Strategic Subdividing: Chuck Dreison Talks Funding, Experience, and Philosophy

The REtipster Podcast | Real Estate Investing

183: I met Chuck Dreison this past year when I was looking for members of our community with experience subdividing land in different markets around the country.
(Show Notes: REtipster.com/183)

Chuck was one of the few people who raised his hand, and since then, Chuck and I have spent a fair amount of time together as he’s shown me the ropes of how minor land divisions work in his market (which has plenty of differences from how I’ve seen it work in other markets around the US).

One of the biggest things I’ve learned from job-shadowing subdividers around the country is that the expertise a person develops with subdividing in one state doesn’t always transfer to the next state or even the next county over.

I wanted to get Chuck on the podcast to talk more about his story and how his subdividing business works. I also wanted to talk about partnering with other land investors, either as the operator, doing the hands-on work, or as a funder providing the capital.

It’s a topic that goes hand-in-hand with subdividing in many ways because many subdivides are naturally bigger deals that require much more money to acquire and do the work of subdividing. As I’ve been developing a solid framework for how I fund land deals for other land investors, Chuck has given me some great feedback about what he’s seen in the industry and what he wants to see from the operator’s side.

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1. Strategic Subdividing: Chuck Dreison Talks Funding, Experience, and Philosophy (00:00:00)

2. Introduction to Subdividing with Chuck Dyson (00:00:16)

3. Chuck's Career Journey: Marine to Land Investing (00:02:29)

4. Transition to Subdividing and Expertise Development (00:03:22)

5. Initial Subdivision Experience and Learning Process (00:04:34)

6. Importance of Surveyors in Subdividing Projects (00:04:54)

7. Variation in Subdivision Timelines and Hold Periods (00:07:05)

8. Geographic Scope of Chuck's Land Business (00:07:46)

9. Managing Remote Subdividing Projects (00:08:14)

10. Focus on Subdividing in Arizona (00:09:52)

11. Typical Costs and Timeline of a Subdivision Deal (00:12:00)

12. Addressing Water Access in Subdividing Projects (00:17:08)

13. Focus on Minor Land Divisions and Risk Mitigation (00:19:02)

14. Balancing Zoning, CCRs, and Topography in Subdividing (00:20:40)

15. Determining Demand and Market Research for Child Parcels (00:24:15)

16. Acquisition and Disposition Costs in Subdividing (00:25:24)

17. Factors Leading to Extended Subdivision Timelines (00:25:48)

18. Financing Strategies for Subdividing Projects (00:27:58)

19. Evolution of Chuck's Investment Fund Structure (00:29:27)

20. LLC Structure and Decision-Making (00:30:01)

21. Transition to a Unified Fund (00:31:27)

22. Importance of Communication with Investors (00:32:56)

23. Preferred Return and Fund Performance (00:34:33)

24. Management Fees and Additional Costs (00:37:11)

25. Autonomy and Decision-Making as Fund Manager (00:39:51)

26. Finding Trustworthy Investment Opportunities (00:44:13)

27. Researching and Vetting Investment Operators (00:46:46)

28. Comparing Land Fund with Conventional Real Estate Funds (00:51:21)

29. Importance of Compliance and Licensure in Lending (00:53:00)

30. Fear of Failure and Lessons Learned (00:55:53)

31. Source of Pride: Family (00:57:01)

32. Hypothetical Scenario with a Windfall (00:58:03)

33. Privilege of Real Estate Ownership and Impact on Families (00:59:26)

34. Connecting with Chuck Dryson at MeridianREI (01:00:31)