The Three Land Deal Types We Always Pass On (and Why)

By Drew Haney · Founder, Rooster Capital · May 2, 2026

I get asked all the time what deals we won’t fund. The list is short. Here’s the “automatic no” list, the grey-area list, and what we’d rather see instead.

The three deal types we always pass on

People sometimes assume a funder’s job is to say yes to anything that looks profitable. It’s not. Our job is to say yes to deals that fit our model and no to deals that don’t. There are three categories I see weekly that get an automatic no, no matter how good the operator’s pitch is.

1. Land that needs significant development to sell

If the deal thesis is “buy the raw land, then subdivide, then survey, then run utilities, then sell the lots,” we’re not the right partner. That’s a 12–36 month project with permitting risk, contractor risk, and a lot of capital tied up across phases. We’re built for the buy-fast / sell-fast cycle on land that’s already in a marketable state.

The right capital for development land is usually a development-focused private equity shop or a regional bank that does land construction loans. Different beast. We’ll happily refer you to one if you have a good development deal.

2. Deals where the seller needs creative financing we can’t structure

Some sellers won’t take cash. They want owner-financing for tax reasons, or a 1031 exchange where we step into a like-kind property, or some structure that converts a chunk of the deal into a long-tail receivable. Those structures can be brilliant for the right operator-funder pair, but they’re not what we do. We do simple cash-purchase JV deals. In and out.

If the deal absolutely needs creative financing, you might pair us up with an owner-finance specialist or use a different funding structure for that specific deal.

3. Out-of-pocket reimbursements that aren’t in the deal

Operators occasionally submit deals where they want us to fund the property AND reimburse them for “due diligence costs” or “sourcing fees” or “personal time spent finding the deal.” Hard no. The deal is the deal. We fund the acquisition + the actual pass-through costs of holding and selling the property. We don’t reimburse operator overhead. That’s baked into the 50% of net you receive.

If your sourcing/marketing costs are substantial, you’ll want to model them into your deal-level math — not ask the funder to absorb them.

The grey-area deals where we sometimes say yes

A few situations are case-by-case:

• Land with light entitlement work needed — e.g., recording a plat that already exists, or getting a minor zoning variance. If the work is <30 days and <$2K, we can usually structure for it.
• Owner-finance flips — if the math works at our cash purchase price AND the seller will take cash, we’ll do those.
• Larger acquisitions ($150K+) — we can do these but need extra underwriting time and sometimes co-fund with another partner.
• Specialty land (timber tracts, hunting parcels, farmland) — we look at these but want operators who specifically know that niche.

What we’d rather see than a complex deal

Five clean simple deals beats one complex one for us. If you have a great development idea, that’s a different conversation; if you have five $20–60K cash-acquisition deals that we can run through the JV process consistently, that’s our entire wheelhouse and we’ll fund all five.

The point isn’t that complexity is bad. It’s that we’ve found the highest operator return per hour comes from running a system on simpler deals at higher volume — not from chasing the home-run deal that requires unique structure.