Create a Business from Home Builders' Woes

Homebuilders face a "side effect" challenge: a massive land glut. But one savvy entrepreneur is creating a new business from the builders' problems.

CNBC's Diana Olick reported that major U.S. builders including Hovnanian Enterprises, Toll Brothers and KB Home posted $12 billion in writedowns in the last quarter -- with much of that figure attributed to losses on fallow land holdings in regions like California, Phoenix and Florida.

Most notably, D.R. Horton sold a packet of some 7,000 acres for a mere $70 million in November.

And Lennar -- which posted a $1.2 billion loss for the fourth quarter -- sold property across eight states for 40 cents on the dollar.

But Jeffrey Gault, the chief executive of LandCap Partners, sees the builders' losses as a golden -- if long-term -- opportunity.

LandCap has been amassing capital to buy the over-inventoried land and plans to eventually build new homes on the plots -- when the market inevitably bounces back.

New Problems for Homebuilders
New Problems for Homebuilders   

"All the builders realize cash is king right now," Gault told CNBC. He plans on biding his time: "It could take a couple of years" before consumer demand is strong enough again.

But Gault isn't just taking advantage of homebuilders' woes -- he's also creating partnerships with a few of the builders themselves, in essence holding their land while they recover.