All Forum Posts by: Roland Brown

 Shoot me a DM and times that we can chat. I’m glad to share individually

I buy land and focus on selling land as a Realtor. Most lending is depending on the business plan. What are you looking to do with the land?  If its for Entitlement

Much easier you can get lending if the land is ready to build, but if its not here is the strategy. Structure to purchase a land with sufficient time to get all approvals in place prior to closing. (You may need to offer more in the purchase price but it removes a lot of risk from the deal)

Lenders I have worked with usually lend as loan to cost basis and I am seeing anywhere from 50% - 65% lending.  You can also sometimes include soft costs (Engineering, Design, Legal, etc). 

Hey looks like this post is a month old, but its super interesting.

Doing a JV with the owner is a brilliant idea especially because it will reduce your acquisition expense.

What did you decide to do?

Land Values are very local, and the terms you offer could help you get an enormous equity bump at closing. The best way to acquire land is on a long contract which allows you the time to get all the city approvals and create a shovel ready project prior to purchasing. 

Rough value estimate for your land acquisition is to purchase for ~5% of the finished buildings value. The value after city approval of a shovel ready project should be 10% of the finished building's value.  After installation of everything 6" or lower the value is 20% of the finished building.

Using that rule of thumb you can offer with confidence that you will be adding value as you move through development phases.

@Greg R. As a resident Realtor anytime an investor wants to look here in DFW I review this question:

Are you investing to get more income this year, or are you looking to build wealth?

The strategies aren’t mutually exclusive but it does make a difference where you buy. If an investor needs income wealth creation is the by product, but investing in the Midwest or other similar areas is needed, wealth creation happens through equity pay down, depreciation, and 1031exchange.

For a high income earner who want wealth creation through appreciation, depreciation and equity pay down by tenants, then cashflow is the eventual outcome.

Strong economic markets like DFW, Austin, and other similar markets make a lot of sense for this second group.

@Alicia Marks Thanks for the shout out. There are several ways to invest in land and win, buying an hope for appreciation without knowing more makes me nervous, that is just a black statement. 

That being said, there are still some locations that are far better than others to be invested in.  One path you could pursue is to replat, Keep the 2 properties sell off the raw land.

If you would like to talk through the deal I would be glad to chat with you about it, I advise on this stuff all the time as a land REALTOR.

I’m working primarily on land development right now, when there is no inventory may as well go make some more lol. We are developing single family home projects. 

Arlington like all DFW has had a big jump in price, with out proportional rental price increase to make it a good cashflow market in my opinion. Im of the option (and it’s purely opinion)  that the only play right now in most of my market is appreciation. So buy value, not cashflow.

There still are great deal to be had for deal hunters, but that means owning your own deal flow, mailers, dials, door knocking. 

Retail investing for now is very difficult, DFW I believe is a great value market, buying with the knowledge that it’s a looong game will serve you well. For cashflow I’d recommend searching other markets. 

I wish it were not like this, but we don’t make the market, we service the market. I’m trying to be extremely forthcoming because all markets have cycles. I fundamentally believe in DFW in a 5 and 10 year horizon.  Right now is not the time to swing for fences, I don’t want anyone getting hurt if there is a 2 year lull in value growth, or long vacancy gap.

Its scary getting started, or changing levels.

2 things that stand out to me when in analysis paralysis is, get feedback from a trusted source, and make offers.   

This past year the properties values jumped a lot, so new buyers had to be carful to buy within the rules. We he have helped several investors start their investment journey, some blow right past the fear of offering, and some get stuck for a long time. 

If you are feeling stuck, find a mentor (there are many on BP, time willing, I am happy to chat through projects no mater where you are buying). An experienced mentor can help build you up to your offer stage.  

Note: When you go to talk with a mentor, go in with specific questions, or with a completed analysis on what you are looking to buy; and be ready to answer due diligence questions. 

When them mentor says jump, trust and jump. Go offer -

The great thing about offering (as long as you set it up right) is you can back out during contingency.  Currently ('22), first investor offers rarely get accepted but you learn the offer process and get some momentum. When you offer, you commit, and commitment moves the needle. 

For me taking a new strategy of land development this past year was a mental hurdle, we went from SFH into land development. I experienced the feeling of unknown, and analysis paralysis all over again. What made the difference for me was saying yes to submitting an offer, and talking it over with a mentor. Once the offer was accepted the work began, but I didn't have the fear of the unknow anymore, I had the fire of taking action.