This episode analyzes a 29-lot portfolio deal north of Austin where the seller faced distress from overleveraged inventory in a correcting market. The lots had full utilities but sat in an area experiencing massive demand collapse post-COVID, with new builds at $350K stagnating for a year while only 50-year-old homes at $115K-$120K were moving.
Key Takeaways:
- COVID Boom Markets Face Prolonged Corrections Housing bubbles in the South, West, and Southeast are in early innings of multi-year corrections, with Austin experiencing a 20% price drop over three years.
- Discount Pricing 50% Below Broker Quotes When new inventory at $350K sits for a year, target acquisition at $7,500/lot instead of broker-suggested $15K to account for severely restricted buyer pools.
- Reventure App Now Mandatory Due Diligence Use zip-code-level data on overpriced versus underpriced markets to avoid investing in areas with collapsing demand—residential land values directly correlate to SFR market health.
The Reventure app’s demographic and demand data has become essential for funding decisions, particularly as demand unexpectedly shifts back to Midwest and Northeast markets.
(Podcast transcript below)
Welcome to Get Serious. Today I wanted to go over a case study, a portfolio deal, actually a couple of them that were sent over to us and I reviewed on June 12th, 2025, Lend Daily Diligence Facebook group, and that’s your cost review of your land deals ⁓ Mondays and Thursdays, afternoons.
⁓ so this individual had sent over a couple package deals in Texas. I wanted to focus on one primarily. ⁓ so it was like roughly 29, ⁓ buildable, parcels, think around a
quarter right now, they were a little bit less than a quarter acre each, but they were a bit further north of Austin near clean and they had full utilities. was basically part of a smaller master plan community and it just looks like whoever this seller was, they were a business, just, you know, probably a developer.
got into some distress and just trying to offload their inventory and move on from a deal where they got over leveraged and the home prices were going down and… ⁓
Also the demand wasn’t there possibly for, you know, built, ⁓ and, proved upon properties. So this is a, it’s a, it’s a growing story. It’s entering the mainstream more over the last couple of months. and it’s something I’ve touched on a bit here. I’ve picked up a lot of it from, ⁓ the Revencher, Revencher app, ⁓ founder Nick Gurley really encourage you to check out.
his short YouTube clips, again, very, very clickbaity headlines. I mean, we use clickbait too. You just, got to get people to open and stream your content. I get it. It’s just the name of the game. That’s how the algorithm works. But his data analysis is really, really solid, mainly focusing on the SFR market across the country and the… ⁓
the data, how it’s just really pointed out over the past few years that these COVID boom markets pretty much look at the West, the South, ⁓ Southeast, up into the ⁓ Carolinas roughly, and parts of the middle of the country like into Colorado, pretty much everywhere where just values were exploding.
as of like, you know, 2020 and a couple of years after that have been facing a massive correction. And many of these areas are still in early innings of a housing bubble correction where inventory is just sitting on the market, particularly a lot of the new builds from all the builders that have come in, anticipating increased demand. And it just far outpaced.
the demand that was available in these markets and just became way, way too expensive ⁓ for consumers. The whole story is more intricate than that, but like that is the basic idea where we’re in the midst of a correction. Real estate, is a cyclical business. You just got to ride the waves and know how to adapt. ⁓
over time and this is not something a lot of us picked up on. You know, I’m still pretty taken aback by it. if any of us would have chatted, you know, a few years ago, 2022, like that most of the home appreciation and where people are moving ⁓ or looking for homes now is more in the Midwest and Northeast than that was where everybody was migrating out.
to go down to the south and the west and that like, it’s just completely flipped. ⁓ Like that is a huge, huge shift that’s going to take, you know, probably several more years to really play out through ⁓ this ⁓ cycle in real estate. But again, who knows? There could be other, you know, black swan events. What happens if there’s another pandemic? Do things reverse again? Like it’s just…
You still have to be on your toes no matter what. Nothing is fully set in stone, but currently that is what the trend is looking like. You know, again, I’m based here in Austin. had the biggest housing correction in the entire country, like 20 % drop over roughly three years from, you know, 2022. And it’s like finally starting to see more buy signals probably by the end of, of 2025, but you know, 20 % drop, it’s massive.
a lot, push a lot of investors out of this. Like I have some neighbors who rent out their homes and some of them just been sitting vacant because they bought it at such a high price in 2022. And now, I don’t know if they bought it cash or mortgage, but a lot of these are a couple of these homes, the rent has also gone down too, in addition to home prices. So if you’re an investor buyer and trying to get
people to rent out your home, like it is a really nasty situation. ⁓ And so I’ve been seeing our next door neighbor where ⁓ there’s probably been vacancy for close to half the year out of this last year. That is just dead weight in terms of that asset there. And I’ve looked up their ⁓
you price they’re trying to rent and, you know, it’s not like advertised like 3000 a month. Um, and the going rate now is like maybe 2,400 for that type of house. So it’s just, it’s a big gap. And, uh, you know, I can see it firsthand where, um, things have shifted dramatically. So that brings us back to this, you know, 29, um, parcel purchase that’s, you know, in a far less desirable area.
⁓ like I’m probably, you know, 20 minutes from downtown Austin, where there’s still a lot of sales activity, but you know, if we’re talking, you know, almost two hours north, an hour and a half, two hours north, like there’s just going to be way, way less demand, for areas up there and you’re sitting and you know, this developer is just sitting on all these lots and they were kind of pushed the side of this master plan community. And so.
You know, I was looking at land sales there and there was like a couple. Um, you wouldn’t expect to sell all of those, you know, onesie twosies. You’d probably try to find another developer to take on that project. So instead I was looking at, right, what, what are these, you know, are there some existing new builds in the area? It’s still, you know, some home builders got involved here and I was looking at them and some of these houses.
are priced at the mid 300s, 350 grand, something like that. But I look in the days on market and they’ve been sitting for a year. And then in terms of what properties have actually moved within the last year, there was some 50 year old inventory that moved closer to like, don’t know, 115,000, 120,000. There was a nicer house that was a relatively new build that had a nice pool, so additive value that
I think sold in the mid 300s. I don’t know. I don’t have this in front of me again, but like that was the only other example, you know, one house that was higher price point in the entire last year. And then you have all this inventory sitting. And as a general rule of thumb for like sub 400 K price homes, like maybe the land trades at 10 % of that values. Then, okay, you know, you have this housing inventory for mid 300s. You would think, okay, chop that.
by 90%. So you’d be looking at like 30, 35 K and that’s what the investor sent this over is like trying to price these out. But I’m like, well, no, you have to actually look at has any of the inventory moved? These houses are just way overpriced. That’s just like some of these developers and the builders. Okay. They got over lever, but you know, you can’t come in and expect to sell at these numbers. Just look at this last year. The only things were selling were, you know, 50 year old inventory and then one like more premium house.
⁓ with, with some additional value add thrown into it. So, with that in mind, you just have to undercut like crazy. So, you know, if new inventory is not moving for a year at three 50, like what is the real number here? ⁓ how low can you go? So I was just chopping down dramatically thinking, okay, maybe some new builds if they’re not moving at three 50.
But you know, they are going to be better quality than some of these parcels that we’re moving for, you know, 115, 120 K that are 50 years old and only like 800 square foot. So is it somewhere in between there? Could they go for, I don’t know, 200 K, 250 K, like pretty big discounts from what is being listed. But
You also have to keep in mind, okay, 29 lots and in a little bit more inferior part of the neighborhood. Plus you would need to be buying at a price that you could flip to a developer where they’re going to want conservative pricing because there’s going to be a very limited buyer pool. In now some of these more questionable markets, especially again, you know,
the demand is just ⁓ much, much, much more reduced post COVID and these accelerated or elevated prices that are just unrealistic for a lot of today’s consumers. So again, you can look at how I worked through this within the land daily diligence ⁓ recording, but I was like, all right, maybe they could trade for upwards of 20K.
per lot here, even to another developer, but I would really want to undercut that much more. Like I want to price these maybe close to if they were trading at the level of some of that 50 year old inventory that was actually moving for 120, 130 K or something. So it’s like, okay, could you buy each of these lots maybe for 7,500 each and then be able to move it to a developer at a much more attractive price of like, know, 15, 15 K per lot.
to where they should have a lot more room. It’s like 50 % of what the broker in the area is saying. But again, clearly houses at 350K in the area are not moving. So you gotta dramatically reduce your expectations for movement on the property. So that’s why I was like, all right, you gotta undercut like crazy. If you’re gonna really take a risk for a play like this.
Your pricing is just gonna have to be exceptional. Otherwise just move on from the deal So my suggestion was like you’d cut your purchase price in half to be Start to be safe here. Even if you got cut That much more I probably still want to try to figure out. Okay, who are the developers buyers in this area? Can I try to do a double close type situation? Because your buyer pool is already going to be super small. So ⁓ Like that’s just such a high risk
⁓ Play there that yeah, if you’re gonna lay out equity for you know, again north of like 200 K ish ⁓ Even for 29 lots. It’s such a discounted price ⁓ It’s still it’s still pretty risky to to go ahead and do that. So that’s just to run you through this case study I’ll probably be discussing this topic a lot more. I’m actually gonna be using the group venture app as part of our diligence I just think the the way they’ve built out the product and actually showing the ⁓
pretty much live ⁓ updated data, or at least on a monthly ⁓ basis on zip code by zip code level on ⁓ what areas of the country are overpriced versus underpriced, where the demand is, demographic shifts and so forth. Again, it’s oriented towards SFR, but as land folks where a lot of the land that we’re buying is related to residential demand, say well over half the time for most of us, ⁓
this is really useful info to have and you know to the point to of like, okay, we a lot of us would discount a lot of the Northeast and Midwest, but we start looking there a lot more because of the More significant demand for Residential property in those areas of the country now, which again is a complete 180 from where we were a few years ago, so
Got to adjust. Hopefully this is helpful. A serious land dot capital for any of your funding needs. I already mentioned land daily diligence and then landpricer.ai for the most reliable land funding tool on the market. With that, subscribe and share. Take care everybody. Bye.
