordinate the introductions, applications and draw requests.
- Acquisition loans to purchase the property
- Bridge financing while plans are designed and approved
- Construction loans to build and renovate
- Interest and carry reserves built into some loans to cover payments during construction
Investors with available capital can fund the acquisition and development themselves. All financing is subject to lender underwriting and approval.
Sensitivity
Small changes in assumptions move the result.
Estimated value above project cost for the Pacific Beach example under different costs, income and cap rates. This is why we underwrite carefully before anyone commits.
| Scenario | 4.25% cap | 4.75% cap | 5.00% cap |
|---|---|---|---|
| As modeled | +$2.66M | +$1.80M | +$1.43M |
| Total cost 10% higher | +$2.11M | +$1.25M | +$0.88M |
| Income 10% lower | +$1.84M | +$1.07M | +$0.74M |
| Income 15% lower and cost 10% higher | +$0.88M | +$0.15M | −$0.16M |
Derived from the November 2, 2026 projected underwriting. Every project is underwritten on its own numbers.
Portfolio context
A different approach to building a real estate portfolio.
Public markets
Turnkey rental
Fund or syndication
Development-led ownership with VIP
Every strategy carries trade-offs. Development-led ownership offers a different source of value, with concentrated, leveraged and illiquid risk. Real estate can also carry tax considerations, such as depreciation and 1031 exchanges, that depend on your circumstances; ask your own tax adviser.
After stabilization
Your asset, your choice.
Hold
Keep a new, premium coastal asset for long-term income and appreciation, with professional management in place.
Refinance
Replace construction debt with permanent financing based on stabilized income, potentially returning capital while you keep ownership.
Sell
Bring the stabilized asset to market with our brokerage partners, and consider reinvesting in the next project.
Whether refinancing or selling makes sense depends on interest rates, lending terms and market conditions at the time.
Why coastal San Diego
Scarce land, lasting demand, demanding execution.
- Lasting demand
- Coastline, climate, employers and universities keep coastal San Diego among the most sought-after places to live.
- Little vacant land
- The ocean, terrain and established neighborhoods leave little room to build. New homes mostly come from existing lots.
- Room to add homes
- Many older properties sit well below what zoning and California's housing laws now allow.
- A premium product gap
- Much of the coastal rental stock is dated. New homes with rooftop decks, views and quality finishes stand apart.
- Local execution matters
- Coastal overlays, height limits, City review and construction costs vary block by block. Experience here is not optional.
- Where we focus
- Pacific Beach and nearby coastal and central infill neighborhoods.
The risks, stated plainly.
Development carries risks that a finished rental does not.
- Construction costs and schedules can exceed plans.
- City approvals can take longer, change the design or be denied.
- Financing terms, interest rates and cap rates can move against you.
- Lease-up can take longer, or rents can come in lower than projected.
- Your capital is illiquid for several years and concentrated in one property.
Our job is to help you see these risks before you commit, plan for them with realistic budgets and reserves, and manage them carefully. We cannot eliminate them.
See what a project could look like for you.
We'll walk through how we would approach a project for your goals, capital and timeline.