Transcription
All right, everybody. Welcome into our Wednesday webinar. Happy to have everybody here. Dan will be with us in a minute. We're talking about market selection for subdivides. This is something everybody should really know how to do. Whether you're doing subdivides now or want to do subdivides in the future. Uh, knowing how to choose these markets, knowing what questions to ask when you're talking to accounts, everything like that. Such an important topic.
Hey guys, happy to be here. Welcome back to our Wednesday webinar. Last week we kind of did the 1.0. I think this week we're going to dive a little bit deeper into this topic. Everyone seems to love market selection and what you can do with it. So excited to get in it. We're going to talk about subdivides today. And we're going to look at a lot of different things here, like, um, uh, what price you need to be looking at for subdivides. We're going to look at lower lower price or lower acreages and see what those prices are and compare them to the higher acreages to make sure the spread's there. We're going to really dive into the weeds here. Excited to be here though, guys.
Yeah, for sure. Did you get a? I'm gonna check if those texts went out. Dan, did you guys get texts in here?
I did not.
Let's see. Money Beard, welcome. Welcome. Um, in the chat, just let us know where you guys are joining us from. Uh, what state, what city? Love to see where everybody is from. Uh, as always, I'm going to check on these things. I'll be here. Get started here in a couple minutes, guys.
Sounds good. And if you guys have questions about what you guys want to specific questions on this topic, anything else, throw them in there. Here to help you guys. We got 30 minutes together. So.
There we go. Looks like text might have just went out.
Sweet.
There we go. People popping in now. Appreciate everybody joining us today. Let us know where you are joining us from. Uh, we are talking about market selection. Not just market selection, guys. Market selection when it comes to actually finding subdivide deals. Market selection with subdividing, Dan. I think it's one of the most important things to be 100% honest because if you do it in the wrong county, the wrong area, it can be really, really, uh, it just, it's might be impossible to even make a deal happen.
Yeah. And yeah, I agree. Especially with when you talk about like restrictions and things like that. Ron, uh, you got restrictions, you got, is the price even going to make sense? There's a lot of variables with what you can do. A lot of counties are very strict with subdivides. Uh, so yeah, definitely agree with you there.
Great group in here today, guys. Let us know where you are joining us from. Um, all right, looks like they are. Hold on. Just making sure. All right. Yeah, we should be good. Awesome. People are trickling in here. Maybe it was a little delayed. The notifications. Uh, every week, if you guys want to put on your calendar, every week we are in here at 5:30. Sometimes we start a little early, 5:15. Um, but every week we are in, uh, live on YouTube Wednesday at 5:30 or 5:15 Eastern time. Uh, put where you guys are calling us in from. We're gonna get started here in a minute. Uh, yeah. I'm, I'm really excited for this, guys. Market selection for subdivides. You guys see, and maybe you see them, maybe you don't. You guys hear on our podcast, people who are making 150, $200,000 on deals. Are those subdivides every single time? No. A good handful of them are, Dan. Like the big deals you guys are seeing sometimes it's just cutting 50 acres into five 10 acre parcels and it's as easy as that and you make a couple hundred grand on something like that. Um, but it starts, if you're trying to target that thing, those things, it starts with selecting a market.
Yeah, we, um, recorded a podcast today and we're talking about subdivisions in it. It wasn't the topic, but we, they came up. And it's even like, if you guys aren't targeting subdivisions, which we're going to talk about targeting them in this, this, uh, next 30 minutes and going over how to select a market for them, but even if you're not targeting them and you just have an eye for them, when they do pop up, it's like at the end of the year, if you do a deal a month and one of those is a subdivide, it is going to make a massive, massive difference in your profits and your income statement that year. Just one deal out of all the, like, it's just crazy. Just when the opportunity comes up, being able to see.
Yeah. I mean, you do the math. Like you have one deal a month and you make $20,000 per deal, which is pretty passive in terms of that. Uh, that's $240,000 in the year. You do 12 deals and one of those is a subdivide that you make 150 grand on. That's, uh, 220 grand from the 11 deals and then another 150,000 from, and that 240 turns into 370. It is a, then you can imagine if you're targeting these, like, if you're actually going for these and not just like letting them fall into your lap. That's when you do eight deals a year, they're all subdivides and they're all six figures plus.
Yeah. And, uh, we can, we can talk, uh, answer this question here, Ron, before we get started. When you get into subdivisions, it's considered commercial real estate, right? No, we're talking, uh, more minor subdivisions. This is still residential real estate. So, when you're talking minor subdivisions, we're not talking about getting any, uh, engineers out there or getting, you know, we're not talking about 0.12 acre lots. We're talking about multiple acres still and we're taking it and just chopping it up into maybe we're taking one parcel that's 50 acres and chopping it up into five 10 acre properties or 10 five acre properties, uh, or maybe some fives, maybe some tens and mixing it and getting seven or eight properties out of it. So, we're talking about minor subdivisions. These aren't major subdivisions that have engineers and all this different work that needs to be done. It's very simple. Minor subdivisions are very, very simple and that's why we love them.
Yep. 100%. Um, Dan, do you mind throwing this, uh, link into into Discord before I get started here?
Yeah, let's do it.
Yeah, let's send that into Discord. I'm going to share my screen, guys. We're going to use ChatGBT to start. Um, so, what I'm going to do, I'm just going to be asking. You want to double check on these things. Um, but what we're going to do, we haven't really done ChatGBT a lot on this and you can use it so much more in your business. I can use it more in my business. I do use it a ton. Um, but we're going to actually use this to help out with us, um, or to help out with this. And then there's going to be a second layer. So, the first thing when we're talking about, I'm going to share my screen. The first thing when we are talking about subdividing is like, okay, we need to choose areas that are minor subdivide friendly where they let me subdivide land. I don't have to go and talk in front of a board, a county board or something like that. Like they want people subdividing. Um, let me answer Justin's question first because the whole point to develop or just buy low, sell high. So, what we're talking about today, Justin, is buying 50 acres, splitting it into 5, 10 acre parcels. Um, it can be a lot of different situations. Um, we're not developing in this. It's, you can make, there, there's a lot of people that come to, uh, this industry from like ground up development because they're making just as much money on the land as they were developing. Uh, so yeah, we do everything up to like what you would consider developing.
Yeah.
Um, let me hide this. All right. So let's just ask it. So let's just start prompting ChatGBT. I am looking. What state do you want to do, Dan?
Uh, Tennessee.
Do minor subdivides. I've never like created a prompt and as far as like a sharable one. That's something we could do for this, right?
Easily.
What'd you say?
Yeah, easily. You can be more specific, Ron. You could say Western Tennessee. Maybe.
Do minor subdivides in Western Tennessee. I am looking for counties with little restrictions when subdividing. So, can you.
Wait, I would I would go a little more strict. Maybe.
I would just question.
Define your restrictions a little so it knows what to look for.
All right. What else should I say, Dan?
All right. Say, say I don't want, I don't want to go through an approval process.
What I am looking for.
No approval process.
Can also look in Central Tennessee if needed. All right. Uh, are we blocked? Let's, let me fix this, uh, so you guys can see a little better. Hold on. I'm gonna zoom in one more. Two more. One. Is that okay? Can you see? Okay, Dan?
Yeah, it's good.
All right, cool. Um, what am I look, what I am looking for? What, what you say? Little approval process or no?
No. Uh, little to no approval process.
Hey Andrew, I was just talking about you on the podcast today.
Um, type in, uh, uh, what else? Uh.
Um.
How many you can split it up into?
I want you can just tell that I want to be able to split it up into the most lots possible.
To be able to split into at least five parcels.
So basically what I'm saying there, guys, this is important actually. I want to be able to split into at least five parcels. Some people are going to be like, you can split it once and then after that it turns into a major subdivide. A major subdivide is going to be a lot. Yeah. Maybe we do that. What Nick said. What are? We could ask it questions.
Yeah.
Give me information. Let's see what it says. Actually, let's just keep going. Um.
Anything else, Dan?
Um.
Little to no approval process.
Just a plat.
Minimum acreage, Ron.
Give me the. You can just say, "Give me the minimum acreage amount." Be the minimum acreage I can split into.
Uh, and I'm going to say, let's make this a chart. See what happens. We're going to play with it. I've never done this as far as like with this in particular. I've played around with talking about subdividing, but I've never done this. This wasn't a planned thing coming into this. Um, here we go. They're an ass.
Staff approval for lots under five acres. So, the ones that are. Can you zoom in? Copy this and let's just. Hold on one second, Dan. I'm gonna open a Google sheet.
You said zoom in one more.
Yeah.
Or one less.
One more.
Yeah, that's better.
I think we copy this, Dan, and we can read it on this Google sheet real fast. All right, then let's go. Uh, let's highlight them all. Let's double click here. That didn't do well. Hold on.
You could, you could also edit it, Ron, and say, "Please link the PDF, the county PDFs or websites going over the restrictions." Say, "Give me the same chart. Add a column."
Same chart. Add a column with a PDF or URL with the restrictions.
From the county.
Also add contact information in another column. Cuz the first step, guys, like I don't, what I'm going to do, I don't use ChatGBT for this and then like, okay, let's start targeting these counties. You got to make phone calls with this stuff because a lot of these, um, some, a lot of these counties are just very, very poor with data. Um, let's go back. All right. Got some information here. Uh, let me see. Five lot capability, staff approved. So a lot of these guys with like staff approved, these kind of things. A lot of these. Um.
Well, that's just staff approved under five acre lots.
Oh, very nice. These are all really good, Dan. This is cool. Two lot splits. Two lot splits is not much. So, let's look at this one. Preliminary plus final. So, this, this isn't like one that will highlight red. This isn't turning into a major. You would have to call and talk. So, all of these are like, okay, I have these notes here. I have, um, I don't know if this PDF worked. Maybe it's in here and worked. Um, yeah, this PDF didn't link here. Well, um, but either way, so we have information on all these. Now, you make the phone call and you kind of use this as a guidance. You might want to have their site up, but this gives us a list of seven counties to call just in this small region. Uh, you can do this in every state, in every region. You could do this for an entire state at once and get a much longer list. Um, but that's essential. We need to find out, uh, for minor approval. You want the approval to be as little as possible or just like, as long as I follow these, it's going to get approved 100% of the time. Uh, you want to see how much road frontage you need, if any. Uh, and you could, we could probably redirect ChatGBT to add that as well. Like, how much road frontage do I need for each lot? A lot of stuff you can add. But the key is you want to know what you're getting into. We want minimum restriction on these. So there's a combination when you're choosing a county. We're going to get to the next part. Now, first thing is like minimal restrictions for subdividing. Second thing is, uh, let's actually see if the prices make sense, essentially. So, we're going to actually get on Land Portal now, Dan, and I want to actually look at some of these areas. We might not even stay in that area. So, when you're thinking about subdividing, guys, just let's type in simple math. Uh, so let's say you're buying 50 acres and let's say market value. Okay, let's do, uh, acreage market value. So, let's say you're buying 50 acres. 50 acres and market value is, uh, $10,000 an acre for 50 acres. That's going to be total, total is going to be 500. Okay? $500,000, um, if you sell this together. Um, and then you have, let's say you have, uh, let's do 10 acres, Dan. And this is 8,000. I'm sorry, wrong way. 12,000. So, theoretically, if you have 50 acres of those, you can make a little bit more money. Not a ton. This would get you $600,000. If you subdivided these out, let's say you have five acres and this is only 13,000. It's going to get you a little bit more money, but what we're looking for is a wider range in the price per acre, um, market value.
So, let's drop down to ideal scenario below.
Yep. This isn't a bad situation. So, let's say you started with 50 acres and, okay, 50 acres is $500,000. Like, you could buy for market value $500,000, cut it 10 times and get 650 out of it. That sounds good. But what we really want, and you can find these areas, and we're going to find some areas like this. Um, actually, we don't even need to do this again. Let's just do ideal. Then we'll go down. We're going to do 50 acres again. Let's say 50 acres this time is like $6,000. Uh, $6,000 per acre. And then that gives us a total of 300k. And then 10 acres, again, these are realistic situations. 10 acres is like 9,000. You subdivide that and let's say like 10, actually, because that's not crazy, I don't think, Dan. 10. And then this is going to give you 500k. So, already we subdivided into five 10 acre parcels. This might be getting complicated, um, and confusing. Let me know if, uh, you guys don't, uh, want me to slow down or walk through this a little more. But the key is we want, and then you might get $12,000 per acre for five acres. And then this is literally doubling your money if you buy at market value. And anyone in here who's got experience, like these counties do exist. 50 acres is going for $6,000 an acre. 5 acres is going for $12,000 an acre. You cut this 50 acres 10 times and you're turning $300,000 essentially into 600 grand.
Exactly. And that's what we're looking for. Big spreads like that. So the one on top is not ideal because there's not a big spread from 50 acres to 5 acres. You get a little bit, it goes up 30%. But below it goes up literally 100%. It doubles. Andrew said, "Beware that GBT might not recognize how counties municipalities classify the parent track within the minor subdivide." 100%. So, not just that, like anything ChatGBT gives you in terms of this stuff, because they're just taking it from the county sites, you need to be wary with really all the information that they give you and you need to clarify. We're just getting a list of based on what ChatGBT said, we're getting a list. We are confirming every single thing when we're making that phone call. Do not mail counties without talking to people. Hey Yolanda.
Well, also once you have the PDF, if it actually linked in there, you could read through the county documents too and get the fine print also. And then you also want to talk to them as well.
All right, so let's get on Land Portal real fast. Let me log in. If you guys are not a current Land Portal user, there is a free trial in the description. I think my mouse just died.
Oh, that's not good. [Music] Never happens that you need it. Give me a second, guys. There we go. All right, I found a different one. This one I'm gonna be. Hold on. All right, Dan, walk them through what the market research does real fast before I. I'm gonna. Hold on one second. I'm gonna. So, what are we looking for, Dan? I'm, I'm gonna get this up in a second. Oh my gosh. Hold on one second. Let me stop my share screen.
Yeah. So, now we have five, uh, one, two, three, six counties or so from ChatGBT. I always do more work than what we just did. Look into it deeper. But now we're going to do some basic due diligence on these on these, uh, counties. So, if you guys don't know what the Land Portal is, it started out as a data company. That's that's a, what's, you know, foremost, what we focus on as, you know, property records, comps, things like that. So, that's what we were founded on multiple years ago. Recently introduced market research where you can get a lot of this data, and prices and comps and things like that on the platform itself. So, what we're going to look at, Ron, you and you still want to go with your standard market selection, um, routine. So, you still want to look at things like your days on market and your absorption rate and population density. Do all of those? None of that changes with this. Correct, Ron?
Correct.
So, you want to still do the same, um, what we did last week and go through those routines and look at everything and see what works for you. But while doing that, you want to add some things, right? So, the main thing we want to look at here is like, Ron just showed, we want to look at what the difference is from what five acres is worth because that's a good subdivide side to, uh, 50 acres. So, you want to look at the spread of what you can make on a deal when you subdivide it down. You want there to be a really, really big spread from what 50 acres is price per acre to five acres price per acre because that's like the average, let's say, uh, deal that we can subdivide up. You want to make sure the bigger the spread, the better. As long as it's still a good, uh, moving county, it's fast, you can sell them, all of those things are good.
Yep. 100%. So, let's get rolling here, guys. Um, we can probably just go. Let's go to Tennessee, Dan. Let's just go where we said. Um, let me pull up the sheet real fast. Had this up before. All right, I'll zoom in a couple times here. Sorry about that, guys. Mouse dies at the worst possible times. Um, all right. Let's go here. Let's go search. Uh, where are we going here, Dan? Gibson, Benton County. Trying to think. Let's just go down the list, honestly, and see what we're looking for. So, let's go, let's go Williamson County. Unless we want to go to the heat map first, Dan? Do you think there's a purpose? I don't know if there is, honestly. Um, no, because I think just go back to last week's messages, Ron, and, um, or last week's, uh, YouTube live and go through that and see what you come up with and then we'd go based on there. Um, all right. Uh, so Williamson County, let's search market data. Let's go here. Um, and let's go to, we're going to go to median prices. So, here guys, we went to. So, we have a heat map on there. We also have, um, this area we can actually look at the, uh, recent prices, everything like that. Let's go for land data only. And let's go last 12 months. So, we're in Williamson County. Where is this? This seems pretty urban, honestly, based on the prices here. Dan, I'm going to look at where this is exactly. Williamson County, Tennessee. So, this is just outside of Nashville, Dan. This is crazy that this. I would be very interested and see if this county actually has these lighter restrictions. I'm guessing this pricing isn't going to work on here, but we'll take a look here. Um, so, what we're going to look at here, Dan, should we go 50 to 100? You think?
Yeah. Yeah. Yeah. I think that's fast.
These are so expensive. So, you guys can see the prices for these 50 acre parcels. And what I'm gonna do, I'm gonna click in here.
Where is this? Where is.
This? Is the last. This is right outside of Nashville. Yeah.
Um, so, you can see the price per acre. And what I'm going to do on here, so we see all the recent data on here. And if you see outliers on here, guys, we can get rid of them. So, like 71 acres, this seems crazy, but, uh, 71 acres, 28,000. I'm going to, I'm going to actually hide this. This actually seems like a high example. Yeah, this is definitely expensive county. Uh, Lisa, probably not going to be the best place, but we can see the median here. And this is the median price per acre is 63,000. Remember, we want a big, uh, we want a big margin of these 50 acre price per acres to five 10 acre, uh, 10 acre price per acres. So, that one was 70,000. Is that correct, Dan?
Yes.
All right. So, let's go to like 5 to 10 as well. We're going to go last 12 months. 5 to 10. Again, we had 60,000 for the for the, uh, 50 acre properties about. We want to see if it's a lot higher for these. I don't know if it's going to be true or not, but let's take a look here, Dan, because it's actually rather interesting. So, let's hide this one. So, again, I'm looking for outliers on here. I'm going to give this a zoom or two so you guys can see a little better. Uh, 29,000. There's a lot of comps here, guys. We can actually go more recent since we have so many comps. So, I was 12 months for the bigger acreages because there's less comps. I'm going to actually go the last 6 months for 5 to 10. And as we're going through this, if you guys have any questions, you want us to slow down, anything like that, let us know in the comments. Um, appreciate everybody being here today. Uh, let me hide a few of these. So, I'm just looking for outliers. These 52, 29, everything like this. These are kind of low. Um, another 50. These are kind of on the high end. 268 per acre. I still think this, this county is not a crazy county to do it in, Dan. Like honestly, we're at an average price of like 117 per acre. And you can make another column in here even, guys. Uh, so let me. How do I? How do I cut this off? Dan?
Just delete column.
No, I wasn't meaning it like that. There's a way to get it to wrap differently, huh? We have about five minutes left. All right. Uh, let's just delete them so I can see. All right. Oops. All right. Well, that didn't work. Um, all right. Let's just go five acre. Five acres. We're gonna type over this. Does that work? I'm just going to delete that. No, I can't delete that. All right. So, five acres and 50 acres. And again, these are estimates. We want to look a little more into it as we're going through, but again, we need a big variance in price from 5 to 50 acres. So, five acres was, we had like 117, 117,000 and this is per acre and then 50 acres was like 67, I believe, if I'm correct, Dan. 67. This is a pretty good spread though when you look at the difference of these two. Easement required. I would be surprised if they don't have more strict things on here to be honest with you though, Dan.
Yeah.
Just being a county that close. So, let's move on. This is called Metro Nashville. We're not going to do that. Knox County, Shelby County. I'm going to, uh, scroll down to, uh, let's see. Wilson County splits greater than 5 acres. Okay, so we go, let's go Wilson County. This one's going to be a little more rural, I think, which I think is going to fit a little better for what we're doing. But again, we want to look at the prices. The biggest thing when you're subdividing, guys, is the price difference between, uh, 5 acres versus 50, 10 acres versus 50. Like, think about what you're subdividing it to. Um, all right. Um, let's do. What if you want to use the land for yourself? I mean, you can always do that. Like, if you, what a lot of people do is when they subdivide, they might keep one parcel for themselves. So, if you have 50 acres, you subdivide. You can always keep a parcel for yourself. Um, 50 acres to 100. Let's go last 12 months for this. We're in Wilson County, Tennessee now. We only have two comps here and they are quite a bit different in terms of that.
That's a problem when you're this high of acreages. Sometimes there's just not.
Let's go 20 to 50, Dan. Maybe we have something a little better here. I, I think we might go on this, but this is going to be a little different, but let's see if we have. So, we have a 41. We have a 39. So, if we literally just hid these ones. Hide. Hide. Hide. Hide. Hide. Let's keep these 40s, guys. Okay, this actually gives us something, man. This gives us $15,000 per acre. Our average acre size on these are 41. So, it's really not bad. And even this, this is probably on the high end or on the low end. So, let's actually take that off.
We also have this 11, which is kind of low.
I'm going to say like 20,000 an acre for 50 acres. I don't think that's a bad spot, but let's see. Again, the big thing is like, what is these five 10 acre spots going to be? Let's go back. This is really helpful, Dan. I haven't done this live, honestly, to be honest with this, uh, on the new market research tool on here. If you guys haven't, there's a free trial on the Land Portal on landportal.com. Um, let's go five to 10. Let's see. Average size here, 5.68. Again, I'm looking on here if there's any crazy. This is a good county for this, Dan. All right. 268 an acre. I'm going to get rid of that. Even it's 97 an acre. This is quite a bit high. This is a really good area, guys. This 17's low. I mean, we're at 37, Dan. We're at 38. So, again, we're looking for like, okay, can we double our money if we just subdivide? And this is saying if we're buying it for market value, too. Dan, we have time for one more. We're at 5:58. Um, I'm going to close this here. But this is what essentially what you guys do when you're choosing markets. You have the restrictions. Like your first step when you're choosing markets for subdivides, guys, is restrictions. Looking at restrictions, everything like that. Um, the next thing is like, okay, do the prices make sense? Let me figure out how to get this screen. All right, let's get this up. Let's hide this. There we go. Any last questions, guys, as we get through here. Appreciate everybody being in here today. Um, last week we did market research. If you guys are just getting started, like your focus shouldn't be subdivides. If you're first getting started, just try to figure out some rural markets to target first, flip some land, do your first deal. Um, we have some really good podcasts coming out, some amazing guests that are on there as well, um, who can definitely be insightful on this kind of stuff. Dan, anything to add on this?
No, just the basics, guys. Going back to what we talked about at first, you want to find a big difference. This is the key. What Ron was just looking at, if you guys joined late, was just a big spread between what five acres is worth price per acre to 50 acres because when you, when you subdivide it down and you're taking your 50 acres, you're splitting it up, you want to get extra price per acre out of it, right? You're putting in improvement, you want to get the value add on the end. So, that's really all this process is doing.
Yeah. No, I like this. I think if you guys can take this, like it was, I think we, I, you, so my next step obviously I would finish going through that list, everything like that, but my next step would be, um, making some phone calls to the counties tomorrow after I finish out the pricing for five and 50 acres, making and then confirming the restrictions, everything like that. Um, really not that difficult in terms of doing this and I mean, we just did this in 30 minutes. Obviously, you want to confirm some things. Probably take a few hours to find some good counties, pull data, everything like that. Um, like I said, if you guys want to get the software, be able to do market research just like this, you can do it really fast. Landportal.com free, uh, 7-day trial. Uh, landportal.com subscriptions. Plural, I believe, Dan. Um, but, uh, yeah, you guys want to hop in there, let us know.
Give it a shot. There's, there's AI comp reports we came out with. There's market research. We were founded on data years ago for, uh, AI land data. We are the first in the business to ever have that stuff. So, check it out. There's free trial on there. Um, yeah, I'm really excited to have you guys on there.
Completely dependent and demand driven, 100%. Yeah, that's a good point. So, Mike asked, "What's a ballpark time to sell off five acre parcels?" So, if you're subdividing 25 acres into five five acre parcels, what is, uh, the average time? It is. Sometimes you can have them under contract within a week, all five. I would definitely not. What I look at, Mike, when I'm trying to do this is like, how fast can I get my money back? So, if I bought, uh, 25 acres, let's say for 100 grand, and every 5 acre parcel is going for 50, how long does it take me to sell two of these? Because then I get my money back and we're all good there. That, that's a big, big, uh, thing that I look at opposed to like, when am I going to sell them all? It's great selling them all, getting your money back plus, but like, how fast can I get my money back and especially my investors if we're using investors.
Yeah.
But, um, appreciate everybody being in here. We will see you guys next week. We are 5:30 p.m. Eastern time every single week. Landportal dis, uh, Land Portal link is in the description below. But we'll see you guys next time.