Company: LGIH
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001580670-25-000016
Chunk: 41

Company: LGI Homes, Inc.
Filing Date: 2025-02-26
Form: 10-K
Item: Item 1
Chunk 41
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 agreements. During 2024 and 2023, we had 552 and 679 wholesale home closings, respectively, which represented 9.2% and 10.1% of our total home closings in 2024 and 2023, respectively. We expect our wholesale business to represent approximately 10% of our annual home closings during 2025. 

Land Acquisition Policies and Development 

We continue to be an active and opportunistic acquirer of land for residential development in our markets. We source land from a wide range of landowners, brokers, lenders, builders and other land development companies. We generally acquire raw land and finished lots in affordable locations that are further away from urban centers than many other suburban communities but have access to major thoroughfares, retail districts and centers of business. We conduct thorough due diligence on each of our potential land acquisitions, and we typically look at numerous opportunities before finding one that meets our requirements. We also maintain a pipeline of desirable land positions for replacement communities and new communities.

 Our lot inventory decreased to 70,899 owned or controlled lots as of December 31, 2024 from 71,081 owned or controlled lots as of December 31, 2023 primarily related to our discipline in the evaluation of and selective approval of new land deals. 

We had 151 and 117 active communities as of December 31, 2024 and December 31, 2023, respectively.  Generally, it takes us  two to five years to turn raw or undeveloped land into an active community. 

6

We utilize land banking financing arrangements on a limited and strategic basis. We have land banking financing arrangements with a third-party land banker to repurchase land that we sold to the land banker as a method of acquiring finished lots in staged takedowns, while limiting risk and minimizing the use of funds from our available cash or other financing sources. In consideration for this repurchase option, we paid a non-refundable commitment fee. Based on our right to control the ultimate economic outcome of these finished lots, these assets will continue to be held as real estate not owned within our inventory and have a corresponding obligation within our accrued liabilities to recognize this relationship. While we are not legally obligated to repurchase the balance of the lots, we are subject to certain performance obligations, financial and other penalties if the lots are not purchased. We do not have any ownership interest or title to the assets that we have sold to the land banker and we do not guarantee any