Why Ground-Up Development Is Still the Best Way to Build Wealth in Texas Real Estate

Written by:

Heather Hook

Date:

22 Apr 2026

KeyCrew Studio

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Buying an existing property feels like the safe play. The building is already there. You can see it, inspect it, and model the cash flow based on what it is already doing. But according to Culby Culbertson, founder of Culbertson Holdings, that perceived safety comes at a cost, and in many cases it is a cost that significantly limits your upside.

Ground-up development, done right, gives investors something that value-add acquisition rarely can: the ability to compound your equity multiple times before you ever stabilize the asset.

“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.”

The cycle he describes is layered. You acquire raw land, work with the municipality to get it entitled and zoned at the right density, and immediately the land is worth more than what you paid for it. You can refinance, pull some capital back out, and continue. Then you bring in utilities, level the site, and put in infrastructure. Another value creation event. Another potential refinance. Then you go vertical. By the time the building is finished and you move into lease-up, you may have already pulled out much of your original equity through the refinance cycle, and the stabilized asset still sits in front of you.

“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.”

Contrast that with a value-add acquisition. You are buying a property that already carries a significant price tag, then underwriting construction dollars on top of that while simultaneously managing the property and servicing the debt. The math gets tight quickly, and the margin for error is smaller than most buyers want to admit.

None of this means development is without risk. Culbertson is direct about the variables that catch people off guard: conversations with the city, engineering plans, permitting timelines, utility availability, and soft costs that tend to run higher than initial projections. Developers who underestimate any of those variables often find themselves over budget and behind schedule before a single unit is occupied.

“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.”

That is where working with a team that sees these deals regularly makes a measurable difference. Culbertson Holdings has funded land development, ground-up construction, and construction takeout refinances across Texas, including a recently closed 81-key SpringHill Suites by Marriott and a 132-unit build-to-rent community in McAllen. The team understands how deals are supposed to look at each stage, which means fewer surprises for the developer and a smoother path to the finish line.

For investors looking for where to put capital in Texas right now, Culbertson’s conviction is in the markets showing infrastructure investment: new roads, new highway access, retail corridors filling in. Areas like DeSoto, Terrell, Midlothian, and the I-35 corridor between Dallas and Austin are showing exactly those signals. Population is moving to where affordability exists, and affordability exists where development has not yet caught up to demand.

The window does not stay open indefinitely. But for investors willing to do the work and structure their capital correctly from the start, ground-up development in these markets is still one of the clearest paths to real wealth creation in Texas real estate.

About Culbertson Holdings Culbertson Holdings is a Dallas-based capital markets advisory firm specializing in debt and equity placement for commercial and residential investment assets. With over $550 million in closed loans across more than 12 states, the team works across all core asset classes including multifamily, industrial, hospitality, retail, and land. Culbertson Holdings provides transaction advisory, creative deal structuring, and access to institutional and private capital sources for acquisitions, refinances, ground-up construction, land development, and value-add projects. To learn more or connect with the team, visit culbertsonholdings.com.