Land Investors Cut Staff, Pivot to Subdivides as Margins Shrink

Denniston's caution on AI is worth repeating. He calls it an enhancement, not a replacement, for good people. He has found ChatGPT and tools like it have trouble adding up numbers, so somebody still has to verify the zoning answer before acting on it.

When Williams asked what nobody talks about honestly enough, Clements went first: how many people went from making seven figures to losing money very quickly over the last few years, and how many are not in business at all anymore. He said subdivides get a lot of glory and people do not see the risk, the time, and the staff headache underneath. He said the same about running a high-volume seller finance operation.

His warning on property quality was the sharpest thing in the conversation. There is no plan B with land. You cannot rent it. You cannot do anything with it other than sell it. If you are not buying the cream of the crop, or if you would not want to own the property yourself, be very careful buying it for somebody else. In Dallas Fort Worth, he is watching buyers get picky enough that a slightly irregular lot instead of a rectangle sits on market twice as many days as it used to.

Denniston layered on the leverage problem. As the tide went out, plenty of over-levered investors got left stranded on the beach. He put his financial advisor hat on and said everything runs in cycles. A recession will happen again. When asset values get the crap kicked out of them, there will be supply to buy. He just has no idea whether that is six months or 10 years away. Williams' own version of that was 2021, when he bought 350 lots at a Mohave County tax deed auction with roughly 10,000 properties for sale and 3,500 he was interested in. That has not resurfaced since.

Denniston was the first to say past performance does not guarantee future results, and that some of his record week is luck.

The tension between sharing and holding back runs under the entire conversation. Clements talked about how hard it is to share real numbers without sounding like he is bragging. Denniston said the same thing about the six-high-sixes and low-seven-figure deals they have done. Denniston said he finds himself holding back the very specific stuff now, like the exact letter they use, and he does not talk about where he buys at tax lien and tax deed auctions because the supply there is genuinely limited and talking about it just creates competition.

Williams said he wrestles with the abundance mentality too, not because he does not believe in it, but because a lot of the people preaching it have a financial incentive for him to believe supply is infinite when it is not. Clements' line settled it: do not give away the thing you know would kill your business. That is not scarcity thinking, that is common sense.

Denniston closed with something that would not have been scripted. He had just gotten back from Yosemite with six land investors, talking life and struggles and joys. He made the point that it can be lonely out there when you are trying to figure out your next step. Clements' line for the whole network was different voices, all one community.