In this episode, a ~$70,000 infill lot near a major Texas metro gets evaluated and ultimately passed on despite a 60-70% probability of a $20,000 net cash outcome. County-level data from Reventure reveals a 238% inventory surge since 2022, days on market pushing 90-101 days, and a projected 6.3% price decline over the next year. The macro case for patience overrides the surface-level deal math.
Key Takeaways:
- A 65% Win Rate Can Still Be a Bad Bet When the downside includes a 20-30% chance of capital sitting locked for 6-plus months (which can quietly become 12), opportunity cost kills the risk-reward math even on deals that “pencil.”
- Reventure Data Is a Deal Killer (In a Good Way) Inventory up 238%, days on market near 90-101 vs. a 65-day historical average, a $23,000 income-to-affordability gap, and a 6.3% price forecast decline are the exact metrics that separate disciplined operators from ones who force revenue.
- Thin Comp Environments Multiply Risk The only sold infill comp in the subdivision closed mid-2024 at $135,000 with zero active comps available, forcing reliance on imperfect comparables and adding real exit uncertainty that the probability math alone doesn’t capture.
- Urgency Is a Cost Structure Problem, Not a Market Problem The pressure to take borderline deals is manufactured by overhead and anxiety, and operators with policed costs and cash reserves are the ones who can actually wait for better deals, which have been surfacing nearly every week in 2026.
- National Overvaluation Requires a Built-In Correction Buffer With single-family residential likely needing a 15-20% national price cooldown to restore buyer demand, even markets that look healthy today are being watched for the same trajectory already playing out in this Texas county.
Tune in for the full breakdown of exactly how to stress-test a deal when the math says yes but the market says not yet.
(Podcast transcript below)
Welcome to Get Serious, we’re at Serious Land Capital. We have successfully funded over $6 million worth of land deals with industry-leading 41 % operating margins. So today I wanted to read through ⁓ this week’s newsletter about a deal that we had deep dived into within Texas and a lot of the macro-related ⁓
details that ultimately made us go in a direction we might not have taken even a year or two ago. Got a lot of great feedback about this one, excited to dive in. So the title of this newsletter was Why We Walked Away From a 65 % Win Rate. What I’m thinking about.
Why a deal with a 65 % win rate still isn’t worth taking in the nastiest buyer’s market in decades. We recently evaluated a roughly $70,000 purchase price infill lot near a major Texas Metro. Even with our high bar for infill lots, that’s where we’ve encountered the biggest losses in our land investing career in the past.
This particular lot checked a lot of boxes. It was an established neighborhood, no utility question marks. There was room to undercut the active market and there was a realistic exit somewhere around the $120,000 mark, which would net us roughly $20,000 cash on a 50-50 split covering a few months of overhead in a real estate down cycle.
perhaps a 60 to 70 % probability of that outcome. That’s the kind of deal we would have taken a swing on a year or two ago without much hesitation. But the underlying local market metrics, which were sourced from Revencher, include several brutal detractors. And this is where patience and discipline separate the operators who survive long-term from those who fade out.
Here’s county level data, which is nearly identical to the zip code breakdown, which we will often compare to and utilize county level data for higher statistical power when appropriate. And I encourage you to really sit with these numbers. In that particular county, for sale inventory has surged from 44 active listings in 2022 to 149 today.
by far the highest on record. That’s a 238 % increase in roughly four years. The inventory surplus, which is defined by how much higher current for sale inventory sits versus the long-term average for that month is running at 72 % above normal. Again, the highest on record.
Days on market is pushing 90 to 101 days, creeping up since mid 2022 and steadily above the long-term average of roughly 65 days since a short-term dip below that 65-day mark at the start of 2024. Just about tied for the highest on record in a days on market perspective. Also, the salary needed to afford a home in this area
sits at around $103,000, while actual median income hovers around 80,000. So that gap, which you can guess, is the highest on record. A loan tells you where buyer demand is headed or more accurately, where it already went. Also, the home price forecast is down 6.3 % over the next year.
FYI, Revencher has a positive predictive accuracy of greater than 70 % when it comes to annual pricing forecasts ⁓ with the collective data indicating a historic market in favor of buyers. On the newsletter, if you want to check it out, that’s on seriousland.capital, I include a graphed at home price forecast, which just shows pretty much ⁓ a straight down line.
⁓ in favor of buyers in this particular market. ⁓ One more thing, the only infill lot that sold in that same subdivision we were looking at ⁓ over the past three years, remember we generally ⁓ heavily discount any data that’s more than lagging 12 months. The only infill lot that sold ⁓ closed in mid 2024 for
$135,000. No active comps in the same neighborhood either to compare against forcing us to utilize similar but not one-to-one comps. So that thin comp environment combined with deteriorating fundamentals creates real uncertainty around exit pricing and timeline. So when the math quote works but the risk doesn’t fit the reward.
So we’ve got a deal where the most likely outcome, again, roughly 60 to 70 % probability nets us 20K in cash, but there’s an estimated 20 to 30 % chance the lot sits for six months or longer, tying up capital and adding carrying costs. And perhaps a sub 10 % chance that we take a small net loss on the deal. So.
Those odds in isolation look favorable. Most people would take a 60 to 70 % win rate all day long, but here’s what gets missed. The opportunity cost of locked up capital in a market where better deals will inevitably surface, and FYI, almost every week this year, we’ve been presented with a potential deal more attractive than the last, though some won’t materialize for another quarter or two.
⁓ Combined with the reality that, you know, quote, six months or longer can quietly become 12 months in a market this soft. And we’re living this right now with one of our ⁓ subdivision projects ⁓ that, you know, are incredibly nice properties on paper, but buyer pool ⁓ is significantly diminished and it’s been a pain to get those to sell.
And that is ⁓ understating ⁓ the situation. So we are attempting to get the seller down ⁓ another $10,000 from this Texas lot to create more margin, to largely eliminate the risk of loss and give us a greater capability to undercut the market in order to move the asset. But it’s a long shot to get the seller to agree there. ⁓
And having to be extra conservative never feels good, by the way. I don’t know who does feel good about that. ⁓ Being a Debbie Downer when it comes to deals, ⁓ there’s always that voice saying, quote, you’re leaving money on the table. But we’ve been burned enough times in the past to know that the table has a trap door when you’re not as careful as you should be. Recall, real estate is hyper local.
but the macro trends are creeping everywhere. And remember, not every market looks like this. Some areas in the Midwest and Northeast part of the U.S. have maintained strong seller dynamics and there are pockets across the country where inventory is still tight and demand holds or is even increasing. We’re not painting the entire U.S. market with one brush, ⁓ but here’s what we are watching closely.
Many of those stronger markets in the US are seeing their overvaluation rates steadily climb. The overvaluation metric, which compares an area’s current home value to income ratio against its long-term average, is north of 20 % in many of those ⁓ hotter sellers markets, similar to what was seen in many of the COVID boom markets and still not balanced out in many of them.
And then I referenced the overvaluation data for that Texas County. Again, you can find this on the serious land capital website, which showed that this particular county spiked up in overvaluation, know, peaking in mid 2022, similar to a lot of parts of the country, and then just absolutely collapsed as values collapsed down to roughly 1.1 % overvalued as of the time of…
this taping in early 2026, ⁓ which is solid and one of the more positive ⁓ signs here for this particular county. Again, there’s plenty of other COVID markets where those overvaluation rates are still highly elevated. And if you just look at the country overall, there is significant overvaluation, which again is why we’re roughly baking in.
that the entire real estate market, particularly single family residences probably needs to cool down by 15 to 20%. Yeah. ⁓ Over across nationally in order to really encourage buyers to get back into the market strongly. So that correction ⁓ in regard to, you know, the overvaluation rates and the increased prices for real estate was painful for a lot of people who bought at the top.
And that pain is still being doled out from a low demand perspective, as I noted earlier, with those really rough metrics related to buyer demand and historical lows or historical highs when it comes to, you know, gaps of, you know, income required to afford a house versus actual income and so forth. So markets that still look quote healthy today.
⁓ could follow a similar trajectory ⁓ if, really when, ⁓ price appreciation tips the balance toward buyers or we continue to see meaningful job losses or wage growth that doesn’t keep pace with inflation or resulting from other macro shocks, you know, such as unanticipated impacts of war, ⁓ which is highly relevant at the time of this taping as well. ⁓ Remember, patience is not passive.
⁓ so from other conversations we continue to have, and from getting visibility into how other companies run their deal underwriting, ⁓ there’s still a widespread tendency to rush deals and quote, force revenue. get it payroll, software costs, marketing spend. The overhead clock doesn’t stop ticking just because the market got harder. The temptation to take borderline deals to quote, keep the lights on is real.
We deal with the same pressures internally, though we can afford to be more patient than most because we relentlessly police our overhead and are sitting on significant cash reserves to ride out turbulence. Never forget that the rush is imaginary. The urgency you feel to close something, anything, is manufactured by your own cost structure and anxiety, not by the market itself.
The line between emotion-driven deal-making and showing up every single day to move forward methodically without shortcuts is a razor thin, but the outcomes couldn’t be more different. One builds a business that compounds over decades. The other builds a business that implodes the moment luck runs out. And as my business partner Everett routinely says, quote, people get lucky until they don’t.
Having lived through the downside of that approach more times than I care to mention, that lesson is thoroughly ingrained in how we operate. We constantly see examples of stunningly poor deal structuring, particularly when external capital is involved. And comp selection, or the lack thereof, that makes us physically recoil in astonishment.
It may have worked to this point, but the market won’t forgive sloppiness forever. What we’re building to sharpen the edge even further. So through the incredible strides that AI models have made, even over the past month, ⁓ we’re talking February of 2026, the improvements are staggering. And specifically through tools like Claude Cowork, ⁓ which I…
recorded on last week, if you hadn’t listened to that episode, we’ve already begun building and testing an initial version of a Serious Land Capital chatbot, which is modeled after the acclaimed CalChat Plus bot from Callan Faulkner and the Uncommon Business team, our AI coach, coaches. And you can think of the Serious Land Capital chatbot as a conversational underwriting assistant built on my personal voice and incorporating
tens of thousands of data points and lessons we’ve collected across countless land deals routinely updated with our latest actual underwriting from flips to subdivisions to entitlement projects to transactional deals. Some of you might be thinking, hey, didn’t you try something similar with land pricer and cut bait in favor of focusing on serious land capital? Totally fair question. First,
Lampricer is inherently much more ambitious technically and has been handed off to another operating team targeting appraisal firms at the enterprise level, a much more appropriate initial target market for that product. Next, the rapid improvements in LLM models and third party integrations now allow us to quickly build this chatbot solution internally without distracting ourselves from our core SLC operations.
leveraging the reams of data we’ve already collected over the years to serve both our team and the land investor community as a whole. What’s possible to build now with minimal technical knowledge and limited time intensive quality assurance, even compared to three months ago, you know, we’re talking at end of 2025 is night and day. More details coming soon.
Markets like this are exactly when the underwriting discipline you’ve built gets tested. Not when things are easy and almost every deal works. But right now, when the pressure is high and the temptation to stretch on pricing or get lazy on comps is at its peak. If you’re a full-time operator with routine deal flow and you want a capital partner who views underwriting mastery as their number one company value,
then send us your best deals. We write checks from $50,000 to a million dollars plus. We close 100 % of deals we commit to and we bring national underwriting experience to every transaction. Let’s grow together. You can submit your deal on seriousland.capital. We just updated the deal submission forms. Now ⁓ it allows for different deal types. It’s just more friendly to any investors who want to submit something to us, less back and forth.
So hopefully that helps and ⁓ we’re open to additional feedback there. Subscribe and share everybody. Hope you enjoyed this one. Looking forward to next time. Take care now, bye.
