A recession could empty the pockets of some prospective buyers and simply give other buyers cold feet. Due to the fund’s structure, our ability to provide investor returns is largely independent of how quickly we’re selling land or whether we’re selling for top dollar. Regardless, it’s worth noting that sales are still strong.
In a slowing economy, there is reduced demand across all or most sectors, including real estate. This is extremely good news for us on the buy side. Getting our purchase offers accepted has been a major challenge ever since demand for rural land skyrocketed during the pandemic. We would love for some of the wealthy “buy and hold” investors we compete with to curtail their buying activity so that we can take on more projects.
Lastly, recessions provide us with an opportunity to generate an even stronger track record and thus attract more investor capital going forward.
The bottom line:
A recession would bring a few pros and cons for us, but we have confidence in both our model and your collateral and don’t see it impacting your investment.