Quick question for those working on higher-level land assignments, wholesaling, or commercial site assemblage. We've been pushing hard on commercial vacant land and light industrial (IOS) plays in the DFW market, and while the deal flow and margins are great, the capital side has presented a unique puzzle.
Our projected exit margins are sitting nicely in that 50% to 80% ROI window depending on the strategy (quick flip vs. taking it to shovel-ready), but managing short-term capital windows for larger land assemblages requires a different kind of equity alignment than standard residential paper.
For those scaling into larger commercial land parcels or structuring partner capital for bigger assignments, how are you keeping your capital stack fluid? We're actively looking to connect with aligned partners who get this asset class—let's swap notes in the comments or feel free to shoot me a DM!
Coral Springs, FL · Member since 2018 · 468 posts · 101 votes
1mo
John Eric, the margins you're describing on DFW land are exactly why the sourcing method matters more than the capital stack.
Here's what I've found: when you're acquiring commercial vacant land or IOS parcels through county tax collector delinquent lists — before they ever hit LoopNet or hit a broker's radar — your basis is so far below market that the equity conversation changes completely. You're not asking partners to chase 50% ROI on a market-rate acquisition. You're showing them deals where you bought at 10-20 cents on the dollar and the "conservative" exit is still 3x.
The capital stack puzzle you're describing gets a lot simpler when your deal flow is exclusive. I pull my land leads from county public records: tax delinquent lists cross-referenced with code enforcement violations and probate filings from the clerk of court. Out-of-state heirs who inherited land they've never seen, owners who haven't paid property taxes in 3+ years, parcels with code violations stacking up — these are the motivated sellers who make your 50-80% ROI projections look conservative.
The key for DFW specifically: Denton County tax collector publishes delinquent lists, and cross-referencing with the county appraiser for vacant land zoning + code enforcement for blight violations gives you a filtered list of the most motivated land sellers in the market. Nobody else is doing this cross-reference because it takes actual legwork — but that's exactly why the deals are still available.
If your equity partners want deal flow that doesn't compete with every other land investor in DFW, the answer isn't a better capital structure — it's a better sourcing pipeline. Happy to swap notes on where the county data lives.