Sources of Land Opportunities?
As a land acquisition manager, one of the primary roles is to source and find new land opportunities. It is very typical that you might come across many potential land deals but quite a few of those do not work out for a variety of reasons. The location or product type may not fit your company’s criteria, the timing doesn’t satisfy your business plan objectives, or maybe you just get outbid by a competitor. Thus, you need to look at a lot of land deals to find those that you can successfully close.
In many cases, the land sellers and land brokers will be bringing the opportunities unsolicited. Master planned community developers will reach out to their preferred homebuilders when they have land and lots available for sale. And land brokers will also present opportunities to most all builders and developers in the market. While this may supply some good opportunities for a builder, it usually means that the opportunity is exposed to multiple bidders and the competition can drive up the land price.
Whether it is land developers or builders, most land buyers are hoping to find opportunities where there is no competing bidder. These type of land deals take a bit more effort, but they can also provide higher project profits. One sourcing strategy would be to act more like the land broker and go direct to a land seller. The process could require a bit more time and effort if you were trying look at all land opportunities in this manner – and you are still busy with the due diligence and closing of your other land deals. But often you will come across a property and find it will be worth the effort for that one property to cold call the land owner.
Another good source of land deals is a good network and relationship with consultants and title reps. Civil engineers, planners, and architects may have been working on another land parcel and know that the property is available but not being marketed. And title reps are typically talking to all land developers and builders, and they will likewise know when a parcel may come available.
And do not forget about Realtors, particularly for infill markets. These parcels can be small and currently with a use on them, and these Realtors can come across opportunities if they know what you are looking for.
Please feel free to share with us below your experiences, comments, and questions.