The private-builder, private-equity partnership between LGI Homes and GTIS Partners has bought more land to help fuel LGI's fast-selling growth in the San Antonio, Texas market.

The partners bought Luckey Ranch, a 93-acre parcel with 393 single-family home lots, across the street from its best-selling Canyon Crossing community, which is nearing build-out.

"You could argue that it's an extension of its existing community there," said Rob Vahradian, senior managing director for GTIS. He added that LGI has been selling between 10 and 15 homes a month in Canyon Crossing.

"And in their home market of Houston, they (LGI) are doing double the absorptions of any other home builders," Vahradian said.

LGI is also doing well in the Dallas-Ft. Worth market, where GTIS (formerly known as Goldentree Insite Partners) made its first investment in the company when it bought Chisholm Springs.

"It's (Chisholm's) pretty much hitting our pro forma numbers," said Vahradian, adding LGI has sold and contracted to build close to 40 houses there since sales began at the end of May.

Vahradian said GTIS continues to be impressed with LGI's business model of marketing to apartment dwellers who don't have a house to sell and who can buy a home with a yard for what they are paying in rent. LGI uses conventional FHA, VA and USDA financing to finance its houses for buyers with credit scores of 680 or more.

GTIS isn't finished with its land-buying partnership with LGI. "We're going to continue," Vahradian said. "We are working on a few projects with them for Dallas-Ft Worth, San Antonio, and something in the Houston home base. Our original deal was a programmatic venture with them."

GTIS is making other land-buying deals as well, not all with home builders.

"We basically are making two types of investments," said Vahradian, "to private home builders who don't have access to capital, who have sound business models in sound markets. And we are extraordinarily selective."

And the company is buying real estate itself where absorptions are good and pricing is holding and in "boom-bust markets" where the market went up higher and fell further than was justified.

"We are getting assets at extraordinarily discounted levels," he said. GTIS is looking for land available with low carrying costs and deeply discounted prices. "The beauty is that we investing it on leverage and take the long-term view. We know we are going to get there (to returns), and if it takes a year or two, that's fine."

An example is GTIS's recent purchase of Grimsley Ranch, 580 acres zoned for 1,800 single-family homes in Pasco County, just north of Tampa, Fla. It bought the land from a bank for about 15 cents on the dollar of what it was worth at the market peak and for about 45 or 50 cents of the debt on it. While entitled, the land lacks infrastructure.

GTIS' partner in the deal is Metro Homes, a developer, which invested capital in the deal as well and which will manage and develop the land to be sold to builders at a later date.

"What we like about that investment is that when the Tampa housing markets normalize, even if pricing stays the same and absorption comes back to normal, we make our money back," he said. And if the market's pricing rises, it stands to make a profit.

"We are looking at a lot of opportunities," said Vahradian. "For every nine or 10, we look at one or two seriously, and maybe one will happen."

Learn more about markets featured in this article: San Antonio, TX.