80% of land investors are wrong in exiting the underwriting of underwriting of pricing land investments: 4 errors lost millions

What I’m thinking: Week after week, week after week, can keep your business on for months (or worse).

Recently, I reviewed land transactions from various operators, some operating more than 7 businesses, of which 80% were Up to 100% on their exit pricing estimates.

Not a 10-15% margin error. We are talking about operators underwriting properties underwriting at market value purchase prices, and an outage is expected to be completely unrealistic.

In the context, unless there is a conservative margin of about 2x (these transactions still exist, we won’t be entertaining (or suggesting your own equity purchase) (or suggesting your own equity purchase).

Most properties sent will need to cut the expected purchase price by half (or more) and even need to be valid nearby.

$180 acres reality check: Error on export

Here is a clear example of the daily land diligence course:

• The ~180 acre game north of Dallas is expected to be divided into 60-75 children’s plots, each of which is about 2 acres.
• Requires road installation.
• The recommended export price is about $100,000 per acre and was sent to me according to the supplement.

My analysis:

• Most parcels in the area are less than about 20 acres.
• In the past 3 months, COMP has been sold 1-2 times recently in the 2AC range, with high characteristics.
• Comps for sale in the 10-20 acre range (the more viable path) cost about $20K ppa.
• The active list of Smorgasbord (green pins on Redfin) has similar/superior characteristics, many lasting over 300 days on the market.
• Like many sunshine markets, DFW North is now in a major downtrend trend, especially for residential lots, adding pressure.
• This theme property has some nice features, but on all of the above I can’t prove that sellers are offering over $10k less than about 80% of what they want.

Almost every point above impacts the potential of the intestine. The alarm bell immediately goes out.

I had to ask myself,”How can this level of risk not be registered with other land investors?transparent

Look, I understand. Many of you are running operations that aren’t working, managing a leading generation, a variety of marketing channels, compositions, actions and severance…and we are a category specializing in land transactions, underwriting land transactions every day.

In this regard, we don’t want you to be as good as we do, it’s unrealistic to expect me to be as good as you are with your team at talking to sellers.

The point I encountered is that there still seems to be huge gaps throughout the industry and have appropriate pricing attributes. Even if we and everyone else have raised all the education and there is still a long way to go, this question cannot excite me as we have been working on the solution for a while. see below…

(For those of you, “Chris, we locked in the composition, there’s no problem here”.

This is a topic I often return to, and may be written weekly given the knowledge gap.

Current market conditions Every land investor must know

Bottom-up market conditions are in all respects. We have tendril and broker relationships and active inventory in most parts of the United States. Local, on-site market data is your best friend.

On average, we see more frightening/slowness when the fear of the trade war begins when the start of Q2 2025. It is the same at best.

Be careful, guys! This is our most difficult overall market for more than 5 years.

Now, the standard selling price is useless. Usually, they consider the past 12 months, but we have extremely high volatility – the bull market is in 2024/early 2025 and then starts in the second quarter of 2025.

Featured blind spots of your transaction

Competition for track sales is after April 1, 2025, especially after trial. Any supplement outside this range should be observed with extreme skepticism.

You may not have enough comps to weaken the activity. Unless you have disgusting excellence characteristics (most investors overvalue), you need to undercut all active market pricing At least 5-10% (If you introduce 3 or more children’s packages, more).

Of course, be smart: get general benchmarks for active comp features. For example, you don’t necessarily need to weaken the inland list.

Characteristics of religious assessment. The only Comps for sale may have the advantage of new mobile homes, installed utilities or proximity to town centers, which illustrates why they move in a tough market.

For target attributes at the bottom of the feature, we won’t touch them regardless of the price. The risks and potential brain damage are not worth it now.

System Solution: Why Even Experts Need Process

Even experts, my team is overwhelmed when there are 20-50+ viable additions. To be more efficient, I found myself rushing to make a $500,000 decision.

That’s why we created the land pricing AI. It only considers the most relevant supplements, adjusts the weighting of current market conditions, and eliminates the overwhelmingness of psychological math while taking into account property characteristics.

Remember: Amateurs automation efficiency. Professional automation accuracy.

That 180AC North Dallas deal opened my eyes and I should be one of the best people in the industry. Accurate software is the only viable route.

We are building the most reliable pricing tool on the market because our own business depends on it:

Know the real value before flipping