Hey everybody, how's it going? This is Seth Williams and Neil Clements. You're listening to the REtipster podcast. Today we're back with another quarterly land market update. So over the past few years, the land business and really the entire real estate investing world has gone through some major changes. A lot of investors got started during a very unusual market cycle where money was cheap and properties moved fast and it was kind of hard to lose. But that's not the environment we're in anymore. Today, we're talking about what's actually happening behind the scenes in the broader economy, how those forces are affecting land investors specifically, and why deals have become harder for a lot of people and where Neil sees opportunities starting to emerge moving forward. So we're going to get into buyer behavior, interest rates, shrinking margins, land prices, financing pressure, and what separates the investors who survive through tough markets from the ones who disappear when conditions get uncomfortable. And the goal here is not to instill fear or hype anything up. It's just clarity. Because when you understand why the market behaves the way it does, it becomes a lot easier to adapt and make smarter decisions.

So Neil, welcome back. How's it going? Awesome, Seth. Hey, thanks for having me. I couldn't have said that better myself. You killed it on the intro. Happy to be here as always with the OG of the land investing communities, Seth Williams. So man, super happy to be here. What I want to do today as I do with a lot of these market updates, I want to provide data and just key points that any land investor or even real estate investors in general can take from this to know where the market is at, potentially maybe even where it's going. How does that impact their land investing business today and try to, instead of just giving my interpretations, try to let the data do some of the talking today. So I'm excited to get into it. So from your perspective, what does the land market feel like right now compared to a couple of years ago or even earlier this year? Have you noticed any big changes over the past like three to six months even? Yeah, I mean, obviously it has changed drastically even over the past year or two and you rewind five or six years, even more drastic than that, the COVID hangover and some other things we'll get into in a second. But.

What we're seeing in land and houses, no matter what side of the coin you're on, is that the market is just becoming more and more of a buyer's market. And so Redfin put together like a quarterly buyers and sellers report. And this is for residential single family real estate. Just in the reason that you'll hear me talk about a lot of these market updates calls that we've done. I think we've done like seven or eight of them now at this point. You'll hear me talk about single family residential lot instead of land investing stats because land investing stats are almost impossible to come by. But the single family market is a lot easier to have stats on. So that's why we kind of go through that. But in February of this year, 2026, there were 46% more sellers than buyers, which is the largest gap on record since Redfin has been collecting this data all the way back to 2013. And that has stayed consistent through April of this year. And you would think that, Normally what happens like seasonality, you have Q4 and even Q1. Those are kind of the low periods, the winter and the fall. And then you kind of get your boost going into March, April, May, June, and sometimes July is like the hottest part of the real estate market.

And unfortunately, this year, while there had been kind of glimmers of hope that that may happen, I use this analogy that it's almost like an engine that has a very minimal amount of gas just trying to start. You keep on turning the key, turning the key, turning the key. And then all of a sudden, you just get little sputters, you get sputters, you get sputters. And the objective is to capitalize on those sputters when they happen. And really, it's just because we're in a huge buyers market. Like I said, significantly more sellers than buyers that creates a buyer's market. And according to Redfin data, we've been in a buyer's market since May of 2024. And buyers are simply retreating due to high prices, high rates, layoffs, political uncertainty, which seems like we have a lot of right now. Anyways, that's what's going on right now. Additionally, I've said this before, but I think it's always helpful stats keep in mind is that in 23, 24, and 25, we actually sold less houses annually than 2008, 2009, 2010, the Great Recession. We have to go all the way back to the 1990s to hit a timeframe that was similar to that as far as low home sales, around 4 million.

And if you adjust it for a population, you actually have to go back to the 1970s and 1980s to get a population adjusted home sales comparable to what we are in now. So I think it's pretty easy to say that we are in a freeze, the housing market, which in turn impacts the land market. And the last thing I'll say about the market is that in a seller's market, the key skill is to be good at acquisitions. That's kind of what we all became really, really good at during the early COVID years. But as soon as it shifts to a buyer's market the key skill is to be great at dispositions and so put more simply when the market's hot you have to be good at buying when the market's cold you have to be good at selling and so the net effect of the market being like this is that your properties sell for longer your capital is out longer and you don't have as much velocity in what you're trying to sell do you know if the war in iran has been impacting anything and i ask that because what i'm about to say has nothing to do with land investing per se but the neighborhood where I live. I'm the president of our association. And we just had a meeting a couple of weeks ago. We were going to replace the road that goes through our neighborhood. It's long overdue. It needs it really bad.

And we had a price that was fixed in October of 2025. And we saw that price and we're like, yep, let's do it. But went back to the road contractors like, nope, that price is no good anymore because of events overseas. Prices are now like way higher than that. Here's the new price. And we're all like, no, thanks. Not going to do it. But I think about that. It's like, that's a major financial decision that impacts a lot of properties. You know, there's just a big economic impact to that. And I'm thinking if it's affecting that, do you think it has any effect on land or real estate in general?

1,000%. I mean, you hit the nail on the head. And even more relevant example, I mean, look at when you go to the pump. I mean, here in Texas, we were paying $2.50, $3 per gallon. Now we're $4.50, you know, a gallon.

And you got to think that it's not only your gas that whenever you go to fill up that costs more. It's everybody's gas, no matter how much money they make. But it's also business's gas. It's the ship's gas. It's the airplane's gas, which is why Spirit filed bankruptcy and the whole, you know, the whole airline debacle that's going on right now is because once expenses rise past a certain point, a lot of these companies are no longer viable. And so it's really interesting to see Iran's effects. We'll get into a little bit later too, as far as its impacts on interest rates. That is absolutely a huge concern as well. But the short answer is like, is Iran affecting real estate investors? The answer is absolutely yes. Absolutely yes. I don't know how much you know about markets like Houston, where like when the price of oil goes up, is it actually good for them? Like, does that particular economy actually do better because they're getting paid more? Or is that not really how it works? I don't have any huge insight into that beyond a guess, which would be that the people in that industry, in theory, would make more money. The chevrons, the shells of the world, the people who work for those companies. But for the 95% of everybody else who doesn't, or the 99% of everybody else who doesn't work for those companies, even when you're in Houston.

In theory, you have inflation that is off the charts. Our wages aren't growing. And so you're kind of losing money every month. Your gas is becoming more expensive. Your groceries are becoming more expensive. And so higher gas prices in theory hurts everyone. What is your read on competition right now in the land business? Do you think it's going up? Is it going down? Is it kind of going sideways with a lot of people getting in and other people getting out? Or what impact does that have on things, do you think? Yeah, I would say that it has a pretty big impact. I mean, so I wouldn't say I, you know, I think a lot of people fear monger and they try to get attention. And so they'll have maybe YouTube video or something that says, you know, lane investing is dead because all the competition or you absolutely can't do things the same way you used to do it, which. Both of which might have some truth in it, but they're fear-mongering titles to get clicks, right? My perspective would be is that as any niche in real estate investing gets more competitive, so from house flips to mobile home flips to land flips to developments to you name it, as any niche gets more competitive, more people are competing for the same amount of deals. And we already said that the number of deals are going down. So you have more people, less deals. So yes I mean I would I would find it very hard for anybody to say there's not more competition long story short and the net effect is simply you have to pay more to buy the same properties.

And if you don't pay more, then you have to do more marketing. And so no matter what, your margins are compressed of some kind. But there's actually a really good report. Adam puts out this report, ATTOM. It's a home flipping report. They put it out annually. And it tells us what houses are getting flipped and what's the data around it. So the return on investment in 2025 for the average home flip is 25.5%, the lowest since the Great Recession in 2008. It's down from 32% in 2024 and a peak of 61% in 2012. Man, what a time to be alive. Also doing substantially fewer flips in 2025. But the thing that caught me in this report that I thought was really interesting is that the average flip was bought for $259 and sold for $325, which is a $65,000 or $66,000 gross profit before the rehab cost. And so, I mean, especially on like a house, if you're buying it for $260,000, you're probably putting in, I don't know, $40,000 or $50,000 into that to actually renovate it to sell it for $325,000.

That's not actually that much if that's before the rehab cost. You're lucky to make $5,000 or $10,000 on a flip like that. In addition to that, the average house flip last year took 163 days. And put that in perspective, not only are you not making a lot because your margins are compressed, it's also taking you substantially longer to sell it. And the last thing I'll say is that the average single family house flip the year was 1978, which is the oldest that it's been on record since this data has been collected. And so what that means is that flippers are scraping the bottom of the barrel to try to get deals in. And so what does that mean for us?

It means that there is more competition and we simply have to be better than everybody else or we simply have to look at other strategies, which we'll get into a little bit later, but look at other strategies to produce the same returns that we had previously. I was on Reddit the other day in the real estate investing subreddit. And there was this conversation that came up. I forget what that original question was, but they were talking about bigger pockets and how like the website has gone downhill. The community is not what it used to be like.

It just kind of almost has like this sold out feel to it where it's just not relevant anymore. And I actually haven't hung out on BiggerPockets in years, really. So I don't even really know what's going on. But one of the takeaways that I got from it was that part of what made BiggerPockets grow like crazy when it did was, first of all, it was being run by the founder, Josh Dork. And it just kind of had a certain vision in mind for it. But also it was like a sweet spot where real estate started really low and it was just going up like crazy. Like there was a ton of excitement. There was tons of money to be made. like it was a much easier business to run. And now like, it's not easy. Like there's a ton of risk. Just look at those numbers from the house flips. Like what a terrible business model. Like I would never do that. It looks awful. Just like tons of risk and work for like almost no money. Like I, if that's really what people are seeing, I don't know why anybody's still doing that. There must be better examples out there or, you know, nobody would be doing it, but it just kind of goes to show like real estate is just kind of a hard business. And that's a very broad statement meant to make. I think there's a lot of nuance that comes into play when you start talking about vacant land specifically and what your strategy is and all this stuff, but it's just worth acknowledging like... It's just generally not a fun time right now for most real estate investors far and wide.

Yeah. And the same, I guess, time that BiggerPockets was growing its influence, right? 2010s or even before that, early 2000s up until now, it benefited substantially from market tailwinds, of course, right? And I just, the thought that came to my head as soon as you were talking about that is, I wonder how many real estate investors' businesses were similar to BiggerPockets were based upon those tailwinds, right? And not saying the bigger pockets couldn't have thrived without it, not saying that land investors or home investors couldn't thrive without it. It's just like you said, Seth, couldn't have said it any better.

It's just a much harder time to do this business than it was in the past. I don't think there's anybody who would disagree with that statement personally. There's even a just another random example of this. So there's this investment platform called Fundrise that was had all this buzz and a lot of people talked about it. I invested $1,000 in their platform nine years ago. And every single year, I would do an update to show people like, here's how it worked. Here's how the returns were, all this stuff. And these videos would get tons of views. Like, it was one of the most successful videos I would have each year. I skipped last year because I kind of just got tired of doing them. It's kind of boring for me to make them. But I hit it again this year. And like the thing is getting no views. Like it's like interest in this subject has just dropped off a cliff. You know, maybe it's just a weird anomaly. I don't know. But it was interesting that that kind of thing used to have a lot of buzz and lots of interest on it. And now it's just like, I don't know, people don't seem to care that much anymore. So maybe this means I can finally stop making those videos. Yeah, it's kind of the curse when you're like, I've heard when you're a famous musician, like Leonard Skinner singing Sweet Home Alabama. Alabama, it's almost like your biggest things or your biggest views almost becomes a curse. It just reminds me of that. I thought that was ironic. That whole song is how great Alabama is. And all they say is that the sky is blue.

Sky's blue in Michigan, too. Well, half the year it is. So let's talk about interest rates. Didn't the leadership at the Federal Reserve change recently? It did. Yes, absolutely. We're getting a new chair. So it's moving to a Trump-appointed chair who, in theory, is supposed to be a lot more bullish on rate cuts. Supposedly has a mandate directly from the president to actually reduce rates. But what I want to discuss quickly is I'm not sure that that's what's best. And so hear me out. Hear me out on this. So I saw a post. There's somebody that follows. His name is Jay Scott. He wrote Real Estate Proof, Real Estate Investing. He was actually a BiggerPockets guy for a very long time. We've had him on the podcast before. Dude, he's killer. Really, really good economic, mathematic-based brain that I love seeing his perspective on things. He just tends to look at things a little bit differently than everybody else and kind of read them between the lines. And He did a post actually the other day that was talking about the two-year treasury yield and how the two-year treasury was running significantly above the Fed fund trade.

And what does that mean? Well, that gap historically signals that the market expects rate hikes and not cuts. And the crazy thing is that we're in a world or a time where according to him you can have the market the people who are actually putting their money out there the market in general is trying to say rate hikes are coming and that's what they expect and that's what they're pricing in but you can have somebody who's appointed who is given a mandate from the president and the only reason he got appointed is probably because he's going to reduce rates sometime in the future. And so the interesting thing here is that as soon as this started happening, the two year treasury yield went higher. Well, the 10 year went higher, the 30 year went higher. So what happens when the 10 year treasury goes higher? Mortgage rates go higher. And so we've already seen since this appointment, mortgage rates go up almost a full half percent, like six and a half or higher. And so what does this all mean? This means that mortgage rates, business credit, land loans, you name it, are likely or even could go higher in the short term, even if the Fed doesn't touch the federal funds rate.

And in my opinion, rates are likely to be very volatile moving forward. And this whole rate reduction conversation that maybe a lot of investors are hoping for, I'm not sure is coming and I'm not sure it would be best. So like, let's let's talk about the 1970s. Okay, so I was I wasn't alive, Seth, I don't think you were either.

But in the 1970s, what happened was called stagflation.

So what is stagflation? That's when you have high inflation, you have stagnant growth, and you have high employment simultaneously. So why is this bad or what caused this? Well, it's bad because things get more expensive. Inflation, growth is low, meaning people are not making as much money, not spending as much, which fuels our whole economy. And in addition to that, high unemployment, meaning that people don't have money to spend anymore. And so we have historical context. history repeats itself. And in the 1970s, President Nixon appointed a Fed chair who, in the face of high inflation, decided to cut rates at the president's mandate. And that led us into stagflation of the 70s, which if anybody was alive during that time, you absolutely remember it. And what Volcker, who was one of the most popular Fed chairs or one of the most famous, he had to rise the Fed funds rate to almost 20% to curb stagflation. And that brought on a huge, brutal recession. And so that's why I say, even though maybe Walsh is coming in, and he has a mandate to reduce rates, if he does it too fast, we absolutely risk stagflation. And with all the layoffs, especially the big corporate layoffs, according to AI, which a lot of people are calling out as complete BS and baloney, that it's just their businesses are struggling. It's not really an AI-based layoff. It's just a layoff that needed to happen anyways. And so I think that there are a lot of holes in our economy that will be made known very, very quickly.

And we need to be careful what we wish for, I guess is the best way to say it. Yeah, that's the thing. I don't know that everybody fully understands that the federal funds rate does not directly impact what people's mortgage rates are or borrowing rates. It's more the 10-year treasury yield, but I guess that's impacted by the two-year treasury yield? Correct. Imagine going from historically low rates, like even imagine going now from five or 6% Fed funds rate and also mortgage rates. Imagine going from that to even 10%. Oh my gosh, our market would break. And so one of the things that I've learned heavily over the past few years that I didn't realize before, and I'm hoping maybe somebody could have a takeaway on this too, is that I didn't realize how much the real estate market is tied to rates. And that's Fed funds rate, that's Wall Street prime rate, you know, the business lending rates, that's, you know, the mortgage rate, the 30 year, that's the 10 year treasury, that bonds and things like that. If rates double, not necessarily that prices cut in half, but prices go down drastically, you know, and that's what we saw from 2022 until now, is we saw a price correction.

And a lot of places have actually not corrected too much. But I mean, you look at Austin, 25% plus correction, etc. That's my concern is we need to be careful what we wish for. And if we're really wanting rates to go down, we need to make sure that it's done appropriately and correctly because stagflation historically is one of the hardest things to overcome. And one of the only ways to overcome it is to kill the economy and go through a massive deep recession. And personally, I would rather have a few more years like this. That's an engine sputtering than rather than literally the car die on the side of the road and be useless for five years of a massive recession or depression.

So that's personally what I would rather see. Now, I think it was last time we were talking about how an economic recession and a real estate recession are not necessarily the same thing. They don't happen at the same time. So if we did have a massive economic recession, does that necessarily mean real estate will fall? That's a really good question. It doesn't necessarily mean that. In fact, I want to say, and y'all will have to look this up. I'm probably sure I'm going to misquote this somehow. But I believe it's 12 out of the last 15 recessions that we've experienced ever since like the 1940s or 50s, real estate values have gone up during the recession. During a recession, rates almost always drop because the government drops rates to try to incentivize the economy to start again to grow. It puts gas in the engine or it puts gas on the fire, however you want to say it. And so, yes, in theory, if we have a recession, that does not mean that an economic recession does not mean that a real estate recession would occur as well.

Because I would also say that we have been in a real estate recession for several years at this point, if not two or three, maybe even all the way back to 2022 potentially in some areas of the country, especially Texas. And so when you look at it that way, Could we have a cycle where economy goes way down, but the real estate continues to go up? That is very possible. But what I'm afraid of is we are, in Jay Scott's book, real estate investing, recession-proof real estate investing, he talks about how big depressions typically come every 75 to 125 years. And when was the last one? Well, the 1920s. So we are coming do for a very deep depression.

What causes a deep depression? Basically overextending leverage of the United States government. And then we have a debt correction from the United States government to where the government can no longer bail us out of recessions. So we actually have to experience the pain. So it's almost like a doctor saying, there's no more medicine, there's no more shots, there's nothing I can do for you, you just have to experience it. And so in the same way, a depression is coming. We don't know when, we don't know how, but I can tell you that the amount of debt we're accumulating as a nation is not sustainable. And so we're either going to inflate our way out by printing more money, which is what we're very, very good at, or we're going to let what happens happen and eventually go through a depression because of the debt bubbles is going to burst. Yeah, there is a well-known Harvard Business Review article, I refer back to it all the time, says that every 18 years, give or take a year, there has been a major economic recession. And it's interesting because 18 years ago was 2008, right? So I don't know, we might be there. I think the thing that everybody keeps saying is like, well, this time is different. I mean, this time we have AI, this time we have the internet, this time we have this or that. But you look historically, for whatever reason, it's always that 18-ish year time frame when it hits us again.

100%. Another last thing I'll say on this is that you have the business cycle, you have the real estate cycle, and you have the economic cycle or the debt cycle. And a lot of these cycles have different corresponding times. And so, like you said, maybe the bigger recession depression is every 18 years. And I believe that the economics and then also your debt cycle and then your real estate cycle have different timeframes up and down, up and down. And so anytime that you have two of them hitting recession or depression at the same time, that becomes a much worse recession.

Anytime you have all three hitting at the same time, that's when you have cause to worry about a big depression. How do you think through this? I know you're not like giving us financial advice or anything, but I've been having this dilemma in my own head. Like whenever I have a big influx of cash in my business, I'm thinking to myself, okay, do I buy a property with this? Do I put this in the 401k? Do I just keep it in cash? How much liquidity should I have on hand? Money that I can really quickly and easily get back and start using versus tying it up in something that I can't touch until I'm 59 and a half or until I sell the property or whatever. I don't really know that I have a good answer for that, but it's just something to think about a lot. When you sell a big property, is there something like, we're always going to have X amount of cash just sitting there just because. I know it's not earning a big yield, but I want the liquidity. If we think a big recession or depression is coming, like what do you think is a good policy for that? I think that's a really good question and an especially relevant question to right now. I would say it all depends on your current risk. And what I mean by that is like your portfolio, your investment portfolio risk, your risk allocation. And then I think it also depends on how much leverage you have. And so like for me, I like to keep a lot of cash on hand and I don't have it like a specific ratio or anything like that, but I like to keep a lot of cash on hand. I mean, we run a pretty sizable business.

And I've also got several rental properties. I've also got notes. And I've also got millions in debt against a lot of those properties. And so what I'm the only reason I keep so much capital is one, I need to be able to hop on good deals when they come about. And you can have credit lines, you can have funders, you can have lenders. But at the end of the day, there's always going to be a scenario when you need to close on something within like five or seven days. And if you don't have the cash, you're going to lose it. And I've been bit way too many times on that. So now I keep a lot of cash on hand. And then secondly, what I'm trying to prevent is my real estate portfolio, my cash flow based portfolio, my rental properties. I don't want to be forced to sell those during desperation and out of panic. And so I keep enough cash where I could cover those payments six to 12 months, if not longer each, even if we had vacancies across the whole portfolio, which you're kind of if you're thinking about, you know, a decent sized portfolio, like that's a lot of cash. And yeah I mean I could have that deployed into more properties I could have that deployed even as a funder you know the funding company we run together Seth I mean like we could deploy a lot more capital on funding we could deploy a lot more capital here we could you know deploy a lot more capital in a lot of different areas but.

I would definitely say right now is not the time to be over leveraged because the people who lost their shirts in 07, 08, 09, even the 20s, even whenever recession, depression you want to talk about is because they were over leveraged and they thought that it would continue. But the reality is that the music always stops. And so you've got to be prepared for the next phase. And so I'm trying to build up my cash. Not that it's the best use of money today per se to have it in my bank account, but I will be very grateful two or three years from now or even 12 months from now when maybe the market's even deeper than it is now and I can just go swoop properties. And we're already seeing some of that. Yeah. And when things crash, holy cow, is liquidity an amazing thing? Like you can capitalize on so many opportunities that other people can't do. I remember thinking that back in the, you know, 2009, 2010, I had like no money at the time, but I just saw all these amazing deals everyone. It's like, man, if only I had millions right now, this would be incredible. And it would have been. So if you can have cash on hand for when things go down, it's a great, great opportunity. Well, remember I said earlier on that home flipping report from Adam, you know, the returns in 2012, which is right out, you know, a few years outside of that recession, the great recession.

The ROI on people who were actually able to flip properties and maintain access to capital was 61%. And now it's only 32%.

So you mean to tell me, the data tells us that it was twice as profitable percentage-wise to flip houses in 2012 than it is in 2024? Or sorry, actually, I misquoted that. It's actually 25% now and it's 60% in 2012. It's even worse, two and a half X. Well, interesting thing was, I remember even in 2012, there was a lot of the mentality of like, real estate's bad, it's risky, look how bad it went down, don't do it. Like that was not everybody. I mean, the smart people knew better than that. But, you know, in the headlines and just people who didn't understand money or real estate, that was a common sentiment you would hear back then when things were the best that they ever were. Yeah. What is the Buffett quote? Be aggressive when people are fearful. Be fearful when people are aggressive. The fact that we're talking about house stats. And I know you said earlier, like a lot of this land information is just hard to find. So we got to sort of rely on house stuff. I was going to ask you, why is it so hard to find land stats and what would have to be true to get better, more relevant information to use? But it looks like there kind of is more information now. Realtor.com has a land price study as of April of this year. Tell me more about that. As of literally like in the last 30 days.

So we've been we've been trying this, you know, land market update for two years and trying to piecemeal different things together from different areas to try to give everybody some kind of update on land stats. And finally, Realtor.com thought to prioritize it and started coming out with a land price study. And now how often they're going to do it, that'll be yet to see. Is it going to be quarterly, annually?

But it's the first time ever that I've seen a big data producer compile it nationwide with accurate data. And so it does have some interesting things to note. Yeah. One of the most interesting parts of the study, this, like we said, was from April 2026, is that land prices rose since 2019 until now over 77%. And so you think about that, that's absolutely insane. That's actually probably more than most houses rose in the same timeframe. And we actually had in Q1 of this year over almost 425,000 land listings. And the median price per acre of $62,000. But the other interesting thing that I saw is that nationally, the land inventory is actually down almost 24% from 2019 and does not recover. Now, take this with a grain of salt because this is national data, because especially if you look in the South, Florida, Texas.

Georgia, I mean, you name it, and the South, that was kind of the explosion a few years back. The supply is not going to be down. The supply is absolutely going to be higher. However, nationally, it's down 24%. And so what does all of this tell me? Well, I've talked multiple times about the COVID hangover, where people got used to like running their business with the tailwinds behind them. It was essentially impossible for them to fail because they had 0% interest rate environment. And then now since June 2022, and especially even more since 2024, for when we officially hit a buyer's market, like the hangover is coming back. And although prices are going up, if supply is down, kind of like we said earlier with competition, it's going to be a little bit there are less properties being sold. We know that. That's a fact. There are more land investors. We know that. That's a fact. And prices are all over the board. In some places, they are up here. In some places, they are down here where they used to be here, right? And so the different parts of the market across the nation are going to recover in different ways. The last thing on that study that I thought was interesting enough to share with y'all is build ready lots. Statistically, were six times more valuable per acre than raw land. And so statistically per acre build ready lots across the nation averaged 126,000. This is per acre. And it was a median acre of one acre.

Partially developed was 53,000 with 1.3 acres. So that's almost in half. And then raw undeveloped land averaged a little bit over two acres, median price per acre of 22,000. And so what does that tell us? Well, it tells us that utility, usability, and build readiness is more crucial than ever for land investors. And it's definitely something to pay attention to as we move forward. I don't know that you know this or that they even explain it that well, but with that realtor.com land price study, is that looking specifically at like MLS sold properties or like everything sold, if there's a way to even see that? I would imagine since it's a realtor.com study and they have MLS-based listings that it's solely pulling from their data set, which would be MLS properties and not land.com or anything other than that. So that's my assumption, because that's the best data they'll have access to. You know, as you were talking there, Neil, I was thinking more about like, I wish there was more of this data, a way to make meaningful conclusions based on what it says. And then it hit me, wait a minute.

Land Portal has this. Their whole market research section, it's taking MLS data and you can segment it by county or by state. Zip code is coming up pretty soon, but you can see like price per acre based on the past seven days and 14 days and 30 days. And they've even got this LP intelligence thing now where you can just like ask it whatever you want to know. Like, hey, tell me this nationwide or in the state or these zip codes or whatever. I haven't even dove that deep into it yet, but might be worth checking out. If you're a Land Portal user, that's a thing. You just click on market research and you can see the LP intelligence little chat about in the lower right corner. And it's kind of like a clod that's hooked up to all of that MLS data. And you can ask this stuff. So I mean, next time we can look more into that. Yeah. AppGee brothers are absolutely killing it with that software. We've been on a few different webinars that they've been doing lately to try to figure out how to utilize the software better, especially the AI integrations. And they were talking about how you could use it for due diligence, automated. And so we're absolutely looking into that. I would say any competent land investor should absolutely explore that for their business. So Neil, if you're talking to a newer investor or even an experienced one who feels discouraged by this market or just isn't sure what to be doing with the information we're throwing at them, what should they be doing? What do you think the takeaways are in terms of action plans here? Yeah, that's a good question. Because I mean, it's good for us to talk almost 40 minutes here that we've been on here. Good for us to talk about what the market is doing.

But the next question, like you said, becomes, well, so what? Like, what do we do about it? How do we react to it? How do we prepare for it? So I've come up with, you know, a few different items that I think everybody should be looking at their business and should be actively adjusting for. So the first one of which is investors win, basically who wins in 2026 investors who underwrite for the future and not for today. Chris Dove had an excellent article on your on your REtipster website, Seth, about how to use different software programs, how to make assumptions for the future, and how to do really competent underwriting for the future and not today, And the main takeaway that I got from that article and what I recommend everybody on here do is when you underwrite for today, you look at comps for today. But the problem is when you look at sold comps, a lot of times you're looking at data from three, six, nine, even 12 months ago. And.

Even today is different from that time frame, not even to mention the future. Because a lot of times when we're doing especially like a land development, that's going to take nine to 12, if not 18 months, we've got to be experts trying to predict where the market is going to be in the future, because that's what we're going to be selling into once our development is done. And so how do we do that? Again, I'd highly recommend I'm sure Seth will link the article in here, check out that Chris Duff article, where he talks about specifically how to price for the future, the technology that he's using to do it, and how AI is empowering him to do that. By the way, the show notes for this episode, wherever you're listening or watching this, I'll include a link to that in the description, whether it's Spotify, Apple, YouTube, just click on that and you can get right there. I'll have links to a lot of stuff that we're talking about here. So the second people who win is investors who maintain access to the best capital. And so that's, we talked about that earlier, Seth, you asked how much capital do you keep? How much do you deploy? What do you do? I think it's all about keeping the best capital stack. And so if you're going to funders to get partnerships, that's one option. If you're going to private lenders, if you're going to banks, if you have your own cash, this is definitely a time where I believe we've seen a lot of funders go out of business, a lot of popular people who were lenders going out of business, a lot of banks scaling back and having more intense down payment requirements, higher interest rates.

Basically, everybody is trying to deleverage and trying to de-risk. And so this could be a fantastic time for you to find some good deals on the market value. But the problem is that if you don't have a good capital stack, you can't buy them in the first place. So prioritize getting that capital stack. And the next one is investors win who create cash flow and not just do flipping.

And that's incredibly important. I was talking with Armand Primji. He was on My Real Deal with Neil podcast just about a week ago, and I don't think it's posted yet, but, you know, he was talking about how to survive the downturn in the market, how, Things were going incredibly well for his business, netting seven figures, doing all this awesome mail, doing this really cool stuff. And then all of a sudden the business shifts, the mail doesn't work. And well, what the heck do you do? You go from making over seven figures a year to losing six figures. And I think his wisdom was so timely for us here. And what he said is, I reinvested some of the profits during that time frame into self-storage, investment properties.

And fortunately during that time and now he's able to live off of his passive investments and then now he's going out and able to create even more value through ai and some other things he's working on so i won't spoil it too much but that's coming up on the real deal with neil but investors when he'll create cash flow and not just flip think about the long term not just on that whole subject when we say cash flow are we talking about land notes or is that not what we mean we're talking about no no something else something disconnected something permanent that's going to last as long as you live? Or are land notes a viable version of that? I think it depends on how you run land notes. I would quantify that as high quality, high performance, minimal default land notes, which I would say less than 20% of people are creating. From what I see. While also acknowledging those don't last forever. They'll probably pay off within the next three to five years. So it's like, there's that too. How valuable is it if it's going to be gone in that amount of time? Correct. Well, and also how valuable is it if it's defaulting every other year?

Because in essence, that is just flipping to some extent, right? So, and even though there's some really good operators like Dave Dennison, just killing it with that model. But I think it has its ups and its downs. And at what point does low-quality notes become basically just another flipping business versus actually creating any kind of cash flow? Long story short. So my best advice to people would be sock away money into your future bank account, passive investments that yield cash flow. And this doesn't even have to just be real estate. I mean, you could do notes. You could do rental properties. But you could also literally just do a dividend stock. You could do S&P. I mean, you could do whatever. Like cash flow looks different for everybody. But I would hate for a flipper to look up, do multiple millions of profit on flips, and then all of a sudden have nothing to show for it because the business don't want to work. Versus socking away a little bit to do investments over time while you're making the big bucks. I've heard the mentality from lots of land investors over the years, particularly when it was going really well, that like land just somehow inherently deserve their loyalty. Like that's where they're supposed to do everything. And I'd say, no, like land does not deserve your loyalty because there's probably going to come a day where it doesn't pay as well as it used to. And things change, you know, diversify. There's value to that. And like you were saying, Neil, like it doesn't even have to be real estate.

Fundamentally have cash flow from multiple sources.

100%. The next one, investors win who do things others aren't willing to do. And there's been a ton of podcasts lately that you've done. One with Ajay about curative title, one with several others about subdivides, going vertical, doing manufactured houses. I know we've talked about it a ton on The Real Deal with Neil as far as subdivides and going vertical. And so in a market and a niche of land investing that is perpetually getting more saturated with more and more people wanting to come in and do this because it was low-hanging fruit for the longest amount of time.

Eventually, the niche becomes so crowded, the margins become so compressed that you have to go to do things others aren't willing to do. Like curative, title, or messy deals, you have to be able to go in and do that, which is not comfortable. It's not comfortable not to buy through a title company, not comfortable not to get title insurance, not comfortable to have to call these heirs, subdivides, it's not comfortable to have to wait for all this stuff, deal with all the municipalities, going vertical, it's not comfortable to have to, you know, put a house on land, do all the development work, etc. But I do believe that all of those three have a huge moat, that the people who kill it in those regards and develop good systems, processes, due diligence, underwriting, etc. And capital stacks for this can absolutely kill it while everybody else is just, I don't want to say struggling, but competing. I know we were talking earlier today about, sounds like you've been getting into the AI world a little bit more, which I think is smart. But what do you think about AI? How important is that right now in people doing well in this business?

That's a really good question because I resisted it for the longest time. I mean, even as long as short as three or six months ago, I think it's episode 250 where you have like six different land investors on here. You know, you were asking about AI and you asked the question of, you know, how are you using AI in your business? And my answer at that point was not at all, like zero percent. And so there was, gosh, I can't remember his name. It was one of the investors on there was talking about Abacus AI, which basically like. Justin Fiché. Thank you. And so I signed up for that, got competent and using, you know, Claw, Nano Banana, GPT, et cetera.

And, you know, I use, I don't know, 30 minutes a day, quick prompting. I would definitely not say AI has changed my business in a meaningful way. However, it has enhanced my personal productivity. And so to me, enhancing personal productivity does actually enhance the business. So I guess it is, I guess you could say the business has been enhanced. But I would say that investors who win in 2026 are those who embrace the technology, kind of like I'm saying I have finally done, and they don't fight it. I'm not one who subscribes to AI is inevitable. You're going to die if you don't use it. You're fear-mongering. I don't subscribe to that. Maybe it will, maybe it won't. But if somebody comes out with an AI that actually or an automation that actually helps my life, my personal productivity and my business, I have no issue paying for it. And so that's my philosophy on embracing technology is that even if you're not technological, then pay somebody else who is.

Yeah. And I think there is a version between that. There's those who embrace AI and those who fight it, but there's something in between where I think it's people who are just kind of like aloof, we're just unaware, just don't really care, that kind of thing. And I kind of equate that to fighting it. Cause like, if you're not understanding it and using it, then it's like, you're in the same spot where like, you're not able to benefit from it. I think we're getting to a point, a tipping point where they were like, I don't want to say you have to do it, but there's just like so much talk about it. Like it seems to be on everybody's minds. And for good reason, it can do incredible stuff. So I think we'll see more and more people continuing to embrace that. Also, as it gets easier, I know there are things that you can do today that you could do a year ago. It was just really hard to figure out how to do it. Whereas now it's like way less difficult. Like you can just kind of word vomit whatever you're trying to do to claw it and it'll help you figure it out. That's a long way from where it used to be a year ago where like you had to connect all these different parts and it was a huge hassle. So it'll get easier. Now, have you, I know you've told me that you were actually able to trim and reduce staff due to AI. Have you talked about that anywhere yet or anything?

Just anecdotally in my conversations with people. But yeah, my editor for REtipster, that particular position, AI does all of that job now. There's nothing wrong with my editor. It's just AI kind of makes it much faster and easier and less expensive. And just in no way did it make sense to continue paying a human for that when AI can do that stuff. But the same thing is true for so many of the things that all of us do. I mean, think of anything where, like, you're clicking a lot or typing a lot. Like, you don't have to do that anymore, as long as you can articulate to AI what to do. Even just today, I was trying to figure out how to set up an automation, and Claude was telling me, hey, go to this website. Click this open, put this in there. Eventually, I was just like, why don't you tell me to do this? You do it. Like, you go click it. You figure it out and come tell me when it's done. And it did it. So it's like, you just have to realize, like, hey, I can do a shocking amount of this stuff now if you just tell it to do it. That's awesome, man. Love that.

So the last part of who wins in 2026, investors win who build a business and not just deal flow. And so I do believe that there will be a key distinction moving forward between people who just kind of want to do a deal or two a year or want to do this part-time versus people who make a business out of this.

And that's what always happens during kind of recessionary periods or periods when the economy is suffering or when the real estate cycle is low. It really does filter out the people who want to just do a few deals. It becomes a lot harder for them to do that. But the people who build a business and either are AI empowered or have staff or make this into something that's their full-time gig, I believe truly have a huge advantage over somebody who's part-time right now. Now, I've heard this said many times, we've got people running a business versus people who are just focusing on deal flow. How are those things different? Like, how do I know where I am? Like, am I just doing deals or do I have a business? How do I measure myself and know, yep, I'm doing it right versus, uh, I'm kind of on shaky ground here. Yeah, it's a key distinction. I mean, so So what comes to mind is I think about Robert Kiyosaki's Cashflow Quadrant, which basically, if you've never read that book or you've never seen it, it takes a quadrant and it has four different categories of income. So one is employee, you work for somebody else. One is self-employee, meaning you work for yourself. One is a business owner, which means the business has systems and models that run it with your intervention, but systems and models run the business to some extent. And an investor means that your money makes money for you while you sleep.

And so my best definition of like, what does a business owner look like versus somebody who actually does deals would be a business owner is somebody that the systems and the processes that they have implemented essentially are the business and run the business. Now, they might still have to be there every day. They might still have to coach and train and do other things like that. But a true business owner and the true value of a business at some point comes from the ability for the business to run itself to some extent. Right it's never going to be perfect it's never going to run itself a hundred percent but the value comes in i guess a system and a process versus somebody who's just self-employed or even an employee of somebody else that's just like hey just doing some deals versus no this is how our system works i think that's part of why ai is such an exciting thing for our particular type of business because if we're running like a construction business or a landscaping business or a janitorial service you need people for those businesses to physically be there and do stuff stuff. With land investing, there's stuff you need people for, but like there's a heck of a lot of stuff that AI can absolutely do. A lot of what we are doing is sitting behind a computer, and that's perfect territory for AI to come in and help in a big way and make things run even when you're not there. So anyway.

Yeah, I would just leave you with one little tidbit, which is the reason that most investors won't do these things that we're talking about today as far as like how to win won't adjust. They're just doing deals to do a business owner. The reason a lot of people won't do this is not because of a lack of knowledge. I do believe that we have a lot of overeducated.

I'm trying to think of how to say this right. We have a lot of people who are overeducated and under action.

And it's not a lack of knowledge. It's a lack of discipline when the market gets hard. And so that's what I would leave us with is that this business is it's simple. It's not easy, though. I mean, if you have consistently generational follow-up, you have ready and available capital, you're aggressive on selling the properties, and you have efficient and effective systems, and you're constantly improving, I mean, that is, I know I just said that in like 10 seconds, but like that is the business, right? Acquisition, capital, disposition, and refining. And so that is the business, and the investors who win in 2026 are the ones who are going to systemize those items. You know, my brain keeps going back to that example with Armand that you mentioned about how, you know, the land business is harder. But like, thank the Lord, he has these self-storage facilities to throw off cash flow so he can sort of weather this storm. Now, think about somebody who like, what if they didn't buy self-storage facilities when the times were good and they don't have the cash flow now? Like, is it just too late? Or like, what could a person do right now if you don't have that cash flow? Like, are these deals still there? Or are they kind of just screwed? Like what's what's their game plan yeah I wouldn't say that anybody is ever screwed per se, I mean, because you got to think about like, even during like the great recession of the twenties and the thirties, like you still had people get incredibly wealthy. Our business isn't doing incredibly well. I mean, we had our biggest year last year. Hopefully we'll be able to match it this year, but we are a little bit down this year, unfortunately.

But I mean, heck, I would even say last year was hard too. And we had our best year ever. And so I, and I just attribute that to us doing bigger and better deals. That was kind of our secret of success. and I've got many videos and things. I've talked about that. Basically, we, you know, increased our average price range from $50,000 to $500,000, right? That was our secret that anybody could implement. But are they screwed? No, no. Is this business harder? Absolutely, yes. And so at the same time that they're not screwed, they have made it harder on themselves by not socking away money when they had it, if that makes sense. But I'm a subscriber to One Deal Can Change Your Life Forever. I've had that happen multiple times in my business. My very first land flip that netted over $300,000 that was in 2020, absolutely changed my life. I had one of my biggest land sales that we sold for $3 million just last year, again, absolutely just changed my life. And several in between that. And so to say that somebody is screwed because they didn't sack up capital in the past or they're just getting started now so they're screwed is absolutely incorrect.

However, is it harder to do now than it was in the past? Yes, it is. So they will just have to work harder for the same return. Yeah, and going back to your point about investors willing to do things that others aren't willing to do, like I look at everybody who's doing really well right now and that's absolutely what's going on, including you. I mean, you do stuff that is so far beyond what most people would ever be willing to reach for in terms of like risk you're willing to take on and the complexity of the projects and the size of the project. I mean, you're just not afraid of that stuff. And I think that's just a very common attribute. And it's not just about not being afraid, like you gotta be smart too. Like being unafraid can actually be really dumb if you're not careful with what you're doing. But it's that mixture of like calculated risk and just the willingness to take the risk. and then actually doing it. So, and not everybody is there. That's just the fact of the matter. Well, thanks, man. That's a huge compliment. I appreciate that. I would just say the irony of all of this is that if you were to ask me, do you think your business is risky?

And I would, to some extent, say no. And the reason I say that is because of my due diligence, my underwriting and my systems that we've lost money a handful of times. I know exactly why we lost money. And when your business is buying land at 40 to 50, if maybe 60% of market value, I mean, as long as you have some utility as far as like it's in demand and you've verified that there's adequate demand, it's kind of hard to lose.

So that's what I'll just say. We've even got, it's funny, I've got a guy on my team, my acquisitions manager, and we're kind of talking about a few different investment things. And he's talking to me about, well, instead of buying a single family house and get my first rental properties, I'd probably just rather put the money with you and land and maybe negotiate some kind of split or something. And it's the irony of, he sees it safer to put money into the business that we run every single day with land that would be traditionally very risky per se. But he sees that as safer than running a single family house right now, a rental. So anyways, it's just, I just find it ironic because the deal is you say are risky. I see as no brainers. Yeah, I think I would say they're riskier compared to what the average land flipper who just took their first course and what they're expecting when they hit the ground running. It's riskier than that. But compared to like everything else in the world, not necessarily. Yeah. So cool, man. Well, if anybody wants to reach out, I believe Seth will link below. best way to reach me. But other than that, I really appreciate your time, Seth. I hope that everybody listening to this got a lot out of it. And that's our Q2 update. Yeah. Thanks again, Neil. Thanks for being here and sharing your wisdom and your research with us. Again, if people want to check out the show notes, I'll have a link to it in the description, wherever you're listening or watching this. And we will talk to you next time.