This episode details a commercial property negotiation in North Carolina’s Research Triangle that dropped from $450K to $250K in one weekend conversation. The seller’s medical expense distress, combined with strategic positioning and rapid execution capability, created a potential 3-4X return opportunity on a quarter-million-dollar deployment.
Key Takeaways:
- $200K Discount Unlocked by Honesty and Speed The land investor’s transparent negotiation—explaining the 2-year timeline to reach $1M versus immediate $250K cash for medical bills—convinced a distressed seller to accept 44% less than asking in under one week.
- Commercial Requires Consistent Transaction Precedent Unlike 99% of commercial deals with stale comps or unrealistic pricing, this property showed routine sales between $700K-$1M with clear buyer demand, making the $250K entry literally impossible to lose money on.
- Velocity Beats Perfection at Deep Discounts At $250K versus $450K, engineering studies and soil testing became unnecessary—the price provided enough margin to absorb worst-case development costs while offering multiple exit paths including reserve auctions and wholesale flips to other developers.
- Economic Distress Creates 2024’s Best Deal Flow This transaction represents one of the strongest deals in six years of land investing, proving that positioning with liquidity and rapid execution capability captures opportunities others can’t move on fast enough.
Listen for the complete due diligence framework and exit strategy on a deal that exemplifies distress-driven investing in 2024’s market.
(Podcast transcript below)
Welcome to Get Serious. So I wanted to do a quick interjection of some really interesting deal update before I get back to the Hormozi Live event notes, just because I think this one is super exciting, very relevant, love to get this stuff top of mind for you all. again, our investment thesis
has really continued, you know, in the land industry, like you’re always looking for motivated sellers, right? But I think even more so just seeing the incoming distress and growing distress within the economy. I mean, you can see all the issues going on on the macro side, know, jobs related to like, you know, pretty much everything.
Macro wise is like not that encouraging from an economic health perspective. I know people will point to the stock market, but like it’s, it’s really kind of just a bet on AI. And even from the stock market, like it’s, it’s really just the top 10 % of, uh, you know, um, folks within the wealth bracket in the U S that, you know, have, have exposure. Um,
Again, 90 % of the stock market is owned by the top 10%. 50 % of it is owned by the top 1%. So it’s so, so top heavy, you know, for such a loud number. So we just have to be aware of that. Whereas like, there’s just so much other shakiness across much of the remainder of the market. Actually, I mean, this is another discussion, but I think like inflation numbers are probably less likely to be continuing to creep up, you know, since we see rents.
you know, kind of tamped down and decreasing on average across much of the country too. So that’s a whole nother discussion, same with oil prices. Nevertheless, all of this is just like, you know, some general shakiness that I think is impacting a ton of people. Like look at these, you know, anticipated healthcare premiums expected to go up. I mean, my wife and I and our kid, like we utilize healthcare.
marketplace exchange, know, as entrepreneurs, know, the Obamacare set up and yeah, it’s like super expensive monthly plans for like crazy high deductible, like not great health insurance. Now it’s going to be even more expensive. And like we’re in a fortunate position where we can like, you know, eat those costs. It still hurts more than, you know, I would like it to. But you know, how many other folks are struggling with
expenses like that and so there was a I’m getting sidetracked here but like it the thesis is just like okay we’re sitting on liquidity to await distress to happen and like it’s just started to come a bit more often here like it’s it’s it’s paying off as far as our strategy to be able to act really quickly when that distress comes up so we got this commercial property which again first I’m like
commercial is usually not as encouraging to go after. And it was in North Carolina, kind of near the research triangle, like really hot area, one of the most resilient areas of the country. When it comes just to, you know, the residential market in particular and commercial tends to follow Resi. And there was like a lot of precedent for routine commercial sales in the area here, like a lot, you know,
99 % of the time people send me commercial deals. That is not the case. Like it might be just, you know, first a commercial lot like in a residency area or there’s, really can’t find like any recent sale. There’s stuff that’s just been sitting on the market forever with no real activity and like the sellers are just looking for unrealistic prices. So like our…
risk threshold for going after, um, you know, commercial properties, like it’s just higher compared to Resi on average. So, you know, usually the buy prices are higher, lower buyer pool, like longer time on market. It’s just, you know, on average going to be riskier. And so this property was supposed to be for 450 K buy. And, um, you know, seemed to have precedent for selling between like 700 ish to maybe a million.
at the top end, could be like a really long hold time. to, you could, you know, you had to go through just a super slow city where there’s no real entitlement risk. But you know, if you wanted to work with a buyer, but you might be to get under contract within a couple of months, like it could take close to two years to fully exit out of the property, but you could sell for around like a million dollars, potentially a bit less. And so like at that 450 K number,
especially at that timeline, it really didn’t make sense to pursue it, especially again, like we’re going to be more conservative. I’d be thinking, okay, there’s like really solid precedent for to sell this for at least 700,000, based on the comps in the area, you know, maybe like worst case 600. so like if you’re buying it for 50, there’s just really not great margin there.
To work with especially for a longer time. So, you know, usually when we look at a deal for funding You know some funders just throw out. Hey, this is just not for us and sometimes we will do like it that you know, it’s Not at our minimum price threshold or it’s like there’s just not any solid Comps on this market that you know, we can really think that any price is gonna work or like just too inferior the characteristics again if we’re in like the bottom
quarter of characteristics, I won’t even consider purchasing the property in this market nationally. So in this case, like, yeah, solid asset here, but, you know, the pricing is just off here. And we knew like, it was a tight turnaround time, we had like two weeks when this land investor reached out to us, it’s like two week close 450k. Like we’ve done that before. But you know, it’s it’s not great here. And we knew the seller was distressed. You needed
He had bills to pay primarily for medical expenses and had bought this property for 400K just over 10 years ago. And so it’s like, yeah, basically at that break even price, especially net of opportunity costs, inflation and all that. so, you know, but again, looking at that whole time, I was like, yeah, does not make sense at that price, but I’m just gonna throw it out there. Like you get this guy down to 250K.
This becomes like really interesting here because that that accounts for that type of risk, know We usually prefer to just dispo assets and sub 12 months But to me like timing it just needs to be priced properly I think I feel like I podcasted a bit on this more recently sometimes a lot of stuff going on But now it’s just like more concrete details here So worth repeating in more detailed fashion
And so it’s like, you know, at that number, yeah, 450K doesn’t make sense, but 250, yeah, could make sense. Especially if we needed to hold it for potentially longer here, where it’s like, it’s throwing out a price where there’s like effectively no chance to lose money, like literally zero. Just looking at the inherent market there and could be worth like the opportunity cost to hold on to an asset for that long.
When we understand there’s like pretty consistent demand in that area and could be worth us taking a swing on something like that So usually like when I toss out those numbers like very rare like I mean, you know But most of the time the sellers like yeah, no no chance You know or the land investors tell me yeah, this is already like the bottom dollar I go well, here’s a number if you ever get back to them like this would be a lot more interesting at this again most the time
It’s not gonna work out and when I toss that 250k number out and this was over this last weekend I’m checking into my email and and land investors like hey, it’s guys actually it’s gonna take the deal But he’s like, you know only if we can close this this coming week. So it’s like a sub week Process to decide on you know committing a quarter million dollars cash
but the guy was willing to take 200K off of his sales process. He could eat a big loss too from his 2014 purchase. yeah, medical expenses, a quarter million dollars cash. Not a lot of people can close that quickly. And again, credit to the land investor for handling the negotiation well. It’s just, know, the honesty is really the best policy.
you know when you come to the negotiation table generally and the land investors like hey I refer you out to the broker working with like yeah you might be able to get million bucks for this property but it’s gonna take two years whereas yeah like our hands are tied as far as the money we can bring to the table here like I know you want 450 but with this we’re gonna have to sit on this for a while like 250 that’s all we can do and this guy took it and so we really had to scramble so like you know
Okay, but you know, to me, this is just like exciting. Like I can work early on a Sunday morning. Like I prefer, you know, it’s a whole another discussion, but like I prefer Slack in the system to like be able to jump on these opportunities right away. Because this is what we look out for. Like there’s potentially like three to four X, you know, profit margin in this, even if it takes a bit longer to hold. You know, broker very, very solid has done a lot of business in the area.
tens of millions of dollars worth, was responsive on a Sunday morning. This is stuff I want to see the land investor working with us, very experienced as well too. So all of those are, especially if you have to move quickly, positive for getting something over the table. going over the various DD with the brokers, like…
Really, you know, ideally you could have gotten a bit more DD on like some engineering studies and just seeing, you know, how much, I don’t know, rock is in the soil and so forth, just to see how easy it might be to develop. Just like even if it comes back like worst case scenario, like you’re buying at a price that is just an absolute no brainer. And so like we’ve seen a few of these deals this year where it’s like in this market, you know, we’ve been doing land for almost six years now.
And like some of the best deals we’ve ever seen have come in this year that have just like, man, this is just a screamer. So that’s why like, yeah, tougher economy to work in. There’s no doubt. it’s just tougher to run a business, but those opportunities, if you are set up for them are definitely out there to be able to jump on. And, you know, this broker was mentioning too, cause I was already under the impression. Yeah, this could take like well over a year to sell, but he’s like,
at this price that you’re getting, you can also attract buyers who would be willing to purchase the property at a discount, which could still be like 500 to 600K, like still a double, with the understanding that then they would go through the entitlement process on their own or potentially look to sell it to another buyer and fully entitle it out. So it’s almost like…
You know, we’re flipping to, you know, if you get ever a position where you can like flip to a flipper, that’s just a really strong position to be in because we have the optionality. It’s like, okay, yeah, we could, depending on how the market pans out and the buyer pool shows up, somebody presents like an excellent offer. you know, we could consider waiting that potentially full two years or, you know, generally I’m more about philosophy of capital. So it’s like,
Yeah, we could potentially exit this thing for at least a 2X, sub six months ideally. And it seemed likely based on that type of price point. Plus there’s an interesting auction pathway to do too, but a reserve auction fortunately not a absolute like I’ve talked about before and experienced. It’s one of most stressful time in my life. So you could set it up and where this broker has a lot of.
Experience doing a reserve auction in the area things would perform like equivalently somewhere between like the 500 to 700 K range Approximately as well still would come down to the last minute, but at least you have reserved to work with And so that to me would be like the more interesting pathway Compared to waiting the whole time. So just like you know, I got I prefer velocity of capital generally Keeping my internal rate of return numbers up
and an optionality and like who’s gonna complain about the 2x. So that is what we’re planning to do here. We completed our due diligence, got the site visit in, like everything is squared away here. Anticipate, like by the time you hear this, we’ll have closed on the property. So pumped about this one, wanted to interject before more notes from
Hormozzi here. Again, deals can be found here and maybe like the best deal that we’ve ever seen. it just sometimes we keep surprising ourselves by the quality of deals that are coming our way. This, if you properly set up your business to work through distress and not even necessarily like messy title distress. I mean, that’s like great. You can do that, but just general economic distress, being ready to move.
have liquidity to jump on opportunities and like be ready to strike. Like, yeah, I can drop everything on a Sunday to like get this stuff over the finish line. That’s what it takes to win in this market. exciting stuff, more to come. SeriousLand.Capital for new funding needs, 50K minimum buy price. Hope to do more of these ASAPs that send them our way. Land Daily Diligence Facebook group.
A lot of other stuff going on more to come here subscribe and share everybody take care now. Bye
