In this episode, closing on a $20K Texas property required updated on-the-ground intelligence from the listing broker to confirm post-trade-war market conditions still supported the original $40K minimum exit strategy.
Key Takeaways:
- Pending Comps Trump Sold Data in Volatile Markets Sold comps from early March became unreliable post-April trade war escalation, making pending deals and verbal offers the only relevant indicators until mid-to-late May data became available.
- Broker Activity Levels Signal Market Health The broker reporting the busiest two-to-three-year period with consistent site visits and offers post-trade-war provided confidence that the specific submarket remained insulated from macro headwinds.
- Market Analysis is Now Mandatory DD Using tools like the Reventure app to identify 20%+ overvalued markets became non-negotiable, with extreme caution required regardless of positive price projections in overheated areas.
Listen to learn the exact questions to ask brokers and the timing cutoffs that separate useful comparable data from dangerously outdated information.
(Podcast transcript below)
Hi, Chris Duff over at Serious Land Capital, vacant land funding partner. Today, another very timely and recent update on market and how we’re approaching at least one of our properties. I know I recorded a few days ago about a smaller purchase, know, basically right at our minimum purchase price of roughly 20 grand
that we anticipated selling in downside scenario for at least a double, though possibly could sell for a triple based on where we’re anticipating the initial list price. Perk test came back all solid, really no key issues regarding property characteristics, nice flat land. It’s a little bit of a slower market, but.
you know, terms of characteristics in relation to where that property is, no real problems. You know, we had looked at this one over a couple of months ago. It’s just the closing has been delayed. There was, the title company had a drive like three hours each way to go to,
abstract out some records that were only available in print, which added some extra time to process here. So I know I was remarking again that, hey, just based on the market, the way it’s going, even on a daily basis, we may have to consider adjusting terms.
backing out of certain deals based on like, you up to date information. We don’t make any final decisions until the wire is out the door. So I had called the presumed broker for this particular property today and just checking, you know, since last time we spoke, especially post trade war, like how is activity looking? And can we, you know, recomp out the area?
to see are things still in line with what we’re kind of thinking again, you can really only use pending comps at the moment, or maybe offers that are coming in verbal or otherwise, whether they’re accepted or not, because that’s going to be the most critical info here because true sold comps post trade war of early April won’t be available until mid to late May, as I’ve remarked prior.
So, you know, I wanted to get a little bit more on the ground info and this broker, you know, even with all that context of mine, he’s like, Hey, this particular area has been the busiest they’ve ever seen in at least two or three years. no signs of slowdown. So, and he was like, you know, even since we’ve talked probably early March, perhaps, he’s like, yeah, I think we could list potentially even higher for this particular property, you know,
drive just drive 60 K and Should hit our you know minimum targeted 40 no problem, but yeah, you never know until properties actually listed things can always change We’ve learned many times over that you can’t count your chickens before they hatch we just do the best we can in terms of risk management and High-level calculation for
what are worthwhile gambles when it comes to purchasing properties and funding them accordingly, especially markets like this. So that was a good sign. You know, I grilled him in more depth, like just, okay, you know, can, can you put together those comps here? You know, we’re anticipating closing on Friday. Can you show me which ones, you know, what they’re looking like? And he followed up right away. It’s like, yeah, I would feel very confident still at
you know, 10 K per acre. That’s where a couple of comps pended recently that were of comparable characteristics. and you know, the property that we’re buying is like just shy of six ish acres. So that would line up to roughly that 59 K list price, to go after though, of course, I, you know, was asking, you know, okay, those properties that pended when were they was that
prior to beginning of April, because that’s really the cutoff, right? When things really started getting worse in the market. And he’s like, yeah, you know, they were listed early Feb, ended mid March, which is a really great turnaround time, obviously, but still it’s, you know, I would have been more certain or more confident even if they had penned it within the month of April. So it’s like, okay, yeah, it’s still good, but you know,
Following up a bit further again, but you’re saying you’re still getting a ton of calls Site visits even offers coming in brokers like yes, you all the above for that still very active. So With all of that in mind, especially being like a relatively lower price Property or like okay. Let’s let’s still go ahead with this one It’s about as de-risked as you can be in this market, especially from a capital standpoint Still seems to have solid
margin, you know Broker is you know, very close to the property in you know terms of you know Geographic location where he’s at so it’s not like this is kind of a newer area for him and Has had a lot of success in the area. So it’s like alright, we Aligned ourselves as well as we can here I hate throwing
more money out right now as we’re waiting for some of these other larger properties to come back. But it makes sense. Let’s go ahead and close this baby out. So that’s how we’re proceeding there. But, you know, again, hopefully based on the pod I did a few days ago in terms of, you know, how we’re approaching last minute updates, we have to adjust terms. Do we back out of deals like this now gives you a tactical example of how exactly we handle.
checking in with last minute up-to-date diligence and what are the key questions to ask in relation to assessing the market when the macro has changed so significantly over the last couple weeks here and how you have to orient your questioning. What’s actually…
you know, actually relevant for your DD when it comes to pending comps, you know, what, what are, what, what is that like on the ground knowledge and, activity being amongst, realtors and so forth, in the area and how confident are you like in relation to letting out a lot of capital, for certain deals here. So, you know, for us, like 20 K’s that’s
barely noticeable for us in terms of our total pile and how it can affect our bottom line. But still have to be smart about it. Whereas for other people, it’s like 20K would be on the higher end for properties that they purchase. So it’s all relative in regard to that. But hopefully this is helpful in that regard. We did get some good news about that larger Texas property, the near million dollar sale.
is I hate to jinx anything. I’m not that I believe in jinxes, excuse the phrasing, but you know, checking with that broker, he’s been in touch with the buyers even today and last week and they are moving full steam ahead aware of all the macro factors. They still think the numbers look very solid. We should know even this Thursday, whether things are like fully going to line up with the county and they’re already like friends with most of the decision makers on the county. have not encountered any red flags.
Just yet, I’ve been even signing other seller related docs today. Hopefully we could close this one out sooner. I would be signing a huge breath of relief if we could get that one out and recapitalize. Be feeling a lot more stabilized and secure within the business. And then we can kind of, all right, take a deep breath, be ready for whatever the market kind of brings and
You know reset our underwriting criteria accordingly, which is what we’ve already been doing Regardless so more to come on that. I hope I have more good news to report on that end here shortly With that serious land dot capital for any of your funding needs land daily diligence Facebook group for zero cost for your land deals. Just got off a session doing that just now Three pretty interesting deals possible subdivide opportunity was way too risky
in this particular environment, that’s probably a case study for another time. lot of red flags on that one. And then landpricer.ai, I’ll be reporting on that one more as well. was meeting with my CTO earlier today and have an excellent path forward for really sharpening up the user input process to reduce the user input probably by like 85 plus percent.
and just knock down the time spent on reviews significantly just by using AI models. So that was the whole point from the start. Now the tech has really caught up to what we need and what our users need, what our company needs. So more to come on that. With that, subscribe and share. We’d really appreciate a review on Spotify or whatever platform you’re on. That only helps us grow and get the word out even more. See you tomorrow. Take care. Bye.
