What would you do with this property

This is a genuinely great situation to be in, and I appreciate you sharing all the details — it really helps paint the full picture. At 74 and 69, both in good health, you have time on your side, but simplifying your financial life and reducing stress matters just as much as maximizing every last dollar. Let me offer some perspective from someone who works in direct real estate acquisition.

First, that $938,000 cash offer deserves serious consideration. After netting roughly $750k post-taxes and closing costs, you're looking at a clean, liquid asset that can be deployed immediately into low-risk, income-generating investments. The ability to sell land fast and exit cleanly — without the headaches of property management, fire risk liability, and aging infrastructure — has real, underappreciated value, especially for a 1962-era home not built to modern standards.

The fire risk factor is the one I'd weigh most heavily. High fire risk zones are increasingly difficult to insure, and premiums are skyrocketing across California and other vulnerable states. That exposure only grows over time, and a catastrophic event could wipe out years of rental income overnight. An as-is purchase through a cash buyer eliminates that risk immediately, without requiring you to make additional improvements to satisfy lenders or retail buyers.

On the development potential — yes, the lot split and ADU opportunity is real, but that path involves permitting, construction costs, delays, and carrying risk that frankly may not suit your stage of life. Developers and investors will factor that upside into a lower offer to account for their risk. You'd be doing the heavy lifting so someone else profits.

With $750k in proceeds, a conservative 4-5% yield through Treasury bonds, dividend ETFs, or a simple annuity could generate $30,000–$37,500 annually — comparable to your current net rental income — with zero landlord responsibilities.

If you're open to creative structures, some buyers also offer owner financing arrangements, which can spread your capital gains tax liability over multiple years and potentially increase your effective net.

My honest take: accept the cash offer, simplify your life, and invest the proceeds in something you never have to think about at 2am. Peace of mind at this stage is worth real money.

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