@retipsterseth What would be your recommendations for people who dont have time to actively invest in land, and instead want to fund other experienced investor’s deals. How should such a person go about finding experienced/credible land investors looking to fund deals, vetting investors/their deals etc ? Would you be open to recommending/connecting land investors looking for accredited investors ?
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You could start marketing yourself as a land funder and get experienced operators to come to you.
@chrisduff has probably done the best job at this of anyone I’ve seen, and I’m sure he can tell you what a big job it can be to make people aware of your existence and your availability to fund deals.
Just having the money is one thing… having the know-how to evaluate deals is another critical component, and then marketing your funding service is another.
Even if you plan to fund deals exclusively, I wouldn’t underestimate the benefit of getting some hands-on experience doing a few land deals yourself. There are a lot of lessons that come from doing some of this ‘grunt work’ yourself, such as understanding how motivated sellers think, comping properties, and understanding the nuances of each market.
You could also keep an eye on various Facebook groups and forums and send some DMs directly to some of the active operators you find there. This takes a bit of work, but it’s one of the better ways to take matters into your own hands and be more proactive at finding and connecting with the right people.
^ Thanks as always, Seth!
Echoing the above. Seth’s interview with me on the ReTipster pod goes over in detail how we got started marketing. Bottomline, much more individual outreach to start, then more efficient campaigns over time.
We produce a lot of free content as well (daily podcast Get Serious, twice weekly land deal reviews on Land Daily Diligence FB group, and have a soon to be launched software, Land Pricer.
If you’re an equity funder like us, it’s basically active investing, since usually 100% of the capital risk is on you. If you’re passive, you’ll probably get burned sooner or later and be out of business quickly.
Funding land deals can be a huge lever to bump your revenue numbers up significantly, but it’s VERY easy to blow yourself up or get into a capital crunch that is ruinous to your reputation.
If you debt fund instead, focusing on operator quality, can be more passive, but if you don’t understand the underlying assets and industry, it’s difficult to know whether you’re betting on the right operator or deal(s).
To get your feet wet, it may make sense to serve as an LP for established operators with funds like JT Olmstead or Pete Reese. The return profile will be lower, but risk won’t be as high as you learn the industry.
We spent ~4 years as land operators, learning from a ton of mistakes, before we converted over to a funding shop instead.
Best of luck to you!
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This is great advice @retipsterseth and @chrisduff. I really appreciate it. I will look into going in as LP for my first few deals to get my feet wet/learn the industry (as that seems like the least risky way to get into passive land investing)
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