All Forum Posts by: Bryant Brislin

I'm a land broker in Southern California.  Subdividing a parcel, even just a simple parcel map to create 2 or 3 parcels can take some time/work/money.  I can try to answer question here and there on that matter, as needed.

I don't think there that many wholesalers that are making a killing.  Many are lucky to make 5k to 10k per deal, and that's usually a decent amount below what a typical agent commisison would be, plus usually the buyers are paying all the closing costs.  I'm only working on 2 or 3 at a time these days, and I'm basically a concierge helping these people with title work that they weren't willing to face, and I'm helping them figure out issues on houses they were going to abandon practically.  I'm also helping them get access to homes they didn't have access to for whatever reason, and I'm getting them to talk to their lenders who they've ignored for a year or longer.  If anything, I'm underpaid for as much work as I have to put into these, not to mention the divorces and probates where I'm waiting months for spouses and heirs to fight it out. I'm also helping with tenant and propert management issues, etc. Wholesalers wouldn't exist if agents/brokers could help on every type of deal, and if sellers weren't too intimidated/scared/not excited about working with agents/brokers.  I'm an agent, so I'm not anti agent/broker, I just think there is a lot of housing supply frozen in ice because sellers need a real partner to work through various issues they have before they can sell. I guess I'm not surprised because when I call my fellows agents, half or more of them can't be bothered to pick up their phone and would rather text, or whenever they actually pick up they always sound like they are at Target or getting a massage in the middle of the day, and not actually working.  You're lucky if they'll make the time to give you the lockbox combo, if it's not too much work for them.  Anyway, obviously there are some real hustlers out there, and they are not all like that, but I'm not surprised why sellers are not wanting to sell the traditional way.

Some context would really help, i.e. are we talking about commercial zoned land or residential zoned land, and if we are talking about residential land, are we talking about low density/agricultural or land where you could put an SFR tract or row townhomes or even a dense apartment/condo project?

I don't know what the land market is like in Colorado, but in California, there is land that you need to put on the market because the buyer profile is someone who comes out of the woodwork and who you'd never find without putting it out there, so I use platforms like MLS, Crexi, AIR, Loopnet and Costar. A sign at the site helps, too, of course. This is for land that is smaller, i.e. half acre up to an acre or two. Once we start talking about bigger pieces of land that that woulud appear to developers (i.e. homebuilders or developers who do self storage, medical office, industrial, retail/commercial) then I usually can market to them without necessarily having to put on the market, because I know who the players are in SoCal, and that helps especially when seller doesn't want to do an exclusive listing, but will let you bring offers off market.

But in general, for random pieces of land that aren't necessarily for the big developers/builders, you certainly need to put it on the market.  I've been a land broker for fifteen years, and for the smaller pieces I work on, the buyers are extremely random and come out of the woodwork, needle in the haystack types. 

Who is going to get the construction loan and be the guarantor for it? For the amount of work that the developer/builder partner will put into it, 20% might be low (especially if they are going to be the guarantor for the loan), but if they are willing to take that, then good for you. No one can tell you the potential value of the lots without knowing the site development costs, city/DWP fees and what the homes could ultimately sell for.  Very roughly, if the homes would sell for $1MM each and assuming the land is flat and without significant site development costs, I would say the lots might be worth 200-300k each with the final map recorded. Again, it all depends on what part of LA we are talking about? Van Nuys? Echo Park? Hollywood? Northridge? To put things in perspective, I have sold about fifty small lot tract maps throughouth LA over the past 15 years. 

In California, something that I see a lot, is people just let the tax collector take the property.  I have so many people who bought a parcel at tax sale, so thrilled with the deal they got and then when they bring it to me, I usually find development constraints that make it clear why the last person abandoned it.  I think they let the tax collector take it since it doesn't really hurt their credit like how an IRS bill or state tax bill would.  I know people are throwing out things like storage, etc, but it it's only one acre and there is a 70 ft ROW and rest of it is in a gulley, I don't really see how useable it could be. Actually, since it's in a gulley, I"m assuming that means it floods? Maybe see if your local flood control authority or whoever at the city would want it and maybe pay a nominal amount for it.

Usually it's either cash or a loan, or use an investor.

A joint venture could end up being great for you, as far as entitlement, development and building are extremely difficult to do and risky. So it may be better to let someone else do the heavy lifting and take most of the risk (i.e. they be the sole guarantor on a construction loan, etc). You should have a transactional real estate attorney represent you when negotiating the Joint Venture Agreement and formation of the special purposes entity (i.e. an LLC) that you'll be a member/limited partner in. Of course you should vet the potential GP to make sure they have the wherewithal and bandwidth to execute the project correctly and in the most timely manner as possible.

I can potentially help.

Usually any Offer/LOI has a feasibility period and a closing period. So you would ask for, i.e. 45 day feasibility period (the time in which your deposit is still refundable) and then if by day 45 you feel confident and can start to move towards a close, then you will ask for a certain amount of time to close, but during that second timeframe, the deposit is now NON refundable. It's just like buying a house, as far as someone may ask for 2 or 3 weeks to do their inspections and get their loan approved, and then once that time period is over, then their deposit goes hard (nonrefundable) and they move towards a close. The feasibility period is also known as an investigation period or due diligence period.

My two cents would be to wait to put it on the market until a lot closer to it actually being ready, if not once it's ready for move-in.  Listings that have been sitting on the market seem stale, not exciting and spook buyers in that they may think there could be an issue as to why it's been sitting on the market.  I know the production homebuilders sell lots way in advance, but I think that's a whole different ballgame.  If anything, have a small sign in front of the house that says who the builder is and phone number (that's common for contractors to do, and also so that neighbors feel they have some to call if there is dust blowing from the site or whatever), and then you may have people calling you asking about availability (people always want something more that they had to chase and can tell their friends the story of how they got the house).  When you get the calls, say "Oh, wow, well I was probably gonna move my family in once it's built, but I might be open to just selling it, since my wife is already talking about wanting to do another house for [make up a reason]." The people within your subdivision may sell the house for you, as they may have family/friends who want to live close to them, and people are always intrigued by new construction in their neighborhood.  So same thing, if they approach you, make it seem like there is a little bit of a chase, but in the same convo say "Well maybe, yea" so that they feel like it's a conquest to get the house.  Either way, you will learn a TON from this experience, and I wish you the best!