In the 1860s and 1870s, Forster took the first steps to diversify the productivity and income of the Santa Margarita ranch.

In the early 1870s Forster sent his agent, Max von Strobel, to Europe to advertise the colonization potential of the Rancho Santa Margarita, patterned upon the Anaheim colony.
 Strobel also sought buyers for Santa Catalina Island, in which Forster owned a share.
 But Strobel died in London, and in 1873 Forster sailed to England, returning to Liverpool after a 43-year-absence.
 Forster traveled on to the Netherlands, where he sought to recruit settlers for the ranch by offering household heads 160 acres (0.6 km²) of land, five cows, two horses and sundry supplies, with rent forestalled for the first two or three years.
The Dutch government ordered an inspection of  Rancho Santa Margarita before it would approve of the plan.
 Forster returned to California in July 1873, unsuccessful in selling Santa Catalina Island but still hopeful for the colonization of the ranch.
The inspectors arrived during the heat of August and were unimpressed.
Forster's colonization scheme failed.
He then tried to establish the town of Forster City on the north coast of his property.
 Three families settled there by 1876, and some 35 voters were registered in the village in 1882.
The town, however, survived for only a few more years.

The potential for railroad development across the Rancho Santa Margarita also captured Forster's imagination.
In 1880, the California Southern Railroad, in close cooperation with the Santa Fe, began laying a line from National City to San Bernardino, which would be an eventual fink with the Topeka road.
North of Oceanside, the tracks turned east and followed the Santa Margarita River across Forster's ranch.
Early in 1882, from his home near the river, he could hear the sounds of track being laid, but did not live to see the line's completion.
In the 1860s and 1870s, Forster took the first steps to diversify the productivity and income of the Santa Margarita ranch.
In the early 1870s Forster sent his agent, Max von Strobel, to Europe to advertise the colonization potential of the Rancho Santa Margarita, patterned upon the Anaheim colony.  Strobel also sought buyers for Santa Catalina Island, in which Forster owned a share.  But Strobel died in London, and in 1873 Forster sailed to England, returning to Liverpool after a 43-year-absence.  Forster traveled on to the Netherlands, where he sought to recruit settlers for the ranch by offering household heads 160 acres (0.6 km²) of land, five cows, two horses and sundry supplies, with rent forestalled for the first two or three years. The Dutch government ordered an inspection of  Rancho Santa Margarita before it would approve of the plan.  Forster returned to California in July 1873, unsuccessful in selling Santa Catalina Island but still hopeful for the colonization of the ranch. The inspectors arrived during the heat of August and were unimpressed. Forster's colonization scheme failed. He then tried to establish the town of Forster City on the north coast of his property.  Three families settled there by 1876, and some 35 voters were registered in the village in 1882. The town, however, survived for only a few more years.
The potential for railroad development across the Rancho Santa Margarita also captured Forster's imagination. In 1880, the California Southern Railroad, in close cooperation with the Santa Fe, began laying a line from National City to San Bernardino, which would be an eventual fink with the Topeka road. North of Oceanside, the tracks turned east and followed the Santa Margarita River across Forster's ranch. Early in 1882, from his home near the river, he could hear the sounds of track being laid, but did not live to see the line's completion.
John (Don Juan) Forster