This episode exposes the dangerous assumption that off-market comp performance can be replicated through on-market channels. Chris walked away from a $1M subdivide project where a local developer had moved 400 acres rapidly through dedicated websites, 4K property videos, mass cold texting, and 40+ years of buyer list cultivation—infrastructure impossible to replicate without equivalent overhead and local presence, making on-market data the only reliable benchmark for most investors.
Key Takeaways:
- Off-Market Dispo Channels Are Apples and Oranges When established operators achieve premium pricing through proprietary buyer lists, financing options, and localized marketing infrastructure built over decades, those results cannot inform your on-market exit assumptions.
- Less Than 1% of Land Investors Have True Off-Market Dispo Most operators claiming off-market capability are running basic Facebook posts and buyer lists, not the sophisticated multi-channel systems required to consistently beat on-market pricing and velocity.
- On-Market Data Must Guide Conservative Underwriting If you plan to list with realtors across standard platforms, use only on-market sold comps and active listings for exit assumptions—ignoring off-market outliers prevents fatal overestimation of your own capabilities.
This episode reinforces why rose-tinted glasses destroy capital and why the downside case matters infinitely more than best-case scenarios when underwriting large projects.
(Podcast transcript below)
Welcome to Get Serious. So today I wanted to remark on dispositions and I think it’s almost everybody’s most crucial topic. When nationally we’re sitting in mostly a buyer’s market outside of certain pockets within the Northeast and Midwest parts of the country. But even then real estate is hyper local. So do your research before you buy anything. I know Seth and Neil.
Clements were talking about this on, recent RE tips for podcasts as well too, where, know, so much of the discussion it’s like, how do you dispo, how do you dispo? that’s really been the common theme for, I’d say like two plus years at this point anyway. And, you know, something we take a ton of, pride in it as well as try to develop our, strategies and tactics, continuously.
which is, again, take my word for what I share with a grain of salt when it comes to being incentivized to sell my own services. But yeah, as a funder, especially an equity funder, even if we’re more expensive capital, we are so diligent from a value add perspective because it’s our money at risk here. we have become…
some of the best Dispo experts within the industry. And that also comes with choosing the right realtor and, you know, making sure you’re, staying on top of them. Like we are the furthest thing from dumb money as, as possible. I probably don’t need to tell you this. If, if you’re listening to this podcast, given how much, content and, and, value we, we try to, provide, whether you work with us or not. so hopefully that, that knowledge.
And in hard fought wisdom comes across here, but, you know, the disposition side, like I can’t tell you again, how much time we spend, strategizing about that because dispo problems are like the biggest alarm, within, the company, if things are not going well, and the thing that will keep me up the most at night, more than anything. So I think that’s probably similar to a lot of folks businesses and.
We saw another example of a potentially larger subdivide project. And this is not the first time I’ve seen this, but you know, and this was a large play. This is like a million dollar purchase potentially could sell for close to double that. And, you know, probably it was. A major subdivide that wouldn’t necessarily need
significant planning and zoning department, like hearing approvals and so forth. it’s like, okay, what’s a minor subdivide versus what’s a major subdivide? Sometimes a bit of a gray area between that. would, you know, generally when I think of major subdivide, it’s more of like an entitlement play where you’re likely going to be selling paper lots to a developer or builder versus, you know, trying to dispo all the lots on your own.
Um, so that would be to me more of the distinction, how I would define it. Uh, but, you know, plenty of argument can be made there. So, you know, we’re, just going to consider it a minor subdivide where we might be doing, you know, 15 to 20 child parcel lots that could easily be considered a major, but we would, you know, dispose them on our own. And, you know, in this particular area, um, you know, there, there was a realtor who was very familiar, very bullish on the project. mean, of course most, realtors are right.
Um, and there was another like very well established local, um, you know, land flipper land developer, um, you know, kind of one in the same, um, that, you know, had a decades long track record of, you know, buying up larger acreage and, you know, splitting off the child parcels, dispelling them. Um, and they had just done like a 400 acre project recently and, you know, sold them off very quickly and.
but the, none of those were, were on market as far as I could see. Like it was, it was a full off market channel. And, know, when I looked at the underlying data for the market, like it was not as encouraging. Like it was an active market. but you know, from a price per acre perspective, I, you know, no surprise, right? Given how conservative we are. but the data was not as encouraging.
to me from, yeah, if we’re going to introduce like 15 plus child parcels and go after a million dollar project, like I want to make sure we are fully locked in and have enough margin to account for like pretty much any downside scenario to make it worth that chunk of change. If we’re going to put that amount of capital to work in a macro like this, a macro and a micro. And I just wasn’t seeing it. Like the numbers were and
You know, the price per acre I was thinking was not quite half of what was, uh, you know, what the realtor and the land investor were thinking, but, know, it was off by probably 30 % ish conservatively. Like, so it really made it, uh, much, much tighter margins. And so, but they were, you know, remarking, like, look, these, you know, this local group, they sold like 400 acres, you know, lickety split. Um, and like, you know, their design of the.
child parcels wasn’t even that great. But, you know, critically is like that it’s an apples and oranges thing, because again, it comes back to the Dispo channels. like, regardless of how these guys were designing their child parcels, sure, it could have been better, but their off market channels were just excellent. Like they had dedicated websites specific to each project. I mean, beautiful 4K videos.
you know, very friendly salesmen like walking through the various lots. They have like multiple financing different options to consider purchasing the properties. Like really, really solid marketing. They were doing mass cold texts to kind of anybody in the area.
They probably had a very extensive existing buyers list. Again, they’ve been operating in the area for like 40 some odd years. And that is really difficult to replicate. So again, this is not the first time I’ve seen this. We also looked at another project in Tennessee where it was kind of like a similar thing where, yeah, it might’ve been close to like a million dollar project and they’re…
Like the on market listings, like it wasn’t as encouraging, but then, you know, the land investor who brought us this, like, yeah, Hey, there’s this one company that just like sold off all their lots. But again, they have like a very extensive out of state buyers market who were just routinely scooping these things up at significant premiums for anything moving on market and generally like faster as well too. So it’s, it’s just, like when you see.
avenues like that unless you are operating a similar off-market Dispo channel that takes it and have you know both the staff as well as the overhead to account for all those Dispo related like that’s expensive to do all these you know mass cold texts and so forth and you know manage the staff to move this property or even have like on-site visits being local to the area and bring people out and
you know, kind of having like a party on the property to get people to sign contracts. Like that can work very well, but it’s, again, very difficult to replicate, and where you, can’t use that as a realistic example of how to anticipate the subject project.
from going when you’re hitting the market, especially if you’re thinking about utilizing a realtor and going on market because the on market data is different from what this other specialized company is able to get through off market channels. And very, very few land investors, I would say like less than 1 % actually have like a super solid off market channel, particularly locally.
If they work in an area, I know some folks have set it up and you’re just going to get different results like that. but you know, most folks do not have that set up. And so like, it’s a fool’s errand to think that, you can replicate those, results without having the infrastructure built in. Like I look at the price per acres that these off markets are getting. I can’t.
You can’t compare it to the on market unless you can do exactly what those folks are doing. So I get why it’s so attractive. You’re like, my gosh, they just sold, you know, 20 plus child parcels in like two months. But then everyone else operating in that area is not having those results. You can’t you can’t be looking through rose tinted glasses like that. It’s just that’s.
far too optimistic, especially again, in this macro micro where the downside just has to be considered first and foremost. Like there’s a reason why we’re so cash liquid and can routinely move our property so quickly because of how conservative we are and we consider the downside versus the upside. Like this is not a bull market. Even in a bull market, you’re better off served considering the downside anyway, but especially in a market.
like this. I just wanted to share that nugget that not all Dispo channels are created equal, not all companies that sell land in an area are created equal. Apples and oranges folks, like you got to consider the particulars. The data speaks louder than anything else. Don’t let yourself get fooled.
With that in mind serious land dot capital for any of your funding needs 50k minimum purchase price Land Daily Diligence Facebook group For view of your land deals subscribe and share everybody. Take care looking forward to talking to you next time. Bye
