Drew Haney: Land Funding vs Operating (Shocking Truth)

OnlyLandFans Podcast Ep. 92

Think becoming a land funder is the ultimate graduation from being an operator? Drew Haney, who's completed over 640 deals across 35 states, has a different perspective to share.

"I want to destroy that construct," Drew says emphatically. "People believe there's this hierarchy where you start as a flipper and then you graduate to a funder. It's not better being a funder, it's just different."

The Real Numbers Behind Land Funding

Drawing from his extensive experience, Drew shares some eye-opening statistics:

Average buy price: $33,000
Average sell price: $68,000
Current success rate: 5 deals under contract out of 50 parcels (10%)
Average ROI for backup funders: 14.9% per deal
Average days on market: 135 days
Only 3 losses out of 640+ deals

The Hidden Challenges of Funding

While funding might look appealing from the outside, Drew reveals some surprising challenges:

Weekend work is common - needing to source $200K on a Sunday isn't unusual
Having to fire high-maintenance investors who don't understand the business model
Managing relationships with both operators and money sources
Dealing with market slowdowns that can cut income by 75% (when combining slower turnover and discounted sales)

What Makes a Good Operator-Funder Relationship?

Drew emphasizes that reputation and relationship become the real collateral. He looks for operators who:

Are full-time in the business
Have a strong reputation in the industry
Have an established track record
Understand the fundamentals of deal structuring

The Surprising Truth About Deal Preferences

"The sexy thing right now is entitlements and minor subdivides," Drew notes. "But from a funder's perspective, the best deals are the super boring flips. Buy for 30, sell for 60. They have the least amount of risk, the lowest days on market, and they have the same returns as a minor subdivide."

Key Lessons for Aspiring Funders

Start with your own money first
Only do arbitrage funding when you run out of personal capital
Develop an abnormal detachment from money and results
Understand macroeconomics and market cycles
Be prepared for periods when deals take twice as long to sell

For Those Seeking Funding

Drew shares what he wishes operators knew before approaching funders:

Have a proper education in land investing
Don't expect funders to do your due diligence
Have a working machine that just needs capital
Understand what makes a viable deal (hint: buying for 300K and listing at 400K isn't it)

Want to dive deeper into Drew's insights about land funding? Watch the full interview for more detailed strategies and practical advice about navigating the land funding landscape.

What's your take on the operator vs. funder dynamic? Share your thoughts below, and don't forget to check out the full episode for more insights from Drew's journey.

Enjoy the show!

Drew is a seasoned real estate investor with a proven track record of success. After scaling his land-flipping company to 7 figures, he founded Rooster Capital, a land funding company that provides capital for 15-20 flips per month. Drew is also involved in numerous minor land subdivisions and entitlements.

With over 500 deals completed across 35 states, Drew has a wealth of experience in the land investment industry. He is passionate about partnering with solid operators and money partners to create successful real estate ventures.

For more information on Drew and to explore his other ventures, connect with him through these platforms:

Raising Capital / Potentially land flippers with IRA money to invest