Baufirma mit 200 Mio. Umsatz: Woher noch Bauland nehmen?

0:00I sell new construction homes to first-time homebuyers. Awesome. >> We do 200 million in revenue. Amazing. We would like to be at 300. And land acquisition, the constraint of our industry, is what's stopping us. So, you getting land has been the issue? Yes. Okay. So, where do you currently where do you source land deals now?

0:24Um Is it the permitting or just like Okay, so it's it's mostly just getting farmers to give up their land? Yeah, well, anyone who owns land. Sure, but they just have a lot of it. Word. Um so, what's the current strategy that you use to get farmers to give up their land? Um find out who they are. Okay. >> do do a lot of digging to find out you who has land available and calling them. Are you buying lists? [clears throat] No, there's not. I mean, it's it's readily available in that MLS, like we have access to information. Yeah.

0:56>> So, the issue is there's just no more names to call? It's not about the lead of land, it's getting it from the point of acquiring it ready to build on. So, is it permitting? It's the um development of the raw land to finished lot. Could be anywhere from 2 to 10 years depending on the project. Super chill. And [snorts] we don't want to put our cash just rotting out in the, you know, 10-year timeline with no return. So, we like to purchase it from the a developer that does it for us. So, we can find the leads and find the land, but we don't have the people to develop it to get it to us. Well, your size, have you considered either one pillaging the um best developers talent bucket A, bucket B, just I mean, your your size you can just do the acquisition.

1:51Become the developer yourself, you mean? Like yeah, we'll just buy one. Yeah, buy one so you can just basically vertically integrate what you're trying to build. Yeah, we should probably do that. >> [laughter] >> Well, you have the capital to do it. I'm sure you have really good lending relationships anyways, and those businesses, I don't know what kind of margins those run, but like I'm sure like I would look at who are like my first steps would be like if I was like translated in, I'd be like, "Okay, who did we buy land that was developed from over the last 10 years?"

2:20And I would get all of those names, and then I would be smiling dying {slash} trying to fly out or fly them out to say like some of those guys are going to be older, some of those guys aren't going to give a [ __ ] anymore, and they've got a good team or whatever, and I'd be like, "Great, like how can we make something work here?" Mhm. Um and I'd be looking at doing a deal that way cuz it depends obviously I mean, at your size it's buy or build, right? And so, um it really depends on how entrenched the inroads are and how uh from like the zoning and all that [ __ ] Um how relationship dependent it is um at the levels that you're looking at.

2:54I'll give you a completely different example, but if you think about like OpenAI and some of the new AI stuff that's going on there. One of the strategies that's becoming more prevalent is rather than trying buy these AI companies that let's say they've got 30 geniuses that work there and trying to buy that company for a billion dollars, they just look at the top 20 of the 30 people uh who don't have who have maybe they got diluted because of the way the VCs ran the deal or whatever, and then they just say, "Hey, I'll give you" and you've seen these like hundred million dollar signing bonuses probably like flying around on Instagram. It's And it sounds absurd, but it actually is more efficient to give one person or the four key people in the business a hundred million dollars than buy the business for four billion. Mhm. So, it's just a pure allocation of capital play. And so, from a buy versus build, if you can strip the talent out and they can keep the relationships and then you can rebuild it, that'll be the most efficient way to do it. But the and that again, the the test is is that That would be my hypothesis, like how ingrained are those inroads? If they're super entrenched and very difficult to like transport those relationships, then I would be looking at like I'll just buy the whole the whole co.

4:00Older guys often times will actually take super long earnout periods cuz it just becomes an annuity for them. Mhm. So, sometimes they're willing to take like 15-year seller financing just to know that they're going to get paid and you collateralize it against the business. And you already have assets and so do they. And so, that can actually be a really it's kind of a win-win structure for many of them. Yeah. Um just as a consideration, but like that's probably like I would probably like you're at the size now rather than you say like here's how I'd build a land development business. That's probably how I'd think about it.

4:26>> Mhm. I think we have just been avoiding it because it's a distraction from home building. You know, it's like a completely different business. I think that every business at a large enough scale becomes a business of businesses. >> Okay. So, like Amazon is not just like a business, it's like there's AWS and there's the white label business and then there's the the logistics and distribution, like there's so many elements, there's the the video and the media side, there's so many different elements of Amazon, right? Um that you might be at the stage where it might make sense. So, it does come back to the goals, like if you know that you're if Do you feel confident that you're just stay at 200 million or are you going to grow at 20% if nothing happens or like what's the current growth rate?

5:03Are you stuck there? We've been stuck. Okay. Yeah. Well, then you probably do need to like if that is the constraint of the business is like we build on every piece of land that we can get, well, it's like well, that's the constraint. Right. So, then that So, then I think about So, the the the quantified version of what a constraint is, it's the highest return. It is the it is the allocation of resources that yields you the highest return. Mhm. And so, if you focus on like So, fundamentally, it's like why would we not want to do that? It's like, "Well, this is the place where we would get the highest return in the business." And the nice thing with that is that constraints often times are not like 10, 20, 30% improvements, they can be like order of magnitude improvements. All of a sudden you can go to a billion because you opened up five times the land. Mhm.

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