Boring Land Deals Are Winning (Podcast Ep#171)
Drew Haney shares data-driven insights from nearly 1,000 land deals funded through Rooster Capital, revealing that "boring" rural recreational lots in the $10K-$70K purchase price range significantly outperform luxury infill lots, with better returns and faster hold times. He emphasizes the importance of psychological factors alongside spreadsheet analysis and warns against pursuing higher-priced deals for excitement rather than sound business fundamentals.
Summary
Drew Haney, who has been involved in approximately 1,000 land deals over six years as both an operator and funder through Rooster Capital, discusses key findings from analyzing his company's deal data using Claude. He began in land investing in 2020 by purchasing cheap desert parcels, then partnered to scale to 35 sales in six months. Rooster Capital grew organically from funding a single deal and has since funded deals alongside his personal flipping business and subdivision projects.
The podcast hosts explore how Haney's data analysis challenged conventional wisdom in land investing. When preparing to launch a fund, Haney discovered he had been accidentally misrepresenting returns to money partners by using unweighted blended IRR calculations, where small deals with high percentage returns were counted equally to larger deals with lower percentages. This realization prompted deeper data analysis.
Haney's key finding is that the optimal purchase price range is $10K-$70K for properties that are 30 minutes to two hours outside cities, containing 2-20 acres of rural recreational land. These properties typically have market values of $20K-$140K. This "boring" sweet spot significantly outperforms luxury infill lots in the $100K+ range, which Haney describes as analogous to trading leveraged commodities—excellent in bull markets but with severely reduced buyer pools in bear/plateau markets. He notes that even well-known, successful operators pursuing six-figure deals have advantages like economies of scale, cheap capital, and deal volume that most operators lack.
Regarding seasonality, data shows August and September are the worst months to enter positions because closings typically occur in October, followed by Thanksgiving and Christmas—poor selling seasons. May through June is optimal for entering positions due to tax refunds and people's desire to acquire recreational property. The best time to sell is spring and early summer.
Haney discusses seller motivations, noting that most sellers have owned properties long-term, live far away, and don't care about them. He reconciled initial ethical concerns about buying discounted property by recognizing that win-win scenarios exist—sellers are often relieved to eliminate a headache for less money, similar to his personal experience selling a car at half-value or giving away furniture to avoid storage costs.
On deal funding, Haney reports 80% of Rooster Capital's deal flow comes from referrals and operator satisfaction, with 20% from podcasts and events. The average purchase price has crept up from $33K six months ago due to some larger subdivision projects, but the core focus remains five-figure purchases exiting at high five-figures.
Haney emphasizes that successful investing requires analyzing beyond spreadsheets to include psychological factors and mental bandwidth. He shares that despite high spreadsheet returns from $40K monthly hard money payments in the past, the stress and opportunity cost made it inferior long-term. With approximately 25 losses out of 1,000 deals (2.5% loss rate) and only about 5 significant losses, Rooster Capital's model compares favorably to commodity trading (75% loss rate).
The episode concludes with advice to avoid over-analyzing small data samples, to find peer support groups for the psychological challenges of entrepreneurship, and to refine systems during slower market periods. Rooster Capital offers free bi-weekly office hours for submitted operators covering deals, marketing, and life topics.
About this episode
<p>After being involved in nearly 1,000 land deals, Drew Haney has enough data to start seeing some pretty clear patterns.In this episode, Jessey and Kevin sit down with Drew to talk through what the numbers are actually showing inside Rooster Capital, including which deals have produced the strongest returns, which ones tend to sit the longest, and why chasing bigger spreads is not always the better move.Drew shares why the sweet spot in their data has been smaller rural and recreational properties, why six-figure infill lots have been much harder to move, and how hold time can matter just as much as the profit on paper.They also get into seasonality, why August and September have historically been tougher months to buy, the danger of drawing conclusions from tiny marketing samples, and why operators should think beyond spreadsheets when evaluating risk, capital, and opportunity.What you’ll learn on this episode:</p><p>• What nearly 1,000 land deals reveal about the best-performing buy box• Why bigger deals can create more risk, longer hold times, and more mental overhead• What Drew’s data shows about seasonality and when deals tend to perform best• Why small sample sizes can lead investors to make the wrong marketing decisions Chapters00:00 Intro02:59 Drew’s path from land flipping to Rooster Capital05:17 What the data actually says after nearly 1,000 deals07:23 Why six-figure infill lots have struggled08:04 The buy box producing the best returns13:10 Why bigger deals are not always better19:14 Risk, hold time, and mental bandwidth22:49 What the data says about seasonality25:16 Why small marketing samples can mislead you28:38 What Drew looks for in funding partners30:02 Looking beyond the spreadsheet31:48 The reality of losses across nearly 1,000 dealsConnect with Drew Haney:Rooster Capital: https://roostercapital.landEmail: [email protected] to learn more about Pebble and what we’re seeing across land investor direct mail? Hop on a call with us at www.pebblerei.com/demo</p>
Key Insights
- Drew Haney discovered he was accidentally misrepresenting returns to money partners by equally weighting high-percentage returns on small deals with low-percentage returns on large deals, demonstrating how easy it is to lie with numbers even unintentionally.
- Luxury infill lots in the $100K+ range perform poorly in bear/plateau markets because the buyer pool contracts to approximately 1% of bull market levels and becomes extremely cost-sensitive, making them behave like leveraged commodity trades.
- The $10K-$70K purchase price range for rural recreational properties 30 minutes to two hours from cities generated the best absolute returns and lowest hold times across Rooster Capital's nearly 1,000-deal portfolio.
- August and September are the worst months to purchase land because deal closings occur in October, followed immediately by Thanksgiving and Christmas—two major selling season dead zones.
- May through June emerged as the optimal time to enter land positions due to two factors: tax refunds enabling down payments on owner-financed deals and seasonal demand for recreational property acquisition.
- Drew Haney's analysis revealed that most land sellers are long-term owners living far away who don't care about their properties, making them willing to accept discounts in exchange for eliminating a headache.
- Rooster Capital's portfolio shows approximately 2.5% loss rate (25 out of 1,000 deals with only 5 significant losses), which substantially outperforms commodity trading where Haney previously experienced a 75% loss rate.
- Haney argued that analyzing deals purely on spreadsheets captures only one-third of the decision picture; ignoring psychological factors and mental bandwidth costs can make expensive capital appear cheaper than it actually is in the long run.
Topics
Transcript
Hey, how's it going? Welcome to the Land Investing Business Secrets Podcast. I've got a return guest here, Drew Haney. I also got my co-founder, Kevin, on this episode here with us. As we talk to Drew about all the things that he's learned, and some sort of, you know, I would, maybe it's contrarian, maybe it's not contrarian, but things that he's learned in the data, and he's been really digging into the data using Claude and figuring out things, because he's done a lot of deals up to this date as a funder. So I think this is really insightful. I think this will, you know, for some of you guys, this might change the direction of, you…
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