Take the builder's bulk offer on all five lots, or retail them over two years?

I retailed a four lot split off 30 acres and it took 26 months, 14 of which were the last lot alone. What I spent on carry, mowing, one price reduction and a second round of photography came to about 11 percent of that final lot's price, so I roughly matched a bulk discount on the tail and beat it badly on the first three.

The part your model probably understates is that lot one and lot two sell themselves and lots four and five sell to whoever is left. If your cash has a job waiting in month three, the builder is paying you to skip the wait. If it doesn't, waiting is close to free at $3,100 a year.

Ran your numbers as an annualized figure since that's the only way the two are comparable. Bulk: $405k less commission if you owe one, call it net $390k on a $214k basis, closing in about four months from today. Retail: $500k gross, less 6 percent selling cost, less $6k of carry, so net around $464k, with the last dollar arriving at month 24 and the median dollar somewhere around month 12.

On those inputs retail wins on total dollars by roughly $74k, and bulk wins on annualized return only if you can actually put the $390k into something that clears mid teens for the following 20 months. That's the assumption doing all the work. I've watched myself assume a next deal exists and then spend nine months not finding it.

Before the exit question I'd want two things answered. Does your county require a recorded maintenance agreement or shared driveway document for the new lots, and if so who is obligated while you still own three of them? And does the assessor reassess on plat recording in your state, because in some counties five taxable lots priced as building sites is a very different bill from 41 acres of whatever agricultural or timber classification you're carrying now. That reassessment can move your $3,100 a lot, and it lands during exactly the months the retail plan needs to be cheap.

Every split I've watched ends with one lot nobody wants. That lot is the whole argument for the bulk offer.

In the counties I look at there is no builder who would make that offer, so the choice doesn't exist. Retail one at a time to owner-users, and 22 months to clear five would be considered quick. Worth remembering that a standing bulk bid is itself a market feature, and it's telling you this submarket has active builder demand. That demand is also what your retail buyers are competing with.

Is he offering to buy or offering an option? I looked at a bulk deal last year where the paper was a rolling option, one lot every 120 days at a fixed price, with the seller holding the taxes on the rest. That is not the same thing as a cash closing on five lots and the discount was priced as if it were. Ask whether he wants deed restrictions or a right of first refusal on anything you buy nearby too.

On the hybrid option, watch the anchoring. If you sell two at $81k in a state that records prices, that number is public and the appraiser working your retail buyer's loan may well pull it. You'd be setting your own comp 19 percent low and then arguing with it for two years. In the dozen or so states that don't publish sale prices, the risk is smaller, and marlow says his is one of them, so the hybrid is less dangerous for him than it would be for me.

The builder priced five lots as inventory he has to sell houses off, which means his number has his profit and his carry baked in. Retail asking prices have neither. So the 19 percent isn't really a discount to value, it's the difference between two different jobs, and the question is whether you want to do the second job for 20 months.

One mechanical thing. Check whether your approval carries any completion or improvement obligation that stays with you as the subdivider after lots convey, drainage work, monumentation, road patching where the driveways cut in. Some counties hold a bond or letter of credit until that's signed off, and the release timing varies by county and state. If you bulk sell and then still owe the county something, you've handed away your leverage over the lots while keeping the obligation. I'd rather finish the punch list first, then decide.

Also ask the builder what he thinks the two weakest lots are. His answer is free market research either way.

My question is smaller than everyone else's here. When you say 19 percent under retail, is that under what you'd ask, or under what similar lots actually closed for? Since your state doesn't publish prices, the $500k is an asking-price estimate, and the builder's $405k is a real cash number. Comparing a firm number to a hoped-for number always flatters the hope.