Inside Texas Land Development: Finding Raw Land, Raising Capital, and Building Subdivisions

Jody Boyd (00:00)
Well, few things on that. think, you know, money makes the world go round. ⁓ You know, having the right capital and patient capital is key to getting deals done. One of the things that’s an issue when you do the front end like this is the cost of entry is outrageous. You know, you have to close land. It takes you a year to two years to build a subdivision before you can actually start selling products. So your investors have to know going in that, this isn’t a, this isn’t two quarters.

Michelle Kesil (01:57)
Hey everybody, welcome to the Real Estate Pros podcast. I’m your host, Michelle Kesil. Today I’m joined by someone I’m looking forward to chatting with, Jody Boyd, who is a single family real estate developer in the Texas area. So excited to have you here today, Jody.

Jody Boyd (02:12)
Thank you so much. Looking forward to it, Michelle.

Michelle Kesil (02:14)
Great, let’s dive in. First off, for those not yet familiar with you and your work, can you share what your main focus is?

Jody Boyd (02:22)
You bet. So we’re what we call horizontal developers. We find raw land and title and build subdivisions that we then sell finished lots to builders, either production builders or custom home builders as well.

Michelle Kesil (02:34)
Awesome. And so what does the type of projects you work on look like?

Jody Boyd (02:39)
Yeah, so we’re pretty varied. would say early on in my career, I was more on the high end custom home side of things. know, South Lake, Colleyville, Keller area here in North Texas, kind of on the west side of the DFW Metroplex, the airport rather. We changed that focus in early 2020. You know, didn’t, I guess at the time I was concerned about how many million and half to two million and a half buyers there are out there.

Turns out I was really wrong. There’s a ton of out there as a matter of fact. So we kind of bifurcated our business a little bit to focus on more entry level product. We’ve got a couple of deals in Decatur, Texas, which is just a little bit further out, kind of on that next ring of growth for the Metroplex and did some 50 foot product that we’re selling to DR Horton, talking to your, you know, your…

prototypical Wall Street builder, is what we call them, production. You know, they’re doing 50 foot entry level stuff in that, that low 300 to mid 300 price point. So we do a little bit of that. And then we do, you know, also we have some million five custom home lots in South Lake up against Lake, Grapevine and core of engineer properties. So really kind of both sides of, and we also have some, you know, mid level 500,000, $600,000 price point stuff that we do in Argyle ISP.

and some one acre stuff. So really anything from 50 foot product to one acre lots is pretty much the full gamut.

Michelle Kesil (04:01)
Awesome. And what do you feel are some of the main keys that allow your business to be able to grow and run successfully?

Jody Boyd (04:56)
Well, few things on that. think, you know, money makes the world go round. ⁓ You know, having the right capital and patient capital is key to getting deals done. One of the things that’s an issue when you do the front end like this is the cost of entry is outrageous. You know, you have to close land. It takes you a year to two years to build a subdivision before you can actually start selling products. So your investors have to know going in that, this isn’t a, this isn’t two quarters.

You get your money back and you make 15%. You know, this is

going to be a lot longer lead time in order to get to a profitability standpoint. So I think that’s probably the major headwind.

from a real estate development standpoint is cost of entry and then time to deliver. Those two things are key. know, over the past year and a half, we brought on a couple of experienced folks that are home builders and project managers to help us mitigate some of that lead time, those lead time issues. But at the end of the day, you know, you got to find millions and millions of dollars in equity upfront to go close a project with the bank, you know, for debt financing on that. And that, you know, that money wants a return.

and you’ve got to be mindful of how you manage a project in order to get to that as quick as possible.

Michelle Kesil (06:04)
And where do you source the deals for the projects that you work on?

Jody Boyd (06:10)
Well, most of the stuff is, you know, I’m out there ⁓ pounding the pavement. ⁓ you know, just have a natural curiosity and, and, you know, I think a lot of that, I’m a believer. So a lot of that I think is led, led from by my faith. I’ll drive around and, know, all of a sudden I’ll roll across a piece of property and I’ll go, Hey man, that might be a really good deal. I get that kind of that sense that maybe something’s there. You know, most of my career, the deals that I’ve done have been because I’ve stopped the truck. I’ve gotten out and I’ve

up and knocked a door. You know, we bought deals that are listed obviously, it would be crazy not to, but a good portion, I’d say a majority of the really outstanding projects that we’ve done over the past 25 years have been because I stopped, had a sense, and went and actually knocked a door and engaged the landowner and, you know, got to understand their wants and desires and how we might be a partner with them to further their legacy from the land that they own.

Michelle Kesil (07:04)
And is there like a specific criteria for the types of developments that you work on?

Jody Boyd (07:10)
Well, mean, facilities, right? Utilities is the most important thing. You have to have road access. Typically you have to have water and sewer, the water and sewer, you know, water is a really big deal. And I say a big deal, problematic, especially on the west side of the Metroplex. You start getting out into Western Tarrant County, Wise County, Jacksboro, Jack County. know, water is pretty scarce out there. You know, there’s a lot of really good deals that I think are kind of in that next

ring of growth for the Metroplex that don’t have water. So that’s one of the key components when you’re looking at a land deal is water. Also access to infrastructure roads. I can you get to it? Can you drive down the street and see it? I think that’s an important component as well. You know, the old adage location, location, location. mean, that’s key for real estate development as well. Good schools. Schools has become less of a priority over the last 25 years as it was initially.

early in my career. And I think that’s the schools here in Texas have gotten better at educating the kids and just run out of space. There’s not very many lots in that inter-core available for development. So you kind of got to get out to the next ring, but schools obviously play a big point. So yeah, think those, for any real estate deal, those are the key factors. The location, the access to utilities, infrastructure is important.

Michelle Kesil (08:26)
And are you typically partnering with investors on these projects?

Jody Boyd (08:30)
yeah, yeah, almost every project we have investors on every project.

Part of that is strategy, right? Because the cost of entry is so high, you know, the old adage, Robin Peter to pay Paul. Well, you know, we do have a successful deal. We get paid on it. Well, to do another deal, you pretty much got to take all the money you made on that first one to put into the next one if you’re going to do it by yourself. So we typically like to bifurcate some of that investment risk on that stuff and bring in it and bring in investment partners. So, you know, some of it is partnering with landowners, right? So they already own the land. So

the risk is already baked in for them, right? We’re bringing our expertise to develop the property and then they get not only their land basis, but the upside of selling the development on the backend because they’ve got to make money, right? So that’s, yeah. So investors on pretty much every deal, yes.

Michelle Kesil (09:16)
Are the investors the ones like designing and creating this project with you?

Jody Boyd (09:56)
No.

It’s a fully baked cake when we get to it. So what we do is option contracts on property. know, most of the stuff that we do requires entitlements from a municipality or a city. Those are prescribed schedules for that. So for instance, we’re doing a deal right now in Southlake, Texas. I don’t know if you’re familiar with Southlake. I think you’re in Lewisville, so maybe you are. But right on Davis Boulevard, you know, we go and we engage. My company, BridgeRock, engages the engineer, the land planner, the surveyor.

do phase ones, the geotech, all of those technical things that you have to do to ensure that the project can work. And then we, you know, take that, that information and package it and take it to the city for the entitlement side of things, right? To get the zoning that we need, the land plan, the platting approval and otherwise. And that, that typically takes, you know, a lot of folks, especially landowners don’t understand how tedious and long a lead time that process is. So you’re, we’re typically eight to 10 months.

under an option contract. Now one thing that I do like to do and I recommend anybody that wants to go get into real estate development, number one don’t overpay for an option right because you might get eight months down the road and city council says no and now all of a sudden you’ve got if you spent you know 50-100 grand on an option fee for eight to ten months

You’re done, right? You don’t have any options. The city council turned you down. So really, and one of the other things that we typically try to do is we use trek contracts. The Texas Real Estate Commission, propagate contracts for real estate, know, one to four family, ranch land, farmland contracts, that kind of thing. And we really like doing that because number one, we’re not litigious. You know, we don’t want to…

bind up somebody with a 35 page contract that they got to get an attorney that takes three months to look at. it just, it starts off with a hesitation, right? You don’t want to this big complicated contract to somebody that’s not sophisticated in real estate development. So we use a contract that are promulgated by the state. They’re fair for both parties. They’re easily understood. They’re about five or six pages long and we do options. So we got it. Mr. Landowner, we have to have a, eight month off.

And here’s why. All the stuff that goes in, the city, the city schedule, most of the cities around here in North Texas only have one submittal date a month. So if you miss that submittal date on the first week of the first Tuesday of the month, now you can’t submit your project any time until the next Tuesday of the next month. So you’ve lost 30 days already up front. And that’s why the lead times are so long a lot of times. So I would say, did that answer your question? I keep talking.

Michelle Kesil (12:25)
Yeah, for sure. And so what are you most focused on solving or scaling to next?

Jody Boyd (12:31)
Yeah, think folk from a focus is desirable locations. know, a lot of the low hanging fruit has been picked over here in North Texas. You’ve either got to go out or you’ve got to or you’ve got to kind of shrink in your focus. You know, for instance, that project I mentioned in South, like on Davis Boulevard, we’re calling it Bear Hollow. It’s a 20 acre project, you know, 36 single family lots there will sell to the custom home builders there in the area. You know, that’s about there are some other bigger

partials around town but in the in the inner core of the Metroplex it’s harder and harder to find bigger projects. We do have a hundred acre project in Argyle that we’re working on getting closed this week as a matter of fact you know and I would say

Most of the real estate development deals don’t pencil without a district. So if you’re familiar with districts, I’m talking about a public improvement district or a PID or a MUD, a municipal utility district. And essentially what those are for your listeners is that is a municipal bond that you obligate yourself to pay back and it gets paid back through a small assessment on each individual lot. So you obligate the 100 acres or the 130 acre project

and you cut it down into, you know, 400 lots of, you know, 350 lots or otherwise, and then disclose upfront to your buyer, your builder and your end user, hey, there’s a little additional assessment on this property or in the mud, there’s a little bit of a mud tax on there. And then that allows us as developers to actually deliver products that work, that are affordable, amenitized deals that we might not otherwise be able to amenitize because the dollars don’t make sense.

there. know, the land prices have gone up, you know, almost doubled, I would say since 2020. So in the last five or six years, land has doubled, the raw input cost has doubled, concrete’s up, steel’s up, you know.

PVC is up now, straight out Hormuz, the oil, oil makes PVC, those prices are creeping up. So I think from a strategic focus is really finding stuff that makes sense and that we know we can get incentives on.

Michelle Kesil (14:36)
Yeah, absolutely. And what opportunities are you looking forward to?

Jody Boyd (15:23)
You know, there’s some, there’s some really good opportunity. Um, I would say in North Texas, if you take I-35W on the West side, I-35E on the East side, they come together at a point in Denton, right? And they’re, you know, East West, you’ve got a couple of corridors. You’ve got the 114 below that you’ve got 30, um, I interstate 30. I would say from 114 in that triangle, uh, up to Denton, there’s a lot of opportunities.

there.

Some of it’s floodplains, so there’s, you know, gonna have to have some technical compliance to get that done, but I think that’s probably the golden triangle. You everybody talks about the golden triangle of DFW to Austin to San Antonio or Houston and back up to DFW. Kind of shrink that down between the 35s east and west and north of 114. I think that’s probably strategically the area that I’m focusing on doing most growth.

And then the other side of that is the ancillary markets were really big in Decatur, just a little bit west of Fort Worth. It’s about 40 minutes from downtown Fort Worth at the airport. Really the city council and the city staff in Decatur have been really good to us. We’ve got a 400 lot subdivision where we’re on the second phase of there just off of 287 in Decatur that we’re selling to a national builder that, you know, it’s at 50 foot.

product, incentive based to get the growth there. So those two markets that kind of internal in that golden triangle of 114 to the 35s and then a little bit of the ring outside of that to the west.

Michelle Kesil (16:56)
Awesome. And so what has been one of the biggest obstacles or challenges that you’ve overcome in your real estate career?

Jody Boyd (17:06)
Hmm.

I would say overcoming is probably the better way to say that. It goes back to that high cost of entry, right? So you got to have the cash to run it. mean, on the front end, before we even know if we have a deal, you’re probably spending $200,000 $300,000 in consultants and engineering and getting the entitlement stuff done. So for each project, if you want to try to grow your business, so now you go from five projects to times 300,000 to 10 times 300,000. So the money.

in on the upfront is always a big raise and frankly it’s all at risk, right? So you don’t know what you have when you spend that money. So overcoming that, fortunately ⁓ so far, knock on wood, I’ve not gotten denied ever for a zoning case. A lot of that has to do with outreach. Just like when I find deals by knocking doors, when we have a deal, people want to be heard. Most folks

when they hear, that pasture that’s out back, that’s the reason I bought my home, because I had that view out back, and not internally understanding, well, that’s Mrs. Johnson’s property, and she might develop it someday, and she has the right to do that. So overcoming those objections of fear based on change with our neighbors, and really any project, is really something that you have to really get in the grind to overcome.

Most of the time, you sometimes we haven’t done this at staffs recommendation, but typically I’ll just get my truck and go knock every door that backs up to our property and tell them, Hey, I’m Jody Boyd. This is what we’re going to do. This is what we’re trying to do. Here’s my card. You know, we really make an effort to be good neighbors to folks. And part of that is communication, right? They might not like what you’re doing, but if you go and communicate, Hey, here’s what we’re doing. If you have a problem, you have the direct access to the guy who’s doing it. I’m the guy who’s

writing the checks and hiring the contractors. If you have issue, I’m your liaison, right? So what that does is now they feel like, not just feel like, but they do have a main line into the decision makers on this process. And that also keeps them and heads them off the path from calling up their city council member and griping them out, calling up the city staff and complaining about this or that. You know, we’ve had a lot of rain this spring and last spring, especially.

And you know there’s drainage down the back of people’s yards that’s been there forever Well, you know they get we get a big gully washer and there’s some rain that runs down the drainage easement on the back of a yard and they kind of freak out a little bit and Hey, you guys are flooding my property. Okay. Well, I’m gonna go out there and I’m gonna go walk your property We’re gonna look at it and and I’m gonna ask well if I’m responsible for flooding the back part of your property Why do you have all these French drain inlets here? Those were put in long before I came along. So obviously you’ve been getting water on your property

Now, doing what we need to do to mitigate that is also key, but I really think, you know, it’s a, when you make community, it’s a community process for better or for worse. And so engaging those stakeholders and your neighbors and being a good neighbor, think is very crucial.

Michelle Kesil (20:07)
Absolutely. Thank you for sharing your perspective. So before we wrap up here, if someone wants to reach out, connect, learn more, where can people find you and connect with you?

Jody Boyd (20:10)
Mm-hmm.

Yeah, you bet. So BridgeRockDevelopments.com is our website.

You know, my cell phone is 214-727-1110. If they want to call me, I’m happy to talk to them. You know, one of the things that I really kind of fills my sales is helping folks that want to get into the business. You know, a lot of folks are like, Oh, you know, competition. We want to kind of, you know, put that in the back burner or push them off. I’m really not like that. Um, you know, there’s plenty of stuff out there to go around and frankly, the need for new homes, uh, and lots here in the Metroplex, especially North Texas.

is so great. We could stand to have some other good people doing real estate development, I think. One of the things that I, people poured into me when I was young in my career and I learned from some really good developers that have done some outstanding subdivisions in Northeast Tarrant County. And I really enjoy passing that on. So if people want to reach out, if they have some questions, I’m happy to go have coffee with somebody or meet them and just be as transparent and open a playbook as I can be.

Michelle Kesil (21:17)
Perfect, I’ll appreciate your time and your story. Thank you for being here.

Jody Boyd (21:21)
You bet, thank you so much, appreciate the time.

Michelle Kesil (21:23)
And for those tuning in, you got value, make sure you’ve subscribed. We’ve got more conversations with operators like Jody who are building real businesses. We’ll see you on our next episode.