So this is an interesting question, and there have been some great answers here.
From my standpoint, coming from the pure development world, I have gone through an evolution of finding and managing land deals:
Phase 1 - early years, every site that was available, was a deal that could "work" if we tried hard enough to work the deal, this includes sellers who were a "no", and it included sites that were vacant in the middle of a built out neighborhood. Side note: My saying about these types of sites: "There's always some story about a vacant site in a built out neighborhood, difficult seller, family group of (not) sellers/owners, environmental issues (toxics, tanks), etc." Always turns out that there is a story, otherwise if the site was easy, it would be built on already.
Phase 2 - a little tighter on time spent per deal, still very much in the "I can make it work" mode, but a little quicker to jettison a deal if it didn't work.
Phase 3 - present day, generally, I am merciless in declining deals that have the wrong kind of hair on them, have difficult sellers, terrible site issues, impossible zoning, etc.
I always tell sellers that I speak with this:
"I have sold numerous land deals that we have acquired and entitled, and it's super hard to be a seller, you are in essence "stuck" with the land, but you do have to compromise at some level, or you'll never sell it"
Maybe they want to be "stuck", like they love that land, etc. But to transact, everyone has to compromise at some level. Sometimes folks will decide to sell, maybe they decide, maybe their kids decide once they pass on. As a buyer I have an easier (!!) time, I can walk from any deal anytime and not bear any further costs, I can just move on quick.
This is why sellers are always behind the curve in a down market, i.e. prices are dropping, sellers slow to notice and drop prices, they always hold out overpriced. When it's an up market, sellers are always quick to raise prices ahead of the market. It's the damnedest thing, maybe sellers are always just "keep my price high, I don't care" Usually, other real estate people are the best sellers, they aren't in love with their land, they are merchants, who need to trade land to make money or produce a deal.
I don't spend anytime tracking sites with difficult sellers, but do a have a small list of sites that we track for various reasons, but it's more like the yearly call or email to check in. Do the same with the brokers if they are managing the site sale and not the owners directly. Sure, do we miss the occasional killer off market deal, answer is "yes" We see it as a game of averages, and we'll focus more on what we can acquire now and build reasonably soon.
So then the question becomes, what do you want to do, build deals, or track lots of sites for a long time.
Our answer is this: we have identified over 500 land parcels that fit our UTH product type in the LA Basin, with a tight focus on the Long Beach, south LA county, and northern Orange County markets. We look for deals that are in middle and lower middle income neighborhoods (fits our UTH product criteria, less competition from market rate developers), and are on the market now. With the volume of projects we produce, we aren't in the business of massaging sites over the long term.
We need to build within the next 12-24 months, or sooner, merchant build style apartments deals.
So we do all the normal stuff, LoopNet, Zillow (weirdly productive in this space), brokers in our network, sites that we drive by (building one now, drove by it a hundred times, till was right time to make the call), etc. I do have folks on my staff that will search title to track down an owner, but our hit ratios on actual sales is pretty low in that scenario. We have much better luck tracking non-mainstream sites that are on the market, but ignored by the larger or mainstream developers. Maybe it's the neighborhood or city it's in, maybe the site is configured a little weird, odd shape etc, or maybe it's next to industrial. We like those kinds of stories, where other developers don't have the vision and pass. We just closed last Friday on a site in Fullerton that fit this exact situation, older neighborhood, blue collar/working class, west Fullerton (older, not so nice) and we got a great price on it given our underwriting. Listed by Marcus and Millichap, etc, yet still bought at a good price because not your mainstream site.
Lot to digest, hope that helps.
~ Scott
