According to Culby Culbertson, founder of Culbertson Holdings, ground-up real estate development represents a more effective wealth-building strategy than purchasing existing properties in Texas markets. While buying established buildings may appear safer, Culbertson contends this approach significantly limits investor upside compared to development projects executed properly.
‘With land development, you’re purchasing unimproved land at a very low cost,’ Culbertson explains. ‘The barrier to entry is really a matter of time, not cost. And once you start building value through the entitlement process, you can refinance, pull cash out, and keep going.’ This creates a layered cycle where investors can compound equity multiple times before a project reaches stabilization.
The development process begins with acquiring raw land, then working with municipalities to secure entitlements and appropriate zoning. This initial step immediately increases the land’s value beyond its purchase price, allowing for refinancing and capital extraction. Subsequent phases including utility installation, site preparation, and infrastructure development create additional value creation events, each presenting refinancing opportunities. By the time vertical construction completes and lease-up begins, investors may have already recovered much of their original equity while retaining the stabilized asset.
‘You can be two to five times on your money by the time you stabilize,’ Culbertson says. ‘That compounding effect is just not something you get when you buy an existing property.’ This contrasts sharply with value-add acquisitions, where investors purchase already expensive properties, then add construction costs while managing the property and servicing debt, creating tighter margins and smaller error tolerance.
Development carries substantial risks that Culbertson acknowledges directly. Variables including municipal negotiations, engineering plans, permitting timelines, utility availability, and underestimated soft costs frequently challenge developers. ‘It’s not just brick and mortar,’ he says. ‘You have to understand your timing with the city, your utility limitations, whether water lines are available. There’s a lot that people overlook that ends up being more costly than expected.’
Experienced teams make measurable differences in navigating these challenges. Culbertson Holdings has funded projects across Texas including a recently closed SpringHill Suites by Marriott with 81 keys and a 132-unit build-to-rent community in McAllen. The firm’s transaction experience helps identify proper deal structures at each development stage, reducing surprises and smoothing the path to completion.
For current Texas investment opportunities, Culbertson recommends markets demonstrating infrastructure investment through new roads, highway access improvements, and retail corridor development. Areas including DeSoto, Terrell, Midlothian, and the I-35 corridor between Dallas and Austin show these signals as population moves toward affordability, which exists where development hasn’t yet matched demand. While this window won’t remain open indefinitely, properly structured ground-up development in these markets represents what Culbertson considers one of Texas real estate’s clearest wealth creation paths.
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