This episode clarifies the deliberately low barrier for deal submission (APN, state, and county only as absolute minimum) while explaining the few hard blockers that trigger automatic rejection. The volume-focused approach accepts higher slop rates in exchange for easier operator access, filtering deals quickly through baseline requirements (2X gross margin target, $20K-$500K purchase range though flexible, signed purchase agreements or strong seller conversations). Hard rejection triggers include landlocked properties without clear easement paths at the $20K+ price point, mortgages exceeding purchase price or excessive delinquent taxes relative to property value, complex rezone requirements without recent precedent, and messy title situations below 50% undivided interest without clear co-owner contact pathways.
Key Takeaways:
- Bare Minimum Submission Wins More Deals: Only requiring APN plus state and county (rather than demanding full due diligence packages, broker opinions, or completed analysis sheets) removes friction for operators while allowing rapid internal filtering, accepting higher initial volume in exchange for faster deal flow.
- Quality Trumps Documentation for Initial Review: The most complete due diligence package on a mediocre property loses to minimal information on an exceptional asset, so focus finding better deals rather than perfecting presentations of marginal opportunities.
- Hard Blockers Are Few But Absolute: Properties lacking legal access without clear easement solutions, mortgages exceeding value, or title complexity below 50% undivided interest trigger automatic rejection regardless of other characteristics, so resolve these before submission rather than hoping for exceptions.
Listen to the complete episode for detailed explanations of soft factors that influence funding decisions, geographic focus areas across 40+ states, and how underlying asset quality creates flexibility on otherwise challenging deals.
(Podcast transcript below)
Hi, Chris Duff over at Serious Land Capital Vacant Land Funding Partner, continuing our mini subdivide series here, primarily about minor subdivides, though there’s a lot of carryover just to general flips. And, you know, probably return to this topic many more times because it’s really…
kind of an evolving field and that there’s always various kind of individual characteristics associated with each type of subdivide deal. So just trying to provide a lot more general guidelines at the moment. So we’ve already discussed general requirements, like what we’ll look for in terms of spread for subdivide, as well as just deals in general. Preferred diligence periods, what we like to see when presented with a deal.
and now the next question that was asked is just our general funding requirements. so. You know, you, you, you can break that down a little bit further. It’s obviously pretty general. already spoke at length about probably the most important piece is the anticipated spread on the deal. We look for roughly two X conservative gross margin, incorporating all the anticipated value add or associated expenses with.
the deal and still leaving that roughly into X margin, regardless of absolute value of the deal. And we also remarked in the previous episode about what we’d like to see when deals are presented to us. Again, generally the more info the better. But in terms of general funding requirements, so different funders will have in a
sense of what most of us are looking for. I’d say, yeah, it’s pretty, it’s pretty typical where a lot of funders will look for that roughly, you know, 50 cents on the dollar type of property. you know, some flexibility depending,
the particular area and maybe the absolute dollar value.
That’s going to be fairly, fairly consistent. know, various funders might have different caps or minimums associated with deals that they’ll go after. Generally for us, we prefer, you know, at the moment, you know, roughly 50 to 500 K in purchase price type deals, nothing below 20 K purchase price. We can go higher than 500 K is just generally in situations like that, given the capital requirements, if we can.
figure out how to get the seller to possibly finance the property. And so it’s less capital intensive. That’s going to be more intriguing. know, if it’s transactional funding, we may might be able to more routinely go higher because the capital turnover is going to be more significant. So, you know, we have some flexibility depending on the situation. But that that’s our kind of general paradigm that will operate within.
And like I mentioned, you know, some funders will be a bit more strict for deals that they might look at or not. Um, I prefer the volume approach. Like I’d rather look at far more deals and say no to more. Um, uh, but I want to make it easy to work with us as well. So, you know, while I did mention in the previous episode, Hey, the more info, um, you send the better, it’s going to make it easier and quicker for us to make a decision on it. We’re going to favor you more as a land operator.
But you know, an absolute minimum, all we need is an APN and the state and the county. And again, ideally have a purchase agreement signed or at least, you know, strong ongoing conversations with a seller for us to consider a deal further. So that, you know, should take 30 seconds to send over for us to initially start pricing out the property, which, you
is absolutely bare minimum because if you presented even less information, it wouldn’t even be possible to find the property in the first place. So that’s going to be our baseline requirement. Beyond that, and I know again, some other funders, might require a couple opinions of values from brokers or full kind of due diligence sheet filled out and so forth.
personally just think that that’s a bit too restrictive to get people over the hurdle to reach out to us. you know, personally, I prefer the volume approach where, you know, we might get more slop sent our way, but, know, we can kind of quickly filter that out. So that’s the price to be paid for having an easier filter to reach out to us. Beyond that,
You know, we’re national in focus here. Obviously some states are going to be more active in terms of land deals. You know, people ask, hey, what are hot counties? What are hot areas? It’s such a grab bag because you can have such ideal properties that might show up from a characteristic standpoint in a relatively slow market and they might still be a better buy versus, you know, super active.
Market where I have just a worse quality property. So, you know, it’s not a one-to-one type comparison But I usually tell people you know take the lower 48 states draw you roughly from Washington State all the way up to maybe Virginia on the East Coast Those are gonna be your primary flipping states. You know, there are some key ones in the middle Colorado Tennessee Arkansas come to mind some folks operate routinely in the upper Midwest, Minnesota and
Wisconsin, Michigan, and we have as well. but it’s just going to be a little less, less, less common. you know, terms of the thousands of deals that have been sent to us, there are definitely some states that we have not encountered yet. actually don’t think we’ve ever seen one from Hawaii. We have seen a couple Alaska ones.
I don’t think we’ve ever seen a Rhode Island come up. Most states are covered. I don’t think we’ve seen maybe a South Dakota, those Great Plains states, those are gonna be pretty rare from a flipping perspective, but we’ve probably seen 40 plus, maybe 45 of all the states in the country. Some of those might’ve only been once that we’ve ever seen, whereas we’ve seen hundreds of deals from Texas and…
North Carolina and Tennessee, for instance, I those are kind of old, old standbys from a land flipping perspective. But, you know, that just serves as kind of a general guideline there. I know people ask that all the time, you know, searching where are those best markets? And beyond that, you know, we still try to keep a fairly open mind. So we don’t necessarily have.
Restrictions on size of the property, you know, we’ll look from, you know, smaller infill lots to, you know, major acreage, whether it’s subdivide or just selling a parent parcel. We’ll look at, you know, possible entitlement deals as well. You know, some are going to be riskier on average, like if something doesn’t have legal access and there’s not a…
kind of anticipated route or even, you know, a good target for obtaining legal access. Cause maybe your pricing is just, you know, so solid and maybe the underlying asset outside of that access perspective makes it pretty interesting. Usually we’re gonna avoid ones like those, but if you’re like, Hey, I’ve already got a bead on this neighbor. We might be able to get an easement here.
or can kind of work out an agreement, have enough margin in this deal that we could purchase and get it squared away, great. But generally, if we don’t have legal access, I’m gonna be pretty cautious about that. Same thing for physical access. I mean, you really need both to make it generally worthwhile. And very, very rarely, again, because our…
paradigm is we want at least like a 20K purchase price property. If something is truly landlocked, it’s rare that you’re going to have a property sell for more than that on the open market unless somebody is really making a speculative investment. that’s usually not going to be our game plan or bet when we’re considering an unbuyer perspective. So that will be a tougher one for us.
to consider further when it comes to access. The other side is just how nasty is the title situation? I know we’ve started to advertise and advocate that, we can fund messy title deals, la Logan Fullmer and Clint Turner has pursued this more frequently now. There’s going to be certain thresholds for us to get involved. If you’re trying to collect up undivided interest.
valuable is the underlying property? Are some of these deals going to be more likely where we initially get involved and can start throwing money at it? When you only have 10 % of interest, but the remaining 90 % is just over one other owner or maybe a couple other owners and the underlying assets like really attractive. Maybe we do that versus something that’s even a little bit more complex and we might want you to
reach a threshold of at least 50 % of undivided interest before we consider getting involved with a messy title deal and how many other avenues still need to be cleaned up. Do you need to find some co-owner that’s totally off the grid? How easy are these people to potentially get in touch with?
That that’s going to change the situation as well. So, you know if title is pretty Difficult we we might consider bailing on pursuing the property further as well And again for sub divides, I know I could have mentioned this in the previous podcast but Understanding what the child parcel outlay might look like
If you already have it diagrammed out, we might disagree with it. We might try to reframe it. understanding, you know, is there a potential adverse selection risk for some of these child parcels versus not? That’s going to be another consideration of ours that might affect our funding decision. Or if we just consider doing investment in the parent parcel, if we think there’s enough juice on an exit for the full
acreage. So that’s that’s kind of it. From a requirements perspective, as you can see, like it’s fairly loose there. Again, we try to we try to cast a really wide net with only a few really key blockers that would prevent us from pursuing a property further. Oh, and generally, yeah, if there’s like a high mortgage on the property, it’s fine if there is so long as you negotiate with the seller.
to have those costs taken out of their proceeds or, know, if not, the mortgage is low enough that we could still, you know, roughly 2X the margin on the deal. But, you know, if the mortgage is just the outstanding mortgage is more than the anticipated purchase price is going to be for the property in full, or maybe you had delinquent taxes or owed HOA fees are too pricey.
in relation to what we would value the property, know, roughly half of the conservative market value, it’s not going to make it worth our while either.
So that’s probably it. Or yeah, maybe like a really complicated subdivide process, super long timeline, expensive to work with, higher risk for acceptance. That’s gonna be risky, like a rezone. That doesn’t have a lot of recent precedent. Those are also gonna be other items that we might just say, hey, this is not really worth.
worth us pursuing, but again, I don’t want to dissuade people because we’ve explored all of these. just depends on the underlying asset. If the underlying asset is good enough, it makes it far more likely that we’ll get tied into extra levels of complexity that we might not otherwise do for less valuable properties. So with that, SeriousLand.Capital for any of your funding needs, Land Daily Diligence Facebook group for
review of your land deals at zero cost to you and landpricer.ai for the most simple and accurate way to price land, subscribe and share. Hopefully this subdivide series has been helpful. Bye.
