This episode chronicles the strategic decision to cut prices 7.5-10% on a Louisiana subdivide despite still maintaining over 2X margins, after market analysis revealed conditions deteriorating 12-20% from original underwriting a year ago. The three premium lots (with driveways, culverts, utilities at street) were repriced from $315K→$283K, $360K→$324K, and $427K→$399K after recognizing that affluent buyers now cap total build budgets at $750K, meaning land purchases max out around $300K—and understanding that waiting for spring 2026 would likely worsen conditions further.
Key Takeaways:
- Price Alerts Trigger at $25K Increments Above $200K Cutting from $320K to $310K provides zero marketing benefit since buyer alerts typically set at $25K thresholds—strategic cuts must cross these psychological boundaries to generate new traffic.
- Markets Can Deteriorate 12-20% in Twelve Months Properties underwritten in early 2025 would require 12-20% lower exit pricing if purchased today given inventory saturation and sales velocity collapse—even conservative underwriting can’t predict all macro shifts.
- Break-Even at $160K Per Lot Still Allows Aggressive Cuts With all-in costs around $160K per parcel and lots listed at $283K-$399K, maintaining 2X+ margins provides room to cut prices multiple times without investor losses—downside protection enables offensive pricing.
- Multiple Price Cuts Create Buyer Perception Problems Each successive reduction adds “black marks” making properties appear distressed—better to make one substantial cut that triggers activity than incremental reductions that train buyers to wait for further drops.
Listen to hear the real-time strategic calculus of balancing investor returns against worsening macro conditions when holding isn’t viable and all marketing levers have been exhausted.
(Podcast transcript below)
Welcome to Get Serious, jumping back in, recording this one right after the Thanksgiving holiday. Really haven’t taken a more extended kind of restful break like that in well over a year. I, my wife and I remembering a year ago, we were using that weekend to potty train our daughter. So that was like the complete opposite of relaxing. So it was nice to step back a little bit, hopefully.
similar to you all as well. Seems like it’s you know, one of the only weekends, if the only one in the US where almost the entire country kind of collectively takes a little bit of a step back, you know, outside of it, if you’re in the retail industry as well, or in IK. So.
With all of that in mind, we were assessing the market pretty thoroughly for one of the larger projects we’ve been working on this year is this Louisiana subdivide. I’ve talked about it a number of times, roughly 32 acres split into three child parcels. A lot of value had done to it, driveways.
culverts, whole nine yards, utilities are at the street, so all you need to do is place a house pad and you’re all set to build on that thing. Well, all three of them rather. And just high quality assets, but the market has just been just really, really tough. mean, that’s the story for a lot of parts of the country here.
You know, but I think especially in this area, mean, just assessing it, we just have had some near miss or, some potential strong buyers that are still in the game, but not submitting firm offers here yet. And it’s just the natural part of a buyer’s market, right? You have to kind of play by the rules. I wrote about this for today’s newsletter. Once once you have a chance to receive it’s my.
2026 macro predictions. I won’t step on that too much, but I really don’t perceive most real estate markets getting much better next year. If anything, I’d expect them to soften even further. So it’s it’s kind of tricky, right? Where you know, pricing will solve issues of moving properties 95 99 % of the time.
in our experience, assuming there’s not something glaringly bad from a characteristic side of things. Kind of regardless of seasonality, especially in the South or the West, mean, there is some seasonality around the holidays, but we’ve traditionally had very strong Decembers from a Dispo perspective. So…
I’m cautious about like, you know, holding back and not expecting really any sales during these times, but you also have to be strategic. It’s like, you know, the more price cuts you may do with certain properties. Um,
You know, it just puts additional black marks on the the property from a buyer’s perspective So it’s like yeah, you don’t want to be leaving money on the table but like how substantial the price cut is enough to get something to Start getting more activity and like we’re based on the online data were and even some of the site visits we’ve Like we’re right on the verge In what I would perceive to be
stronger potential buyer activity. But again, even though we are such specialists in underwriting, like the market can just so oftentimes just surprise you or kick you in the nuts, so to speak. And you just have to deal with the realities that come your way regardless of how good your underwriting might have been in the first place here. And when I was assessing
market earlier today, I mean there’s there were like two sales of over five acres in like the relative area that we’re operating in that were north of five acre sales a lot but we’re kind of below five acres and just lower price not as premium properties and just so much inventory on the market and I guess just it’s substantially different from when we underwrote these properties
Approaching a year ago close to Yeah, I think it came to us in Jan maybe late January of 2025 so yeah, it’s about a year and Where I would have underwrote those properties if we only got this property today compared to a year ago Like I would have probably taken off
You know, 12, yeah, between 12 to 20 % of the anticipated exit per acre pricing compared to what we underwrote a year ago. Like it’s just, you have to undercut more now looking at today’s inventory and just getting the lack of sales. Like it just changed on a dime. You know, markets don’t always behave like that, but it’s definitely one of the tougher ones we’ve seen in quite a while here.
And so it’s like, know, luckily we still have so much downside protection and it’s very unlikely to lose money on these lots. and still have a lot of room to go. Like they’re still priced over two X of what we are all in on the mat, you know, low carrying costs. but nevertheless, it’s like, okay, you know, if investor involvement, you’re always trying to get the best price for qualified assets, but also being mindful of market, you know, close to six ish months in.
for one of the three lots, five-ish months for two of the three. And just trying to figure out, what’s that right pathway here? And so we’re doing 10 % cuts on two of them and like 7.5 % on our most premium lot as of today. And I think that’s gonna put us…
much more range like there was an argument to you know like one of the lots was listed for 315 for instance and there was an argument okay yeah you can lower just under 300k because a lot of buyers will have um price alerts especially north of like 200 ish k set for like 25k increments so if you’re doing a cut from like a 320 to a 310 or something it’s really not going to be beneficial to you um because you’re not hitting that threshold like 25k tends to be um
where those alerts are set. you have to kind of keep that in mind as far as the strategy here. And so I’m like, yeah, we could do that. But if we did a full 10 % cut, it was going to bring it down to like 283. I’m like, yeah, know, seven 15 ish K difference. Like it’s just not that much, but it could bring the right buyer in, you know, into us here. Like I need to get some type of movement on these properties. So, okay, let’s cut it to that. One of them we were bringing down from
360 to 324 and then one of them from 427 to 399 That’s our most premium lot here And still would be a great blended exit even around that, know, even if we blended I Mean just to give you an idea like to break even on these we would have to Sell for Like roughly one
60 ish 160 ish, you know net Return for each lot. So like we have still quite a ways to go quite a ways To to get to that level so like still very downside protected and I think again we’re right on the verge there but You you can probably hear it in my voice and just like the back and forth going on you like it’s What is the right tactic to do in a very tricky?
like really nasty buyers market. And how do you know you’re making the right move here? Again, if we were longer term holders, you the taxes on these are like $2,500 a year, like really low holding costs. Like you could hold these for like five years and be fine, but that’s not our game, right? Like we have investor money, we have preference on the capital invested here. Like we want to turn these over, keep growing. it’s at like, okay, where is that right pricing? We have to strike.
Because otherwise from a marketing side like there’s no there’s nothing else. We really haven’t tried like we’re on across You know every single platform, you know all the Facebook groups. We have tons of physical signs We did a whole bunch of outreach out to neighbors cold calls cold texts like
We’ve tried pretty much every lever that I’m familiar with outside of like the more expensive ones where you could like host buyer parties or do radio ads. We don’t have the budget to do that. Like that’s a really expensive play. you know, anything that’s like relatively budget conscious, like we’re taking advantage of, our broker’s just been on top of this from day one. So it’s not a broker issue either. You know, we’re about to re-up for another three months here.
Because I do like the incentives, you know, we only signed six month listing agreements. If we need to redo, let’s cut that in half and just like, we want to keep everybody on the same page. If something hasn’t moved in six months, like, okay, well, let’s really try to figure out how to pick up the pace here. We’re probably not going to get the best return that we were hoping for, but you know, we have to adjust what the market reality is in front of us. Like you can’t rationalize your way through.
through difficult markets. You just got to find a way to get the right price to get accepted by buyers that are just deeply on the sidelines. And one thing the broker was remarking is that even these, and it’s a more affluent area, even these higher income buyers, they’re more capped at the moment of like they’re willing to put 750K all in to like a residential.
build out that’s inclusive of the land as well as what they’re building the house on. from a land perspective, that means that they’re capping out closer to that 300K number. So then they have 450-ish for a full improvement on a high quality piece of land like that. with these price drops, we’re getting right in that range where it seems we should get some more triggers.
based on just based on that data point. And like, yeah, we’ve had two super strong buyer leads that were anticipated, put offers down on all three parcels, like within the last few weeks. But, you know, holidays and who cares what the excuses are. It’s just been hard to solidify. Yeah, one of them is a personal relation of our broker here. We’re still working on that one. But it’s like you can’t wait around forever to at the same time.
so I just wanted to kind of share this a little bit more meandering, update, cause I spent most of morning, reviewing all of this just to, again, I’m like, this was always, always the hardest problem with this business. I’m sure, you have a similar situation or have dealt like dealt with something like this. so I just want to at least share our thoughts on how we’re trying to put all the pieces together.
and also show, yeah, it’s just sometimes you’re, you’re pretty much all the time. You’re not going to have a complete information to, to look at. and especially like nowadays, like if, if you were more bullish heading into next year, which I’m not, you know, you could potentially just hold, you know, across the holiday season into spring. And we have done that for previous assets, but I just do not think the market in most areas is going to improve.
In fact, I think it’s going to, you know, still stay status quo or worsen across a lot of markets next year. so I’d rather just not play that waiting game. I hope I’m wrong because then it’s just way easier to move stuff, but, you know, that that’s not the bet that I’m making right now. and, you know, we’ll, we’ll kind of see how that plays out, but hoping, this can spur some activity and I can share some other news on what might’ve worked for us.
and hopefully help you all out as well here, but that’s the nature of Dispo. You gotta pull some levers. Usually the best, almost always the best lever you have to pull is price. So just make sure, again, your buy price is always low enough that it allows you to pull that pricing lever as many times as you need to to get something to move and not bankrupt your business. that’s the simple side of it.
but in practice, hard to execute on. So keep that all in mind. SeriousLand.Capital for any of your funding needs, 50K plus. mean, we’re still very active. mean, reviewing millions of dollars of deals, made an offer on a 450K-ish potential subdivide last week. So if there’s opportunities to strike, we’re gonna go after them, even being mindful of very difficult buyer’s market.
these guys to adjust you can play in any any market here if you know what you’re doing and Land Daily Diligence I’m going to review some other deals that just came in as well other potential subdivides here subscribe and share everybody take care now talk to you next time
