Seth: This is Seth Williams and Neil Clements, and you're listening to the REtipster podcast, and we are back here again with another quarterly update. This is Q1 of 2026. So Neil, welcome to the show. How's it going?

Neil: Awesome, Seth. Always an honor to be here. So yeah, I made it through. We're here today. I made it through the Texas Snowmageddon, our version of a blizzard. For those of you in Texas right now, you kind of know what I'm talking. It's probably Michigan's every day, but for Texas.

Seth: How much snow did you get?

Neil: Oh gosh, it was hardly anything. It was just ice. The trouble was you're just slipping and sliding on the roads and nobody preps our roads. Yeah. If you don't have a four-wheel drive vehicle, you're toast. Yeah. It was funny. I saw this little Facebook reel thing earlier today of a guy who was walking on his driveway and he's like, there's like an inch of ice here on the road. And I'm just thinking, and? Like, isn't that what winter's all about? But I guess that was abnormal for where he lived.

Yeah. If there's an inch or two of ice on the road in Texas, you better bet it's like pandemonium over here. So your every day for several months is like never happens here. So we're not used to it.

Anyways, man, I'm here. We're having fun. What I wanted to start off with today, going over on a market update, I wanted to kind of give a tale of several different markets. And I wanted to give just kind of a brief story of some of the properties that I have and how quickly they've moved.

So the first property I want to go over, super rural, 85 acre property. I bought it two years ago. This is high 300s range. This is like two and a half hours east of Dallas. And I got a really good contract on it, 90 days in, doubling out my sales price, gonna make a huge amount of profit, that falls through. Well, due to this market we've been in, unfortunately, with several price reductions.

Almost two more years on market, we finally get down $200,000 less. We get down to 400,000 from a $600,000 price that we had under contract on. In just this last week, I finally get it under contract. And so that's kind of the tale of the markets that we're going through.

And on that property, I also, my loan came due 12 months in, I had to pay it off. And at the end of the day, I'm barely going to break even. So that's like property number one.

But then you have property number two, which was a property that I bought 24 acre subdivide around 400,000 that we subdivided it and titled it. We sold it for like 1.1 million and four different lots. And we could not keep buyers away from it. It sold like 30, 45 days on market and closed most of them cash transactions. And that whole thing occurred while I was working on the two-year project that wasn't selling.

Then I buy a third property a few months back. It's a mobile home, buy it for low 100s, put about 60 grand into it, flip it for mid 200s. And again, by the time I renovate it and get it on market, it sells within a week or two.

So I'm telling you all of this to show that not all properties and not all areas are created equal right now. There are some investors and some properties are absolutely crushing it while others are out there just absolutely bleeding and just trying to do anything they can to survive.

And so what I really want to go over today is I just want to break down and give some more data on what I see is going on in the market. And I want to give some tips for how to survive and then also how to thrive in 2026. That's what we have to do.

Seth: Those first two properties you just talked about, in hindsight, everything's always clear. What are the obvious things that should have kept you away from the one that was, I think you said two and a half hours east of Dallas? What are the things that you see now that would be like in the future, don't do that, but definitely do this?

Neil: I would have been a lot more careful on my first one about due diligence. I did get good due diligence. And we have several videos on the Rio Deal with Neil podcast about due diligence for all different kinds of properties. But in my due diligence, I uncovered that a water meter was not available. And that was the absolute downfall of that property because I was always thinking, well, we can always do a well, a water well. But it came to find out that even at a thousand feet, there was no water. There's no water out there at all.

And so what it turned the property in for those 85 acres out in, again, rural America, rural Texas, it turned it from somebody could run cattle or somebody could do something on it, build a residence, to now whoever came through had no water access. So they were going to have to maybe just do hay on it or farming or something like that that didn't require any kind of water meter.

And so I would be very wary of qualifying properties and making sure they have full utility access. I would also make sure that if you're going into a rural area, once you get above in my area, three, four, 500,000, once you're doing those big rural recreational tracks, it's just such a different market. And for me, that market took one of the hardest hits from 23 until now.

And so my other two properties, what I learned, instead of selling the 24 acres for like $500,000 or $600,000, making kind of a base hit, a six-figure profit, we turned it into a multi-six-figure profit by making it into four and six-acre lots that had utilities on site ready for people to build.

And so we'll get into kind of like some themes and stuff later, but due diligence, usability, having utilities, all key, key themes for success in land investing in 2026.

Seth: With that first one where you had to pay off the loan after 12 months, is that a problem? Or like, did you just have the money you could pull from somewhere else? I mean, it sounds like for some people in some situations, that's like nightmare fuel. But was it a bad thing?

Neil: It wasn't fun. Yeah. To some extent, sometimes it's borrowing from Peter to pay Paul, if you've heard that expression. You essentially, you know, I had other credit lines that I could borrow from that had differing maturities. And also I was able to sell a property very fortunately 30 days before the maturity came. And now that lender, I'm sure would have worked with me, but I had already gotten a six month extension. I think it was 12 month original balloon. And then I got a six month extension, 18 months. But my interest was racking up at like $2,500 or $3,000 a month. The rate was like nine and a half because that was prime plus one rate at the time. And I was just like, man, what am I going to do?

So, but the good thing is, is for me, that is a rare property. It is not, I would definitely not say that that is often. But the whole reason I show you the three different properties is to show that there are different land investors in different parts of the country with different properties going through vastly different conditions right now.

And just because maybe you're going through that right now doesn't mean that's where you have to end up. Or because you're not experiencing that, that doesn't mean you won't have a property like that.

Seth: It's a good reminder that like the lessons you learn on the bad ones, they're great lessons for that market. Sometimes they're kind of irrelevant lessons for other markets. Not always, but if you are able to stick in one spot and sort of get to know those hot button issues really well, it's easier to streamline your experience and really make it worthwhile when you can just keep repeatedly doing the same thing. So anyway, let's move on. What's next?

Neil: So let's talk about the story of 2025 and 2026. So let's kind of get into the market update portion here. I would say the story of 25 and 26 is that buyer demand is incredibly soft and it is very dependent on the property and very dependent on the area.

So like, for instance, let's talk about how bad of a market that we are in right now. I don't think that maybe the people listening or watching know how bad this real estate market is. So in 2023 through 2025, so three years, in that timeframe, this is houses, we had less houses sell than 2008, 2009, 2010.

And so you think about the worst real estate market in decades, probably 30 or 40 years of 08, 09, and 10. We're selling less houses and less properties the past three years than we were back then.

Seth: Is this nationwide or is this Texas?

Neil: This is nationwide.

Seth: Wow. Why am I not hearing about that in the news? That sounds awful.

Neil: It's like all the buzz at the realtor conferences that I go to, right? Is the people on stage saying that we're selling less houses now than we have in those time periods. And so it's just crazy because, and why is this happening? Well, we've talked about it several times on our market update calls, which is we're going through the hangover after COVID, right? We can't have the big price run up, all the doubling of prices, the lowering of interest rates, you know, kind of cause that. And then now we're dealing with this hangover phase.

And what you and I have been talking about over the past, gosh, year and a half, the six calls that we've done this, we've been talking about when do we get out of this hangover? And I will tell you though, if you're starting to look at mortgage applications, which are ticking up. You're starting to look at interest rates for houses ticking down. You're looking at interest rates for land again, ticking down. We might have a 2026 finally with more buyer demand than we had for the past three years. Now, is that going to be exponentially higher? I don't think so. I think we're still kind of maturing out of a hangover, but I don't think we're going to be out of it yet.

And the economy has a little bit to do with that, which we'll get into in a second.

But the crazy thing is that this whole buyer and seller demand, these buyers, they're soft. The buyer demand is soft. The affordability is not there. The buyers are not coming out. And so the only reason that some of these markets haven't crashed, so some have, you know, maybe in the Southwest or Florida or parts like that, some have crashed. But for the most part, we're not seeing prices go down tremendously.

Texas might have taken a 5-10% haircut. Some other parts of the nation, the southeast, the Sunbelt states, 5-10%, things like that. These are home and land prices, but the sellers are basically saying, we're not selling. The buyers aren't here. So the sellers are saying, we're not selling.

The hurdle for us as land investors or real estate investors, especially as flippers, is that we don't just get to tell the market or we don't get to just say, oh, we're not selling now. We have to be able to buy properties and flip properties for most of us to survive and make income. And so we're having to discount properties to move them.

Seth: And how much discounting are we talking about in your case?

Neil: Man, it really just depends on the property and on the area. I mean, sometimes we're having to discount them 5% to 10%. Sometimes like that property in rural East Texas, that 85 acres, I still think market value based upon comps is probably 500,000 and I'm having to sell it for 400. And so, I mean, you're talking about, what is that, a 20% off? I mean, this is subjected on MLS, nice pictures, everything else done right is still having incredibly soft demand.

And so that's what we have to be incredibly careful of.

Seth: If the norm is going to be discounting prices lower than you otherwise would have, does that mean we ought to be offering even less than we otherwise would? Is that a fair logical assumption to make?

Neil: 100%. And that's a perfect lead-in to what I was about to say, is that the investors who have survived and thrived through 23 to 25 and into 26, they essentially went to their front end, their acquisitions. They let their dispositions, what they were selling, inform their acquisitions process to be able to change their offers because they know they can't sell it for as much. So they're not going to sacrifice their margins. You know, we're greedy land investors, whatever. We're not going to sacrifice our profit margins just to like get a property in. And so, yes, offers have gotten lower.

There's no secret there. And it's because properties are so much more available. I mean, if we tried to run the business like we did in 2020 through 2022, we'd be buying at prices that are unsustainable and we wouldn't be able to turn a profit.

Seth: So I was just talking to our mutual friend, Chris Johnson, a couple of weeks ago. And he was telling me that pretty much all the properties he buys now are just straight from the MLS. So none of this stuff about discounted pricing, he just buys off the MLS. It's like, oh, wow. I mean, first of all, I couldn't imagine anybody ever saying that three or four years ago. That would just be crazy talk. But that's his business and he's doing well. So it's like, okay, there's a spot for that too.

So how do you reconcile this? Like, how do you know if it's okay to do MLS versus, nope, sorry, you got to make those prices even more discounted than before. It kind of just depends on like, well, what are you doing to the property? Are you improving it? Like, is that the bottom line?

Neil: Well, that was my first thought. As soon as I heard those words came out of your mouth about buying on MLS, I was about to say, man, what a market we're in, right? At the point that you're buying on MLS, you know that the market has shifted. There's no question. There's no debate on whether or not the market has shifted. Like the very fact that Chris, who has a very successful land investing business can run almost his whole business off MLS.

Can you imagine having this conversation two years ago? Right. There's no way, there's no way it would happen. And the thing is with my business too, right now, over half of our deals come from MLS also. So like, yeah, there are big land investors out there running good-sized businesses just from MLS.

And so, yeah, it's crazy, man. Absolute craziness.

Let's get into interest rates. So we kind of talked about it a little bit earlier about rates and what those we're looking at. So since the time we talked last year, October, November, we have had three different rate reductions of quarter points. And now this is the Fed rate. And as we've talked in the past, we've got to know that residential mortgage rates, 30-year fixed mortgage rates, don't follow the Fed funds rate. Those are two different, two different influenced by two different things.

Do they have some correlation? Maybe a little bit, but a quarter point off the Fed funds rate does not mean a quarter point off residential mortgages. Okay. But what it does do for us is it directly impacts our land buyers. And so while the residential side, so people wanting to go out and put homes on our land or doing one-time closes or putting manufactured housing like land home packages, they won't be benefited from this, but we as land investors will.

Because the reality is if you go to the bank today versus a year ago, your rate is going to be three quarters of a point or a full percentage point lower than it was. So that saves you on costs. That's great. So you can offer a little bit more or keep the profit.

And then secondly, the person you're selling to is likely getting a loan from a bank. The bank who does a portfolio loan, keeping the loan in-house for land, also lends off of this Fed funds rate or the Wall Street Journal prime rate, which is now at 675. And so our buyers got a rate reduction as land investors and our commercial loans got a rate reduction as land investors. It's a double whammy.

I would love for those rates to continue to come down because the reality is, is what's stopping our market is not that we have like too many sellers per se. It's because we don't have enough buyers. And the only thing that's going to change the buyer equation is to reduce the interest rate at this point.

And so anyways, that's my philosophy is that that's what has to happen for us to have more.

Seth: Do you think immigration reform has had any impact on this? I was talking to somebody in Florida who was saying that a lot of his lower end lots, like he would sell to immigrants and they're gone now. They're deported. The situation has changed, basically. Do you think that's a major consideration here or maybe just on the smaller stuff but not the bigger stuff? Or any thoughts on that?

Neil: I do think it's a consideration. I can only speculate. I can only guess. But the most interesting thing to me is that some of the hardest hit markets in Texas, which I know the most about, of course, being from here, is San Antonio, Corpus Christi, and then the cities kind of near the border. And what do those cities all have in common?

They all have heavy Hispanic populations. And so that is the one thing I will tell you is that the markets that were heavily dependent on Hispanic or Mexican buyers are suffering big time. Yes. Because if you were that nationality and you were here illegally or even legally per se, why would you go out and buy a piece of property? Why would you take that risk of being deported and you own this property that you're never going to see again?

There's also some interesting things where not even like immigration, but did you see that certain nationalities, I forget exactly what it was. I don't want to offend anybody, so I won't name the countries. But certain Middle Eastern countries, other people that we don't like, I guess, as the United States, or that Trump doesn't like is a better way to say it, have been barred from purchasing properties. And then if they do buy properties, that they can be taken back forcefully.

Seth: Really? Oh, I didn't hear that part.

Neil: Yeah, so every single title policy that I've gotten since this was done, this is probably the past three months, you'll see Schedule C, which kind of dictates the requirements that you need to close. The very last line of it says, if you were of any of these nationalities, basically, we're not ensuring that you can buy this property. Because if it gets taken back, the title company is not going to be on the hook for title insurance.

Seth: I wonder how they draw the line with that. Like, what if I'm 3% Iranian or something? Like, how do they even know that?

Neil: Who knows, brother? And heck, dude, and this could be, I could be misinformed. Maybe this is just Texas versus the whole United States. I don't really, you know, again, I'm just, I saw it on my title commitments, thought it was really interesting. So if you really want to check into it, check it out.

Seth: I can totally see a title insurance underwriter putting that in there. I mean, anything they can do to minimize their risk, even if it's not enforceable. It's just like, hey, we put it in there, you know?

Let me tell you something I found interesting. In the past on our January calls that we've gone through, I talk about the U-Haul studies. And so the U-Haul studies is because who knows better, like where people are moving to other than like U-Haul, right? They have the data.

And the interesting thing is that let me just name off the top seven markets and you tell me if you find anything interesting. If you don't, then I'll kind of share the beans. The top seven markets, Texas, Florida, North Carolina, Tennessee, South Carolina, Washington, Arizona, top seven markets people move to.

Neil: I'm not seeing it, but I probably will once you say it. What do they all have in common?

Seth: The most interesting thing with that is these also happen to be some of the states that have taken the biggest price reductions. Yeah. So they're the states that have oversupplied inventory. They're the states that also a majority of land investors, I would say, work. And they're the states that have been hit the hardest by the COVID hangover. That we've been discussing, especially Florida and Texas.

I had this thought earlier when you were talking about how the home sale volume or whatever it was, how the past couple of years has been slower than 08, 09, 10. Back in the Great Recession, the reason was because the bottom fell out of everything. I mean, there's just this huge economic collapse. But as of late, could the reason be because there's just not enough houses to sell? Like, it's not that people don't want them. It's just the houses aren't there. So people can't buy them. Or prices are jacked up way too high and that's why they can't buy them. Like, is the reason different?

Neil: Really, really good question. The Great Recession, and I was too young at the time to know anything that was going on with it. I was still in high school at the time.

But having learned about it after the fact, the part that was so rough on the recession of 08 through 010 was that real estate and mortgages caused it. And so essentially the reason the real estate market crashed is because the mortgages and bad mortgages specifically caused that crash. And so what these mortgage companies did is they failed. And then the ones that survived drastically tightened mortgage requirements. And so when you tighten mortgage requirements, the whole real estate industry falls on its head.

Which is the exact same, kind of the same thing that we're seeing right now from 23 to 26 is that they raised rates, right? The mortgage requirements tightened because now the rates were so much higher, the credit scores increase, things like that.

And so it's interesting, though, the question, it's kind of the chicken and the egg. So your question was, isn't it because there's not enough home sellers for these buyers? Or is it because of the buyers who's really causing it? My philosophy and what I'm seeing most educated people say is that it's a buyer demand issue. It's not a seller supply issue.

And the reason is, is because in most of the markets I'm working in, the supply is lower than like, you know, 2020, especially lower than 2017, lower than 2019, lower than the pre COVID era. And so what does that mean? Well, basically what's happening.

And the reason that the chicken and egg conversation, what came first, right, is because the buyer demand is not there. We know that because the mortgage purchase applications are lower historically than they have been in a long time. They're trending up. So we know that it could come back though.

So if nobody's looking for houses and the sellers are locked in at really, really low mortgage rates, they're just not going to sell because a lot of sellers have the lock-in effect. I don't know if you've heard of that, the lock-in effect, where it's like their mortgage payment is lower than what they could rent anyways. So they just stay put.

So it's like a similar reasons where that buyers can't buy a house, but the reason they can't buy is slightly different. Back in the Great Recession, it was because banks tightened underwriting requirements, whereas now rates are higher, prices are more expensive. It's just harder to do it. But similar issue, I guess, just maybe different causes.

Seth: Correct. Yeah. I mean, the essence of both is that affordability tanked. Yeah. But I would call it more of an affordability real estate recession than like a mortgage crash or real estate crash in like 08, 010.

Neil: The other difference is that in 08, 010, we had a lot higher unemployment. We haven't seen that now.

And so, and that's really the only reason that the market hasn't crashed is sellers are withholding supply and we've kept employment. And so what we need to happen to restart this engine, because that's what I feel like the lad, this hangover have been. We've been like trying to turn the key and it sputters, you know, you see little sputters where it feels like a weekend is really hot and then the next three weeks are really cold and it's like, oh gosh, here it goes again. You just never know when it's going to happen.

I'm hoping that 2026 is just a little bit more consistent and we're starting to get a little bit more sputtering and we're about to start the engine, is my hope.

Seth: Are you seeing many differences across the different markets that you work in or that you are active in? Or I know you mentioned those, the seven top states, like how are the other ones doing? Is it a similar story or?

Neil: Yeah, I mean, as of now, I'm primarily working in Texas, but I can tell you that real estate has always been hyperlocal. And what I mean by that is like county to county, city to city, street to street.

But I believe it's become even more so. And I believe that the successful investors are moving from more of a shotgun approach to a sniper approach and really honing in. So what I mean by that is, because even like, I work like 20 different counties in Northeast Texas. Like that is my market. That is what I know, like the back of my hand and I've been doing it for years.

And in that market, you can go one county over 30 miles east to 30 miles, any direction, and you can be in a drastically different market. And so it's really hard to say state versus state, where should people be looking? Where should people be not looking? Because it's even, it's a more specific conversation than that. It's a county by county, a city by city, a street by street.

And so as far as targeting that end, I know there's several great software programs, land portal included in that, that can help you target some of those different counties. But I would say it's just even, it's even more specific than that. And I think that the land investor of the future moves away from targeting and saying, I do this state and basically just does a handful of counties in every state that they work in and becomes more targeted and more sniped.

Seth: So in terms of like recession talk and all that, are we anywhere near that? What are your thoughts?

Neil: Man, I thought that we might have like a big recession announcement by now. You know, I just kind of envisioned Trump coming on the air, some kind of recession, but we haven't had it. The other interesting thing that happened late Q4, you know, all the government shutdowns and everything, they actually didn't release a lot of like the inflation numbers to where we could even tell some of these things. And so plus also the data that they give always comes back and is edited after the fact.

And that's kind of, we talked about last call. That's why it's so hard to tell if you're in a recession or not. It's because some of the numbers you get are complete BS. And in addition to that, now we're not even running numbers anymore during this government shutdown.

Man, it's just absolute craziness. I will say the one thing I will say, I'm not sure if a recession is coming. I was pretty darn confident on the last call that it would be here soon. I am still fairly confident that it is coming. But what I want to differentiate between is a real estate recession versus an economic recession.

I don't believe a real estate recession is coming because they're two different cycles. I believe a real estate recession has been here for the past three years. So like we're already in the real estate recession and hopefully coming out. So for real estate investors, I am hoping we're at kind of close to the bottom, hoping. Now I always plan, plan for the worst, hope for the best as I advise everybody to. But again, I hope we're coming out of a real estate recession, but I believe that we're going into an economic recession.

And the real big way that economic recessions can affect real estate and come back and influence the two is if people start losing their jobs and can no longer qualify to buy our properties. That's when it starts affecting us, right? So we need to watch unemployment. We need to make sure that that stays strong. We need to watch credit availability, especially for mortgages, loans, bank loans, things like that.

But I will tell you, I mean, what is it during the last 50 years or 75 years, I think there have been only two recessions where real estate values dropped. And over the course of like a five or 10 year hold time, there's never been a time in the last 75 years where real estate was lower 10 years than it was when it started the decade. So historically, real estate can't say always goes up, but historically, if you hold real estate long enough, it will be going up.

Seth: What does the funding and capital environment look like right now for land investors? I know you borrow from banks. You're pretty active in that realm. So has it gotten easier, harder? What are you seeing out there?

Neil: One of the concerns I have for our industry, and even in just the discussions that we've had, is it seems like a lot of funders are starting to move out of the space. And I just believe that capital is becoming a rare asset during this time. And if I had to guess why the funders are getting out, I don't really think it's a secret. It's properties are taking longer to sell. They're much harder to sell. Their assets aren't moving as quickly.

And for funders who have a funding model that acts very much like a bank, it doesn't make sense. It's all about percentage returns and they can no longer get the percentage return that they're looking for. So they either if they want to stay in real estate, they move to a safer asset class like residential or they start doing their own deals. Right. Instead of just being a funder, they do their own deals.

It's a really interesting time because I really believe those who win this year are those who maintain access to funding and maintain access to capital. And it seems like a lot of people are having trouble doing so.

Seth: And speaking of, I know that REtipster actually has a funding program. If somebody did want a deal to review, how would they submit a deal to be reviewed in that manner?

Neil: They can go to retipster.com forward slash funding.

Seth: I think you're on the right track with some funders getting out of it. I never really fully understand all the data and who's actually doing what, but we've seen a higher number of submissions come through for funding, like more than ever before over this past month. And I'm just like, what is going on? Something's going on.

I was talking to another funder about a month or so ago, and he was just expressing to me like how much harder it's gotten for him. Like he used to be able to just kind of like cherry pick what he wanted because he was at the time, one of the only people out there funding deals at all. But it's just a very different game now. Like it's less fun. It's much more cutthroat. He's got to beat the other funder of the game and like say yes to things quick. And it's just different.

And I think it's a similar thing for land flippers who were in this five years ago. It's very different for them as well. It's just a harder business.

Neil: I've heard a lot of people say, treat it like a business. If you're in this to do just like a little side hobby thing in your spare time, you're not really that into it and don't care about it. It's like, well, it's going to be a lot harder for you, I think, if you're not really geared up to handle this business the right way. It's that kind of world now.

I agree. I've been saying this since we started doing this market updates on the podcast. I truly believe the people being eroded by this real estate cycle, this down market is the part-time and the hobbyist land investor. I believe that that is the people being eroded the most by this, the people who are only trying to do one to two to three deals a year. I believe that this is a very hard time to do that. Not that it's impossible, not that you cannot do it. Yet the people at the top are growing their businesses. They're taking market share.

And candidly, it's just, it's a market cycle. But if we really are at the bottom right now, if my prediction is correct, and we are at the bottom of a real estate cycle right now, there's no better time to get into this game than now.

Seth: Well, given everything that you've shared and seen about the current market conditions, are there any strategies that you think are working really well right now for land investors? Like what should people be focused on?

Neil: Yeah, let me go. So I put together a few things for us to go through, a few themes of how to have a successful business in 2026. I thought that this might be helpful to go through. These are things in my business that I'm implementing that I think everybody could remember and very easily implement in their businesses.

So number one, focus on utility and usability. And that goes back to the very first property that we talked about at the very beginning of this podcast, which is it didn't have water access. I knew that it didn't have water access. I should have never done the deal. And so because what you need to realize is that the value is not just in the dirt. The value is in what can be done with the dirt.

And I failed to realize that on that property. And then I went back and did these other deals that I kind of talked about and made it right. Right. And so the values and what can be done with it, not what it currently is. Due diligence is more important than ever. And having a due diligence process that you're comfortable with is more important than ever.

And the last thing I'll say on that is knowing the highest and best use of a property and knowing some of these value add strategies that have now become commonplace in land investing circles. So for instance, most land investors start off the buy low, sell high. Right and that's you know you start off at low price buy for 10 sell for 20, 20, 40, 50, 100 etc, you try to go up from there and that's one way to do things. Yeah.

Also, you look at bolting on. Here's second strategy, seller finance. Right? People killing it big at that who know how to do it. You can go and subdivide and entitle, number three, subdivide and entitle properties. You can also, number four, go vertical and put manufactured houses on there.

Which, by the way, we've got several videos coming out on The Real Deal with Neil about manufactured housing, why I believe that is the next subdivide, how much the subdivide has blown up the land investing industry. I believe that manufactured housing and placing them on lots is really like the next big thing for land investors. And I'm going all into that. I even got my retailer's license in Texas. So reach out if you need a house.

So anyways, I feel like that's the next big thing.

Seth: Yeah, it's hard to disagree with you on that. I interviewed Brent Bowers back in episode 247, and we talked specifically about that. And that episode blew up. Like people just ate it up. And even I like loved it. It was just, it just seems like fun. Like definitely more work than flipping land, but like to actually get a house and get it on there and see the value. I don't know. There's something about it. I feel like it's going to click for a lot of people.

And I don't know if there will come a day where that then becomes saturated. Kind of makes me sad to think of that already. But part of me thinks there might be some guardrails just because it's harder to do. It's just more sophisticated. You know, you got to really kind of want it and put the additional investment into it. And there's more moving pieces and things that can go wrong. So it'll be interesting to see where that goes. But I'm also super interested in that. See where that goes.

Neil: The biggest challenges that I'm experiencing with it are you need diversified capital sources. And for land investors not used to putting a lot of money in your properties, you know, you're going to go from maybe like $5,000 to $10,000 worth of surveys, clearing, water meters, etc. Now, all of a sudden, you got like $125,000 into it. And so not only do you have to fund the purchase price of the property, now you got to fund the mobile home too. And so your capital stack and your funding sources become more critical than ever.

And then secondly, you've got to learn how to run residential comps, right? And that was a concern. I was talking to somebody a few weeks ago. It's like, well, how do I run comps on manufactured houses? Well, you got to run comps on houses, not land, right? Because it's a finished product that you're selling.

But the advantage with a manufactured housing model is that it's all done through third parties. And so if you go to a retailer, you order the home through the retailer, you bring your own capital, or maybe they have capital for you to use. And then an installer works with the retailer to get it installed. And then you basically are just a manager, right? You're just managing everything and you don't even have to manage the subs because the retailer does everything for you. It's not as hard as you think it is. As long as you have the money to do it, it's not as hard as you think it is.

Seth: And on the money part of it, I mean, am I correct that you don't just go get a bank loan for this, right? Like you got to have your own cash or are there banks that finance this kind of thing short term?

Neil: You could. So I went to the bank that I have a really good relationship with and who funds 85% of my deals. So we've done probably 75 deals together over the past few years. And I just asked them, hey, is this something you'd be interested in? Because they already loan on my used mobile homes.

And they said, yeah, we could do it. And they were willing to fund 75% of the project. So as long as I put 25% down on land and 25% down on the construction, they were good with it. So yeah, so I mean, that was the first bank I talked to.

The other cool thing is that there are companies out there, 21st Mortgage, Triad, just to name a few, who do with like personal property. And so they will also do loans for investors too. And so that's another way to fund it if you ever had to. It's just more expensive. You know, instead of paying like eight to 10%, maybe paying 11, 12%. Most people in the game with manufactured houses use private loans, but I'm not against using a bank. I already use them anyways.

Seth: Yeah. Are you a licensed mobile home dealer?

Neil: I am. I am a licensed mobile home dealer as of December in Texas. So my objective this year is to place at least 12, if not 15 homes. I've already got six on the books so far that I'm working on placing out in the next about 60 days. And yeah, I'm going full tail in the bottle because for me, the reason I'm doing this, I went to the mastermind in Wyoming that you and Dave put on last year, saw Denise talking about it. And then I went to another mastermind that I'm a part of, saw somebody else talking about it. And I was like, God, like you trying to tell me something, you know, you're trying to tell me something or what, you know, it doubles my profit.

And so what I'm doing is I'm going out, I'm for instance, buying five and a half acres, making five one-acre lots off of road frontage, installing utilities, putting houses out there. I'll make $250,000 from the subdivide itself, and then I'll make $250,000 from adding the mobile homes. And so for me, I'm looking at it as a way to double my profit on my subdivides.

And then secondly, I'm looking at it as a way to go out and now be able to flip one-acre lots where I can pay more. So subdivision used to be the only strategy where you could buy properties for market value, if you know what I mean? Like you could pay 100% of current market value on MLS, if not 120, and still inflate the value and sell it. Well, now with manufactured houses, you can do the exact same thing. I can go out and buy one acre lots for 90 to 100% of current market value and still make 40 to 50,000 net at the end of the day.

Seth: So if everybody starts getting into that, how much harder do you think that will make it for the land investors who are trying to offer 40% on the dollar? Or is it just two different worlds? Like those kinds of offers are still fine for certain lots, but not the mobile home ones?

Neil: I think you're going to find it's two different worlds. And here's the thing is that the one acre lots, the one acre buildable lots, people are already building houses on those. Like they'll not even do a manufactured house, but builders are going after those. Residential wholesalers are going after those, residential investors.

And so I do think it's two different markets because just like with subdivisant entitlements, not every single property is right for that. And this is kind of going into my next item, which is fulfill the demand, don't create it.

I've been doing a lot of subdivide consults with people who have reached out due to our podcast and stuff that we've done where they want to know, how do I subdivide properties in Texas? So we sit down, we go through properties. And the main thing that I'm trying to tell everybody is that you don't just subdivide just to subdivide. Because there's several times that we've tried to subdivide properties and it doesn't work because there's no demand for the product that you're creating.

And so for said divides, just like manufactured houses, you've got to make sure that the comps are there to support your after repair value or what you're trying to make it into. And so all that we're trying to do is like land investors or mobile home investors or whatever the heck you want to call us now, is we're trying to fulfill the demand. We're not trying to create it.

We're land investor is R&D, rip off and duplicate, which is exactly what you should be doing when you listen to all these podcasts that Seth puts together. I mean, he's got what, 260 episodes now, 260 hours of content. Rip off and duplicate these investors. Go out and do it. Don't try to recreate the wheel.

Seth: In a tougher market like this, what is it that you think that separates investors who are thriving from those who are struggling?

Neil: I would say another theme is they do more with less. They embrace AI empowered solutions. So like, even like me, I'm AI stupid. I'll be the first to admit it, but that doesn't stop me from using the land portal. That doesn't stop me from Stride. It doesn't stop me from all these other AI empowered technologies that like Seth has put together and that these other companies have put together. Like if you're not utilizing some kind of AI technology, you will get left behind. Doesn't mean that you know how to implement it yourself, but you need to be using something to empower yourself not to have all the extra hurdle.

Doing more with less also means top grading talent. You've got to make sure that your talent on your team, like you don't have to give them orders. They're not just order takers. They need to be able to go out and do your business without you. They need to be able to take commands, but they also need to think for themselves and analyzing your marketing.

You got to be able to do more with less. You know, the days of shotgunning the whole country with a hundred or 200,000 mailers a month, it's going to become pretty hard. And I think it already is. Now there, there are big guys who do that more power to you yet. I believe the land investor of the future takes more of a sniper based approach and really hones in on a small market area and becomes the hyper local guy who really kills in one area.

Seth: Yeah. Was there anything else on your list of things to thrive in 2026. Anything else?

Neil: Yeah. So number four is do things others aren't willing to do. And so whether that looks like doing messy deals, for instance, maybe this is the next big thing. I know Ajay's dove into this headfirst, messy title, airship issues, tax liens. Could that be the next frontier? One person goes manufactured houses, the other person goes messy title, yet to be seen, we'll see.

But also go vertical, do entitlements. Many people don't realize, or maybe they do with subdivisions, that there's another level of subdivisions that most people aren't doing. Most people do these exempt subdivides, which is really what's blown up in the community. But a lot of people don't realize that you can go and get your accounting approvals and do smaller lots, have more marketable lots and do that all over the nation just by getting your approvals. You do things again that people aren't willing to do.

Last thing I'll say on that is salesmanship. I believe that in the old days, people used to think 10 years ago, I can just send emails. I can just sit behind a computer. I can do my marketing. I can make a hundred thousand dollars a year and I can never talk to a soul. And I think the days of that are over. There's too much competition. There's too many people trying to do this. And you've got to work your leads. You've got to talk to people and you've got to develop some level of competency and salesmanship.

Because if you're not talking to them, then they're going to go to somebody else they talk to if you're just hiding behind an email all day.

So anyway, that wraps it up. Do things others aren't willing to do.

Seth: Always great to talk with you, Neil. If people want to reach out to you, any more insights, anything like that, is there any place you would send them?

Neil: Yeah. I mean, I right now I just have my real estate agent facing website, theclemgroup.com. That's the best way to get ahold of me. Eventually here over the next few months, I'll be putting up a manufactured housing website and some different other ways to get ahold of me. But through right now, that's the best way to reach me, theclemgroup.com. And then you can send me a message or send me an email from there. So appreciate the time. Happy to be here and hope you got a lot out of this.

Seth: Awesome. Thanks everybody for tuning in today. Neil, again, thanks for being here and we will talk to y'all in the next episode.