Hi friends!
I am reaching out for some guidance on deal funding. I have been in the land investing space since last summer and have closed a few deals. I have a subdivide deal in Mississippi just outside Jackson that I am in search of funding for. Something I have noticed and I understand why, but I have no problems locking up funding for traditional land flips. But I have had a tough time with trying to lock up funding for subdivides. Thanks again for any guidance!
@gwilkins234 I think I’ve heard Travis King mention he funds minor subdivides through https://freedomlandcapital.com/
@gwilkins234 What’s up, Greg. I know you from LIO. Did you try Dan and Ron? Anthony called me yesterday on behalf of LIO asking did I need any funding for anything.
@gwilkins234 Know we were in touch already about this, but for the sake of everyone else who might be interested, we fund larger deals at https://www.seriousland.capital/.
~$50K to $500K in equity per deal preferred, nothing below $20K. (Size of deal can exceed $500K with option to finance from the seller).
We fund flips, portfolio takedowns, minor subdivides, entitlement deals, and transactional.
Looking forward to working with many more of you soon!
@chrisduff so when funding a subdivide, how does it work as you sell off the lots? Are yall taking a debt or equity position?
I think the main issue is that as you sell the lots the collateral is ever-changing and that doesn’t really work for traditional financing.
@basinrei Generally we take equity positions when possible. If the seller is carrying debt with our purchase, we’d make sure to have in the contract that we can sell off child parcels free and clear (when cash), as opposed to every parcel having to be sold off before the debt is released. If selling via seller financing, that can add some flexibility with some sellers willing to carry those notes, though typically we attempt to sell notes within 3-6 months of seasoning, given the nature of recycling capital in our funding business.
Even more ideally, we aim to negotiate with sellers where our principal in the deal is senior to the seller debt, so we can breakeven prior to paying off the debt.