Inherited Property in Newport Beach: Sell Now or Rebuild First?

When you inherit property in Newport Beach or Corona Del Mar, California's Proposition 19 creates immediate financial pressure. If you won't live in the home as your primary residence, it gets reassessed at today's market value.

For a Newport Beach property, this can mean property taxes jumping from $10,000 to $80,000+ per year.

Your Real Decision: Sell Now or Build First?

The question isn't whether to sell. It's how to get the most value when you do. You have two paths:

1) Sell the property as-is to a developer or buyer who'll tear it down and rebuild

2) Partner with a builder to renovate or rebuild first, then sell the finished home

Three things usually decide which makes sense:

• Value gap: How much more would a rebuilt home sell for versus the existing structure?

• Timeline flexibility: Can distributions wait 14-16 months?

• Risk tolerance: Is the estate willing to manage a controlled construction process?

Option 1: Sell As-Is (Fast and Simple)

This is the default path for most inherited properties.

When this works:

• You need cash now

• Multiple beneficiaries want their share quickly

• The existing home is already in good condition

• You want certainty over maximum value

• Market conditions are softening

Key advantages:

• Fast execution, typically 60-90 days to close

• No construction or timing risk

• Clean, simple distribution to beneficiaries

Trade-offs:

• Sale price is driven by land value rather than future potential

• Buyer gets all the profit from redevelopment - anywhere from $500K to $2M+

This option prioritizes certainty and speed over maximized value.

Option 2: Build First, Then Sell (Maximize Value)

The alternative is partnering with an experienced builder to reposition the property for a higher sale price.

This isn't a long-term hold strategy. It's about capturing the value instead of giving it away.

How it works:

You don't need to put in your own money. A construction loan covers everything: building costs, permits, property taxes, and even the loan interest during construction. No monthly payments from you.

ARCA handles everything. We manage permits, design, construction, and getting the home ready to sell. You stay in control as the owner, but we do the work.

We only win if you win. Our compensation is tied to the sale price above a certain number. If the home doesn't sell well, we don't make money either.

Timeline is 14-18 months from decision to sale.

When this works:

• The current home is small or outdated compared to what the lot allows

• Buyers in your area want new construction (almost always true in Newport Beach/CDM)

• You can wait 18 months for a bigger payout

• The numbers show at least 20%+ in extra profit after all costs

Key advantages:

• You capture the profit instead of handing it to a developer

• No cash needed from you during construction

• Professional team handling everything

• Potential $500K to $2M+ more in your pocket after all costs

Trade-offs:

• Takes 14-18 months instead of 60-90 days

• Construction can have delays or unexpected costs

• Requires proper underwriting and oversight

Managing the Risk

If you choose to build, execution matters. Here's what protects you:

• Fixed-price contract so costs don't spiral

• All loan costs disclosed upfront with interest covered by the loan itself

• Monthly updates so you always know where things stand

• Experienced builder with local track record in Newport Beach/CDM

ARCA has rebuilt dozens of inherited properties in Newport Beach. We know the permitting, the neighborhoods, and what buyers want. We structure these as collaborative joint ventures partnerships, not customer relationships.

Both Options Can Be Right

From a legal standpoint, neither choice is automatically better.

Sell as-is makes sense when you need money quickly, the property doesn't have huge upside, or you want zero construction risk.

Build first makes sense when the numbers clearly show major value creation and you can handle the timeline.

The key is making an informed choice based on your specific property and situation.

Next Steps

If you've inherited a Newport Beach or Corona Del Mar property:

1. Get current valuations, both as-is and as a finished new home

2. Understand when you need the money

3. Look at what the property could become given zoning

4. Talk to a builder who's done this before

ARCA Builders has helped estates and families maximize value on inherited properties throughout Newport Beach and Corona Del Mar. We can walk you through the numbers and options for your specific situation.

Contact us for a free property assessment.