This episode reveals the strategic decision to potentially cancel or renegotiate signed deals up until wire transfer, prioritizing capital preservation and market intelligence gathering over reputation concerns in extreme economic conditions.
Key Takeaways:
- Wires Out = Final Commitment Line All documentation and verbal commitments remain negotiable until the actual wire transfer occurs, with weekly broker check-ins planned for a late-May closing to gather real-time market intelligence.
- Institutional Players Are Adjusting Terms Multi-billion dollar deals at major hedge funds are seeing last-minute term changes and cancellations, validating the strategy of remaining flexible on smaller land transactions.
- Near-Double-Closes Provide Protection One pipeline property with a signed backend offer subject to conventional financing (with pre-approval letter) demonstrates the value of de-risked exit strategies in volatile markets.
Listen to understand the exact communication framework for maintaining optionality while preserving long-term industry relationships through transparent decision-making.
(Podcast transcript below)
Good afternoon. It’s Chris Duff over at Serious Land Capital, vacant land funding partner. Actually, I hadn’t done that greeting before saying good afternoon. Who knows when you’re listening to this. We’re not live here. So wanted to mention a couple other very recent updates. Kind of continued market turmoil is absolutely top of mind. So I’m just
hammering this topic because you know, it’s number one concern within our business as a whole here and You know, I’ve been reporting on some findings we’re seeing to other land investors who You know Provided deals for us to fund and so, you know updating them on the current strategy as well as other
more established land investors overall to you might be ahead of the game a bit in terms of our Focus on like, you know, basically fire sailing our portfolio outside of two larger assets So You know, I just want to comment even more regarding where we’re at within the market and
You know, currently we have three other properties within our pipeline that we’re set to close on. Fortunately, one has, uh, you know, it’s a near double close situation where we already have a signed offer on the backend. You we would have to fully close it. It’s still subject to conventional financing, but you know, there’s already a pre-approval letter, um, in place.
So we’re feeling pretty confident about that. There’s a couple title related issues that need to be solved for us to even close on the property currently that we’re waiting on, but you know, feeling strong about that one. Then we have another one that’s like a 20K buy that’s supposed to close in roughly a week. And that one also had some longer title.
issues, they’re supposed to close on this one probably like a month ago. You know, 20K purchase, that’s our bare minimum for what we pursue. And it seems to be something that should sell for, you know, a conservative double, potentially a little bit more than that. Nevertheless, like we’re just, we’re so cost conscious right now and focused on recapitalization that
Um, you know, I’m planning to reach out to the broker first thing, you know, right after this holiday weekend and really gauge how market activity has changed even over the past two to three weeks. Um, and, uh, you know, have to ultimately, uh, you know, make a call on whether to either push off the clothes further or, you know, still close, uh, as planned. You know, it’s a
small, small deal for us. So, you know, we think we have enough protection built in, but nevertheless, like it’s still additional cash that we’d have to allocate into an asset and do a very risky environment in our opinion. So, you know, we’re still cagey about that. And, you know, we’ve established
such a stellar reputation for, you know, always closing when we say we’re going to, um, and, and sticking with our word here, it’s just, we’re in such an extreme environment and, know, chatting with my core partner, who again, is at a much larger hedge fund and, you know, they’re updating terms on like multi-billion dollar deals or, you know, just letting competitors either take deals from them or, you know, like
All competitors plus them are just backing out of deals and, you know, changing terms last minute to account for these shifts in the environment. Like it’s, it is a cagey time and you know, we, just, have to be super, super smart about our capital. And I hate pulling, you know, like last minute bailouts potentially, but you know, until the money is wired out, we always reserve the right to cancel.
A deal or just push it off indefinitely like, you know, the market change is not a day by day basis and especially recently so I just want like final up-to-date information on where the market is for that particular asset and if there has been even increased trepidation Over the last couple weeks, which I wouldn’t be surprised and we feel hey, this is something we either have to cancel
or potentially even adjust terms last minute. Again, like it, almost, it almost makes me, you know, a of a nervous wreck, even, even ordering this to you. I’m just kind of sharing our thought process here on how conservative we have to be. And, just being.
You know, responsible from a fiduciary standpoint of ensuring that, like no deal is closed until it’s closed. And like, we need to look out for the future of our business and, you know, other land investors who, you know, trust us and look to us as a leader within the industry. like now is not the time to be going hard on offense. Like it’s.
And I love being on offense and I’ve mentioned that a ton of times before. That’s an easy switch to turn on. you know, staying patient and being on defense is, that doesn’t come nearly as easy to me. but you know, it’s, it’s what the market is calling for. That’s what my instincts are saying. That’s what the data is saying in my opinion. and again, if I turn out being wrong and things switch back to being, way more favorable in terms of
you know, bullish markets for land and real estate and, you know, the economy in general, it’s super easy for us to turn the switch back on and just go hog wild with, you know, funding deals more routinely again. So that’s just kind of what I’m debating there. And then we have a much larger deal, you know, a hundred K plus that we’ve been working on for months. was a messy title issue. We were supposed to close way back in late December, early January.
just took forever and we punted it out until late May just to, cause we’re expecting some other deals to come in to recapitalize. And cause you know, I really don’t want to put in extra liquidity to fund additional purchases outside of retained profits at the moment here. And neither does my partner. So that one, you know, at such a higher,
a higher cost basis. Again, I’m going to use the same strategy, you know, still check in with the realtor. probably going to actually, I’m thinking about this live. I’m going to check in on a weekly basis, even start this week and look towards, you know, every Monday checking in until the presumed close date. And again, if we really have to bail, I really don’t want to, the land investor who brought this deal, you know, worked really hard on it. It, um,
you know, is de-risked as can be from just a pricing perspective. The survey came back more favorable with like three extra acres in relation to the purchase price. it builds in a lot more protection from a PPA perspective, even in a down market. So like that side is.
something that we really have to consider. But again, if the market just happens to worsen even more over the next month, and some of our other inventory, even as we’re seeking to fire sale doesn’t really shake out, or some of the larger assets, you know, the one that the near million dollar sale that we have under contract, we should know within like a couple of weeks, whether they’re like, you know, 85 % firm on closing.
That could inform a lot of our decision-making on moving forward as well too. Plus we’ll have the child parcels from that Louisiana deal on the market by then as well. We’ll have some early insights onto marketability there. So, you know, to me right now it’s like, it’s all about buying time, all about buying time. And if, if, if things change, even on a day-by-day basis and we have to cancel a deal or try to punt it out further, change terms to make it more favorable for us.
like that’s, that’s just what we’re going to have to do. Like this, this environment calls for difficult decision-making. So just want to share that with you all there and our rationale behind this. Again, obviously we care, you know, first and foremost about our reputation within the land industry and delivering very solid results. And I don’t like backtracking from documentation that we’ve signed and so forth before.
But again, we’ve always maintained a resolute stance that until wires are out, we always reserve the right to change our position or just lose out on a deal and not choose to fund it if we feel it’s going to be too risky. So hopefully this helps convey that message and that we’re not just willy nilly making decisions like this.
It comes with a lot of careful consideration. Like we even had one parcel that was just listed a week ago and had two really strong buyers in. you know, one now is a bit more cagey because interest rates like jumped even a lot over the past couple of weeks. One we, you know, was dead set on giving us a written offer two days ago. And then, you know, the evening of that day, they were supposed to send it. They now are on the fence again. So it just like.
we’re seeing even within our business deal. guess just, you know, dispose, dispose are tough right now. It is like a extreme buyer’s market at the moment here. So, you know, I’m just trying to, you know, negotiate as necessary. I’ve told all my brokers, hey, if we get even an inkling of a possible deal here, let’s just get something signed. Let me offload this portfolio, recapitalize. be feeling a lot better.
when we can do that. So hopefully that is helpful. as we continue to navigate this environment alongside everybody else here, trying to bring you the most up-to-date information from our side and how we’re thinking about things. you know, again, we, understand our position as, you know, thought leaders within the industry and the amount of data that we have available in front of us inside information from, you know, huge institutional.
in investment firms, you know, plus our national exposure within our portfolio. You know, it gives us a lot of insight that a lot of other land companies won’t necessarily have. So trying to share this with you all for everybody’s benefit. And so we can navigate this all together with that in mind. Yeah, we are still open for business. Never forget that. Even if we kick out some deals and buy some more time and so forth, like
Incredible deals will still be funded. There’s no doubt about that. You check us out serious land dot capital people sending me deals still every day I haven’t you know found anything within this recent environment that is sticking out as You know a done deal here. There’s just there’s too many question marks But you know, we’re still actively reviewing you see us on our live daily diligence land daily diligence Mondays and Thursdays Check that out
And landpricer.ai still a ton of progress there. I know you’re reporting on more updates on that shortly Subscribe and share happy Easter if you celebrate take care and bye
