This episode challenges the “speed is king” narrative in land investing by explaining why longer diligence periods (30-60 days for subdivides) actually protect operators and funders from costly mistakes. The reality is that rushed decisions skip critical process steps that consistently produce better outcomes, and sellers of larger parcels typically prioritize reliability over closing speed.
Key Takeaways:
- Request 30-60 days for subdivide due diligence, then over-deliver. Longer diligence windows allow thorough third-party analysis, title review, and realtor assessments while still closing deals in half the requested time when possible.
- 95% of submitted deals get rejected in initial review. Only the remaining 5% warrant deeper investigation, so funders need adequate time to coordinate multiple parties (title companies, realtors, analysts) for the deals that pass initial screening.
- Reach out to funders immediately when contracts are signed. Operators who wait until seven days before close on 45-60 day contracts waste their own leverage and force rushed decisions that benefit no one.
Listen to the full episode to understand how strategic timeline management improves deal quality without sacrificing competitiveness.
(Podcast transcript below)
Hi, Chris Duff over at Serious Land Capital Vacant Land Funding Partner continuing our series in regard to how we approach subdivides, primarily minor subdivides. We’ll add another piece for major subdivides later on, but most people mentioned subdivides. It’s usually coming from a minor subdivide perspective. So before we just chatted about our
general requirements for what we’d look for, which again is like roughly 2x conservative gross margin, inclusive of all the costs that might go into funding or purchasing a subdivide or possible subdivide target. So the next one is just commenting on preferred diligence periods for subdivides.
So this is where we’ll try to bump up the total time for DD as much as possible. With the understanding that sub divides sellers of larger possible parent tracks, the time pressure in our experience we found is
less pertinent. They’re just looking for the right price, like a real cash buyer. Okay, can these guys actually move on a deal here? So usually we don’t have as much trouble getting some extra time to work on a subdivide deal. Usually any property that is being sent to us, whenever possible, we’re going to request take and
We have 30 days to work on this deal. Oftentimes we can complete our work sooner than that. You know, some of these items that, you know, our firm might not have direct control over, such as title company review of, you know, really the full title history or even our company docs scheduling out a seller or notary prep and so forth.
or getting a realtor out to visit the property and really assess thoroughly some of those items. Yes, you can get them done within a couple days here, but I always like to have extra buffer time just to reduce the chance of rushing to a judgment and skipping over key parts of.
process here. also have our, you know, we have a third party analyst who provides a full written diligence form for any deals that we invest into. again, we can kind of rush that if needed, but you know, to get a really thorough job done, figure out if there’s any other additional questions that we want to check in on. Yeah, having a bit of extra time.
is going to be preferred from that side. Because ultimately, we’re not doing anything unique here. There’s no secret sauce. There’s nothing special about our process. It’s the process that really has defined our results.
know, hewing as close to it as possible. know, occasionally things slip through the cracks and we have to learn lessons, update our process. But knowing that, okay, we have this asset here, needs to go through all these steps to feel very confident about it. Great. The more time we have, better with the understanding that we always try to over deliver on our ability to close. So, you know, always ask, hey, can we get, you know, 30 days here?
For subdivides, I’ll usually even ask for 60 because I really want to examine even further, especially if it’s a new area we haven’t operated in, what the possible approval process may be, or if it’s a significant capital outlay, usually north of 300k and 2.
certain properties we may look to bring in outside investment, just diversify risk. So usually we can raise capital relatively quickly there, but you know, the more lead time we have is always going to be easier. And then we can just tell the title company, let’s, you know, we’re asking for this amount, but you know, likely we’ll be able to close sooner. So very often when we asked for, you know, 30, 60 days,
we’re able to close in half that time as well there. So, I know within the land industry, it’s been kind of speed is king when it comes to closing deals and working with motivated sellers. You want to have capital availability to fund deals. again, we can move. Within the last month, we had
funded a 400K deal in less than a week when it came to us, you know, it’s kind of a special situation for something like that. But, you know, that’s breaking a lot of internal rules that we have. So that’s why we like to have extra time to work on it, you know. And I want to stress that that’s not necessarily the time it takes for us to…
arrive at a high likelihood that we’re going to fund a deal. Cause I know a lot of funders, including us will mention, you know, be able to get a decision quickly. It’ll get back to you within a business day and so forth. know that’s, that’s kind of a standard industry paradigm. What, what, whether that’s that, that accurate, I think is more. Debatable. mean, we always try to live up to that as much as possible. And the way that I try to break it down to people is, you know, the more info that you can send us that.
the better and I’m going to get into this in a subsequent podcast here. But if you can provide all the key info that we need to make a funding decision, great. But if you just send us, hey, you have a signed PA, here’s the APN, we have to do all the research, figure out what remaining DD is needed. Naturally, that’s going to take longer to arrive at a decision. That being said,
And the way that I try to break it down to people as well too, you know, cause I get it. you spend money to find these assets and so forth. And for me or another funder to kind of say, isn’t that good? You know, we really treat it as a numbers game here. And, we invest in like, you know, depending on the month, one out of 30, one out of every 50 deals that are sent to us, like it’s a very small hit rate to get that.
And roughly 95 % of deals sent our way we pass on or you know ask for renegotiation with the seller. Maybe we need some other items clarified that just you know, don’t make that initial cut. you know, usually a first look within a day or so of sending us the property we’re going to be able to arrive at that that remaining 5 % It might be a coin flip, you
50 to of those remaining properties we’re actually going to fund or not, depending on how the deeper diligence goes. So that’s where we’ll want to spend more time on the property, really make sure that we’re not missing anything or we’re just lining up all the other various third parties, again, title company, realtor and so forth, site visits to really figure out, is this one worth pursuing or not?
So hopefully that helps clear up that yes, we can get our initial review out with a pretty solid understanding very, very quickly. And then after that, having more time to work with, with the expectation that we’re going to over-deliver and close early, which is quite routine, or depending on kind of pressure from the seller and all of that, and depending how valuable the asset is, we can adjust.
as needed from that standpoint. yeah, buy yourself as much time as possible, especially for subdivides. If you can get north of 30 days, closer to 45, 60, that is always going to be appreciated. And if you do get that and you’re looking for funding on a property, reach out to funders right away. can’t tell you how many folks will, you know, they might’ve had that amount of time on their initial contract and then they reach out to us, you know, seven days.
before the close, even though they originally had 45 to 60. So the more lead time you can give us is always going to be helpful or find a way to extend with the seller. So wanted to convey that over. We’ll continue with this series for the next podcast, Serious Land.Capital for any of your funding needs within the land space.
Land Daily Diligence Facebook group for any of your land deals that you would like to be reviewed and landpricer.ai for the most simple and accurate way to price land. Subscribe and share. Take care. See you next time.
