Today Clint Coons, Esq., sits down with Winston Templet, a seasoned real estate investor, developer, and contractor with over 20 years of experience. Based in Tennessee, Winston shares insights from his extensive career, including his early days as a reluctant real estate investor, where he began with trailer parks. They dive into the state of real estate investing in 2025, with Winston emphasizing the shift toward building rather than buying. Winston explains his approach to finding profitable properties, partnering with land sellers, and navigating complex regulations, zoning, and permits. He also offers valuable advice on selecting general contractors, financing options, and how to avoid common pitfalls, particularly for first-time investors. Throughout the conversation, Winston highlights the importance of education and building strong community relationships as keys to success in real estate.
Winston Templet is a seasoned real estate investor, developer, and contractor with over two decades of experience in the industry. Based in Tennessee, he has built a substantial real estate portfolio, demonstrating a keen ability to identify and capitalize on lucrative opportunities in the market. Winston co-founded “The Real Estate Templet,” a platform dedicated to educating and empowering individuals of varying experience levels on real estate investment and development. Winston’s passion for real estate is matched by his commitment to educating the next generation of real estate professionals. It is his firm belief that education is the key to success.
Highlights/Topics:
- Clint’s introduction of guest Winston Templet
- A reluctant real estate investor – the trailer park story
- The state of investing in 2025, builds instead of buying
- How Winston finds properties, sharing wealth with land sellers, partnering for success
- Regulations, zoning, permits, etc.
- How to approach city and municipal offices, proposing zoning changes
- Key costs that must be considered – engineering fees, sprinkler systems, green energy requirements
- Financing recommendations, building relationships with community lenders, cash refi’s from other properties
- Selecting general contractors – it is crucial to research, get referrals, and hire the right people, never pay money upfront!
- First-timer mistakes to watch out for
- Setting up protections from liability with the right business entities
- Closing comments, final words of advice
Resources:
The Real Estate Templet On YouTube
Schedule Your FREE Consultation
Tax and Asset Protection Events
Full Episode Transcript:
Clint:  Hey. Have you ever thought about getting started in real estate investing and you do not know where to begin? In this video, what I’m going to do is I’m going to be interviewing one of my clients who started out in real estate investing, probably were about 18 years ago. When I met him 13 years ago, he was just getting started, had a few properties in these sense, blowing it up.
Today, what you’re going to learn is how you, as a new real estate investor, or maybe you’ve been investing for a while, you can take your real estate investing to the next level. With that, I want to welcome on Winston Templet. As I stated, he became a client back in 2013. We sat down with each other.
I remember this. Winston was attending an event where I was speaking. It was a real estate investor conference where he’d signed up to learn how we could take his investing to the next level. I truly believe that education can help a lot of people when it comes to real estate investing. I’ve seen what it’s done for him. But at that time, he had a few properties.
He was finding success in real estate, and he had a very successful HVAC business, where he worked for restaurant companies from the curb all the way to building the property, all the way up. He was doing well, but he realized that the path to prosperity is through building real estate, creating a passive stream of income.
Right before the show, we were just talking about the fact that I was heading off to Florence, and he was saying the exact same thing that he’s got all this great wealth that he’s created. The money’s coming in. It’s now time for him to start vacationing. Before we let him go off and start vacationing, we’re going to start asking him some questions about his journey. Winston, how are you doing?
Winston: I’m doing great. I appreciate the opportunity to come on your show and share my experience and my story. If I can help some people, that is the whole goal with what we do.
Clint: Yeah. The thing right off the bat is when I look at you and I see your background, you’ve got all those entities that I’ve created for you. I remember when you first started, there were just a few of them on the shelf, and now look where we’re at today. I know there’s more, but they’re not up there on the shelf. What is that doing for your privacy?
Winston: I like it. It gives me a lot of anonymity. We got stuff going through a company we got out of Nevada. It shelters me. It shelters me so people don’t know exactly what I own. Some people know a little bit about what I own that I know, but if you don’t know me, you don’t have any idea what I own actually. I like it.
Clint: Great. Let’s start talking about real estate, development, and how you got started. Why don’t you tell the audience, the people that are watching this video now, what inspired you to get started in real estate investing?
Winston: To me, perfectly honest, I did not want to get involved in real estate investing. I had a successful maintenance company. I was servicing about 700 restaurants in Nashville. We had a crew of 70 guys working for us. We just worked from can to can’t.
What got me involved in real estate was I had a friend of mine who wasn’t working out in the company, so he left and started as a real estate agent. He found a trailer park he wanted me to buy. I said, man, I’m not buying a trailer park. He said, nah, man, it’s synergy. I’m like, I don’t even know what that word means. I had to look it up on a dictionary and I’m like, okay, I got it.
It took me like two years to buy that trailer park because I did not want to do it. It stayed on the market for a couple of years, and finally I bought it. Right out of the gate, I think I gave $195,000 for it. It was bringing in $14,000 a month income. That was my first experience in real estate.
Once I started to realize, this money comes in every single month. I don’t do anything hardly at the trailer park at all, and it still comes in. Then I started buying single family homes, I started buying some office space, and then I started buying some warehouse space. It just continued to grow from there. But it was really an accident. It was an accident I got involved in real estate.
Clint: Yeah. I’ve watched you change over the years as far as your real estate investing has gone. Now you’re doing buildups from ground up construction. Once you talk a little bit about what you’re currently doing in real estate investing, because everyone in the snow, here it is 2025, in this market, where do you see investing going for you?
Winston: I look at investing as very fluid. We got to move as it moves. Whenever we see appreciation on the horizon, I invest for that appreciation when it’s down low. I’m going cashflow at all times. Obviously I don’t want properties that don’t cashflow, but I got involved. I couldn’t find anything that I could buy back in 2016 that would cashflow. Everything was just, the numbers did not work.
I bought a piece of property, a little trashy piece of property. It was the last lot in the neighborhood. I paid $6000 for it. I built a house on that property to see what it would look like if I just built the house. I didn’t have any goals. I just didn’t want to lose any money. I said, if I could just build and get the experience, I’ll see what it does.
I built that house for about $125,000 with the land included, and I sold it for $240,000. That was my very first build. From there, I started looking at it. I said, wait a second, I can buy land and I can build a house cheaper than I can buy a house. Then I got about 10 years before I really have to worry about anything. I would take that period of time. That has been mainly what I’ve done since 2016. Rather than buying somebody else’s property, I go out and I build it.
I discovered through a land development class that I did, that I could go in, I could buy one piece of land, I could invest six months of my time, and I might turn that one piece of land into five pieces of land. Now I bought a piece of land for $100,000, and now I can put five different builds on it, and I got one down the road. I’ve got $100,000 in three lots. I combined everything and made five lots out of it. I built four houses and five duplexes. Now on that piece of property, I have 10 units on the duplexes and then another four, so I got 14 total units on it.
My whole land development cost is probably under $110,000 with engineering fees and everything, so I didn’t have a ton of money in it. The builds, each one of the houses, when I built them, I was able to pull a hundred percent of my equity out of it. I didn’t have any money in it. It is completely an infinite return. Then I built the duplexes, and the duplexes cost me about $1.2 million to build them. As soon as I built them, I pulled $1.6 million out of it. I put the $400,000 in my pocket.
I don’t have any money invested in all those properties, and I still make about $10,000 a month positive cashflow on it. That is just the process that we do. We rinse and repeat. I bought a piece of land that I could develop. I went and did the engineering on it.
I paid a hundred thousand dollars for this piece of land. I put about $200,000 in engineering fees, so I got about $300,000. I did an appraisal on it for $1.3 million is what it appraised for, and I actually have people looking at wanting to buy it right now. We’re talking about maybe selling that piece of land rather than doing the new construction myself. There’s just tons of opportunity in it, and education is king, right?
Clint: It is. This is what I wanted to get you on to my channel is because in 2025, a lot of people or the people that I follow have been saying over and over again, and you align with this, that buying raw land they think is what investors should be doing in 2025 and doing what you described. As you stated, real estate right now acquiring somebody else’s property, the numbers don’t work. Finding that land and turning it into something is really important. That brings me to this question. How do you find the right location to build a house?
Winston: Most of what I find, I drive around, I see something that’s grown up, and I’ll just stop and find out who. If it’s that’s by somebody’s house, I may find out who lives next door to it, find out if they got a phone number for the people, and ask them. Typically, I don’t find it on MLS. I don’t know that I have any land that I found on MLS. I think everything I find is me driving up and me going finding out through the Sumner County.
I do a lot of investing in Sumner County, Tennessee. I’ll go through their website and find out who owns that piece of land, and I’ll see if I can find them on facebook. If I can, I will send them a message and ask them if they’d be interested in selling it. If I know where they live, I might stop by their house, just knock on the door, and just talk to somebody. I don’t know how you are. I get 100 calls a month, people wanting them. I want to buy this piece of property and it’s all just a scam garbage. It just ticks me off. I don’t want to do that to people.
If I knock on somebody’s door and let them know what I’m looking for, that’s fine. I got a piece of land I just bought a few months back. It’s five acres, but I can probably put somewhere between 10 and 20 duplexes on it. I bought the land for $50,000, but I spent four years talking to this guy trying to get him to sell me a piece of land. We would meet probably once a quarter. He’d call me up and he’d say, hey, Winston, can you come over and talk to me? I go talk to him.
We never made the deal, but I always went and talked to him, always went and talked to him, always went and talked to him. Then one day he called me up and said, hey, man, I’m needing some help, do you still want that piece of land? I said, yeah. I bought that piece of land. We will do the land development on that, and it will turn out to be a great thing.
The funny thing about that piece of land is I bought it for $50,000. I told him, I said, for $50,000, what I’m willing to pay you is $25,000 per door for the land. Right now, with the zoning there, I can put one duplex on it. I’m willing to give you the $50,000 for the one, I said, but what I will do with you is I’ll make a deal with you. If I can put five duplexes on it after I put the first four doors on it, the first four units, two duplexes, I will start giving you $12,500 for each one after that, even though I already own the land.
That is exactly what I will do whenever I get prepared to do that deal. I will pay that man as much as I can afford to pay him because I don’t want to cheat him out of money. I think that’s the biggest thing that everybody feels like they get scammed because everybody’s trying to lowball everything. I’m not wanting to lowball everything. What I’m trying to do is I’m trying to get my land cost no more than 8% to 10% for raw land, and then I can go up no more than about 22% to 23% if it takes the land into consideration, it takes the engineering fees into consideration. Not a concrete driveway, but a driveway and underground utilities.
If I can get all of that and I’m in it at 20% of the finished value of the home, the numbers will work in the end. If I can do that, then that’s how I’m judging my land. My land comes to me by me going out there and just knocking on doors and talking to people. Once people know who you are, they’re going to call you. Once the community knows who you are, they got a piece of land, they’ll call you.
Clint: You just dropped so much information there. Whoever’s watching this right now is going to have to go back and replay that one minute and a half, two minutes of information that you dispensed. I’m going to go back over it. Before I do that, what I heard and I think is really important for all the people who are watching this right now is how you approach potential sellers. You’re creating a relationship, keeping top of mind with them, and then you’re using creative financing.
You hear a lot of people talk about creative financing in the terms of, oh, buy on term. Maybe you go, you approach the land owner, and you say, listen, I’m going to buy this and then I’ll pay you out over time, or they just want to tie up the property. What you’re doing is you’re essentially making them a partner in your success. If you make money, they make money. I like that strategy because it’s something different that other people aren’t doing. My hat’s off to you on that.
What you stated there now I want to go into is zoning laws, building codes. You have to be researching this to some extent or have an idea at that land you want to buy and how that’s going to impact your development. If you can only invest 20% of your total cost, you said build cost can only go towards the entitlement process of the property itself, what type of research are you doing on the front end before you make that offer?
Winston: It’s not the build cost, it’s the actual finished value of the home. I’m looking at the finished value of the home. Any community I’m going into, I’m going to be aware of what’s going on around me and see what’s there. I’m going to go into the city, and I’m going to talk to the city manager. I’m going to talk to planning and zoning. I’m going to talk to whoever can tell me, hey, I got this piece of land, it’s just a rural residential. I would like to put a duplex on it. Can I put a duplex on it?
I love the government. The government is the land of no. They’re going to tell you no to no matter what your question is, unless you ask your question properly. I would go in and I would ask, can I put a duplex there? If they say no, I would say, okay, can you tell me what I need to do to be able to put a duplex there? I don’t care what piece of land you got. You can always go try a different method if they tell you no.
They may tell me, you got to get planning and zoning involved with it. They have to sign off on it, and then the city council has to sign off on it. If they told me that, then I would go talk to the person over the planning and zoning. I would talk to them and say, what is your appetite as far as this is concerned? Would you allow me to put two duplexes here or one duplex here? Would you allow me?
They’re going to tell you yes or no. If that person is on planning and zoning tells me no, there’s no way that’s going to get through, then I’m probably going to stop. I’m not going to go beat a dead horse on that because most of the time you’re not going to win. But if he says, I really don’t have a problem with it, but I’d like to see a little bit more about what you got in mind, then I may hand sketch something up, or I may get my engineer to hand sketch something up and we would go from there.
I’m not going to do anything without an answer. I want to know that what I’m going into is going to be successful. I’m not going to go spend money to invest. I told you on the apartment complex, I got $200,000 engineering fees.
Before I’ve spent any of that money, we did a hand sketch of that development. We got the city council opinion on it, and they said they would approve it. We got planning and zoning, and they said they would approve it. Then we had the engineer do the drawings. Once they approved the drawings and the site work, then I got an architectural engineer involved that came, and he did everything vertical.
We did it all, but I did it in a way. I knew what I was doing first, then I got it rezoned, and then I took it to the next level. It isn’t difficult. Everybody is so afraid to talk to these people with the cities. They’re not hard to talk to. They’re real easy to talk to, but you do need to ask the right questions.
Clint: Yeah. That’s what I want to ask you. What are some of the key considerations? If you’re going to go in there and talk to somebody at the city or the county, wherever you’re doing this type of project, considering you’re doing it, what are some of those first key questions they should ask before they go out and approach the landowner just to make sure that that property can accommodate what they’re looking to do? What would you say?
Winston: Most cities nowadays, you can go on their website and you can find out what the property is zoned for. I would look at that, then I would look around that property, and see if there’s any property touching. I got a piece of land that’s just rural residential, but it’s also touching a piece of property that is commercial. If it’s touching that property, there’s a good chance that I can rezone that property to commercial. Once I see that’s an easy transition, then I would start talking to somebody else.
If it wasn’t doing it, and let’s say commercial was two miles down the road, then you’re going to get into a spot zoning situation. That may and may not work. That’s whenever you’re going to talk to the city council, the planning and zoning people, or the city manager. You say, hey, I know there’s no commercial right there, but it’s a great location. You explain it to them. That really can go a couple of different ways. You may have a city manager that says, it’s spot zoning, we’re not doing it. You may have somebody else that says, well, that would be a great fit for that area because I don’t see anything else that would work on that particular lot.
I got another piece of property that, it is really a crappy piece of property. I bought it for $50,000. It goes off the road about 60 feet, and then it goes almost a 45 degree angle up a hill after that part. It’s been in our city. It was all growed up, it just looked like trash. I talked to the city about it and I said, hey, what can I put there? They said, well, you can put something commercial there. I went and I bought it.
After I bought it, I went back to the city. I said, what about if I put some townhomes there? It wasn’t as long for townhomes, but that was another piece of property. It touched a residential piece of property that it is permitted in that, if I can get approval for it. We took that to planning and zoning, we just did off of a sketch drawing, we just talked to them, and planning and zoning liked the idea. They said they would support it. I went to the city council and talked to them. They said they would support i, and then we started getting things drawn up from an engineer. We just took it from that level.
The question is, if it’s not zoned for that, tell me how I can get it rezoned. They’re going to tell you, if it’s not going to happen, they’re going to say very basically, it’s not going to happen. I want to know, is there city sewer, is their city water? Sewer is important, especially if you’re wanting to step up the multifamily in any way, duplexes and stuff, because I got one piece of land that I have that, it has a two-bedroom house on it that was in rough shape, so I tore it down. The county said I could put another two bedroom house in there. That would be fine.
I tore it down, and then I wanted to put a three-bedroom house. I called up the soil scientists environmental in that county. They said, you’re going to have to hire somebody else to come in. It’s got to be re-perked to see if it would happen. I called the guy up on the phone and the guy said, I don’t think that’s going to work. He said he doesn’t like the square footage, it’s right on that piece of land. He said, I don’t think it’s going to work.
I said, well, is there a chance? He said, there’s a chance. I said, how much will you charge me to come look at it? He said for $250, he would come do a visual inspection of the land. That $250 is worth my money because now, him and I are going to have a face to face on that piece of land because I’m going to meet him.
He got there, and we walked that piece of land for 15 minutes or so. At the end, he said, nope. He said, there’s no way you’re going to get the square footage that you need. You don’t have the fall that you need on the property. He said, it’s not going to work. You can put a two-bedroom on. He said, I wouldn’t give you permission to put a two-bedroom on it, but because there was a two-bedroom here, we can still put a two-bedroom on it.
What I’m going to do is I’m going to put a two-bedroom on it with an office. It’s going to be the same three-bedroom house I was going to build, but the third bedroom is going to be an office instead of a closet. It is what is it, and that makes it perfectly legal. I wanted to do it as a three bedroom house rather than a two bedroom house because I’m not ever going to sell it probably. But if I ever wanted to sell it, it would sell better as a three-bedroom and a two-bedroom.
Clint: Okay. What type of key costs that an investor, somebody that’s looking to do this, you need to be aware of? If you were to say, hey, these are the three most expensive things that can blow a project up, and you have to understand that before you go into this, what would you recommend?
Winston: I think engineering is going to be expensive. You need to understand the engineering fees if you’re going to change something. The bigger the project, the more they’re going to cost. If I was going to come in to do just a simple rezone from one lot to turn that one lot into two lots, that’s not too bad. You might get that for $5000, $6000, $10,000 depending on where you live. Here, I can get it for about $5000, have everything drawn up, and I can do all of that work myself. Once my engineer does their part, I can bring up the plan and zoning and separate it, so it’s not a big deal.
One thing you can do also though, if you got a piece of land in the area that allows you to do one acre lots and you’re buying five acres, you don’t have to really have permission to do that. It’s what it is. You can just have an engineer do it. You don’t have to go through planning and zoning or anybody else to approve it.
Engineering is an expensive cost, and you need to be careful with that. In the city I live in right now, they just went from no sprinkler systems at all in residential to you got to have sprinkler systems in a 400 square foot house. Sprinkler systems are expensive when you got to put them in. They’re not over the top expensive, but I just built a duplex. I think to put the sprinkler system in cost me about $4000, but to do what the water company required me to do to put that sprinklers system in cost me about another $8000. I had about $12,000 in total, putting a sprinkler system in the house.
That made my numbers not work really well. They still work. I can still do an infinite return on it, but it is not what I was looking for. I was looking for a lot better than that, but it is what it is. I already had the land, so I wasn’t going to sell the land. I was going to build the house. If I had to take a little bit less profit off of it, I just took the profit off of it. It’s a duplex, so I didn’t sell it. I’m still holding it.
Clint: What about the energy saving costs? Do you have that problem down there? I know up here in Washington state, the contractors that I’ve been talking to, the developers, that’s one thing that’s been blowing up their budget. They get involved in these projects, but now they have these new green energy requirements that have been placed upon them. Many times, the county or the city inspectors don’t even know how to apply them, but it increases all their costs for the materials.
Winston: The cities have no idea most of the time. Right here, they changed us from a category two to a category three, which required us to come in. We had to do blower door test on the houses. When you build a house, they put a blower door that sucks air out of the house. What they do at an infrared camera is they come in and they check everything, and they want to see what kind of leakage you got. If you go over a certain percentage, it doesn’t work.
You talk about rough, it is rough to make that house so airtight, and they make the houses so airtight, and then you got to come into your bathrooms. You got to put a humidistat in it. It turns your vent fan on to circulate air because the humidity gets to be too low. They are too high because your house doesn’t breathe anymore. What they do is they take that house, and they make that house where it’s able to grow a lot more mold. You really got to be careful in those houses.
In my opinion, I think that we cut our own throats with a lot of this energy stuff. I don’t live in a real cold climate. It might be different further up north, but where we are, it’s just not that bad to need that. They did that for one year. I built four houses during that one year, and I probably would have not built any more in this area with that on it. They came in, and so many contractors complained about it. They took it down to the next category. I think it took it down to a category back to two, and we didn’t have to worry about it any longer to do that.
When they come in and implement all the stuff, it really is expensive. If you’re in a state that is really green, and they’re really wanting everything to be airtight and all that stuff, they do it, but it affects everything. You get sick in your house. One person gets sick in your house, everybody gets sick in your house because your house doesn’t breathe at all. That’s my thing, and that’s just my opinion. I’m not an environmentalist.
Clint: Just walk into a plastic box with someone that’s sick, stay there for 24 hours, and see if you come back out sick.
Winston: That’s exactly right.
Clint: Crazy. Common sense doesn’t play anymore.
Winston: Construction costs has come down a lot though. We’re not getting that much construction costs anymore, but that was really bad two years ago in 2021. Oh, my goodness, it cost you so much to build a house. It just did not make any sense anymore.
Clint: You lead me right into my next question. What I’m hearing, and I’m listening to all this, is if I wanted to go out there and find a piece of land, and I know what that cost is going to be, what about the financing side of this? If you’re not financing it yourself with cash, where are you going to get financing? Where would you recommend someone do that?
Winston: I have never done a construction loan. For years and years, I self-funded everything. I sold my company in 2019. Now since 2019, the only income I get is what I make off of my real estate. I don’t get a paycheck anywhere else, I get paid for my real estate. As I was turning that, what I would do is I would borrow money.
Once I spent the money I had on the house on my business, on real estate, then what I did was I took, and instead of getting a construction loan, because I personally do not want to deal with a construction loan because I don’t want to deal with the coast people. I don’t want to deal with somebody coming in, then I can’t pay my contractors because the bank hasn’t done their inspection yet, and they won’t release the funds for me to pay my contractors.
What I have done on anything I’ve built that I needed money is I will go do a cash out and refi on another. I’m only leveraged on my portfolio about 23%, so I’m not highly leveraged at all. I will go pull equity out of one house to build the other house, and then I build the house with all cash. That is the main way that I do it.
I have only ever done one construction loan, and that was in 2011 that I did a construction loan. That was a personal residence, and it was just such a pain in the behind. I’ve just tried to stay away from it. I know that I’ve talked to my bank about construction loans. I don’t have a problem with them, but I have problem getting one. I just haven’t done it because I just rather pull it out of something else.
Clint: Yeah. For a lot of people who may be getting started, they have a personal residence, a home equity loan would be an option for them in order to help get this going. I always tell people, find a community bank, work with a community lender. They oftentimes are going to be easier to work with in putting deals together for you, especially on the construction side than going down to your big box bank, like Wells Fargo or Chase, because you’re just a number to them and not a person.
Winston: I deal with four separate banks. Every bank I deal with is a community bank. I can tell you that the more you deal with the same bank, the better your relationship gets, the better your relationship gets. Any of those banks, I could call them right now, and their people would come to my office and sit and talk with me. I don’t have to drive to their office, they’ll come to me. I love that type of relationship.
There was one time I was doing a job at a hospital in Nevada. I was there for about two months. I needed a couple hundred thousand dollars. I called my banker and he said, I’ll put the money in your bank today. I don’t even know how that works, but he put the money in my account that day.
It was two weeks before I got back to Nashville to be able to pull the money out of something else and move it over there to pay him off. Those relationships are huge. I’m not saying everybody’s going to get that treatment, but I’m saying that relationship expands the more you deal with them. The more they trust you, the more they know who you are and what you are. It’s a big deal.
Clint: That’s a great point. When you’re out there and you’re running these projects, are you using subs or are you serving as a general?
Winston: I am a general contractor. I’m a licensed general contractor, mechanical contractor, electrical contractor. I can do anything myself and pull permits. When I sold my company, I said, I don’t want employees anymore. I don’t want to deal with employees. You have 500, so you probably understand that a little bit, just a little bit. I just didn’t want the employees.
I will pull the permits. I typically hire a general contractor that I know around here that will do. He will even manage the subcontractors for me, I don’t even manage them. I will just go by the job once every couple of weeks and look at it. It’s not a big deal. He will also pull the premise for me.
That is another relationship based deal. I have a couple of different general contractors. I have a real good relationship with them. They will come in for 10%, 15% of the total cost. They’ll manage the whole project. I don’t have to show up on a job. That means a lot to me.
I know when I look at it, and they have people they have dealt with for 20 years, I can go out and build the same house that they can build. What I’m going to do is I’m going to hire people that I don’t have relationships with, so they’re not going to cut the pricing with me that they would cut it for him. He will do it. Even though I give him 15% to manage the job, I think I’m coming out at about the same amount of money. He builds a great house and I never have any issues.
We just had a house that we sold last year. When we sold the house, we got a one year inspection coming up. We got a warrant to the house for one year, so any nail pops or anything that they got this wrong, we got to fix. I called him up. I said, can you meet me over there? He said, yeah. He met me over there. We did a walkthrough, we met with the owner, and he had five little bitty things that needed to be done. Tim just went in there and fixed it. He fixed it all and it’s over, it’s done.
It really is not as difficult as everybody wants to make it. You got to hire the right people for sure. Do not go out there thinking that this is a get-rich-quick thing. It’s not. There’s a lot of gurus out there trying to sell it as a get-rich-quick. It doesn’t get rich quick.
You get rich real slow, but if you’re slow and steady, you can definitely do it. You always want to make sure you’re hiring the right people. Don’t go for the cheapest guy in the room, find out and get recommendations on it. Do some research on anybody you’re dealing with. It’s extremely important. It’s vital that you hire the right people. The wrong contractor will destroy you.
Clint: I’ve talked to a lot of real estate investors in my career. They lament about the bad contractor that they hired and they lost money with them. When I start asking them questions such as, did you get some referrals, did you follow up on those people that he’d done work for in the past and seeing how recent that was, and did you ask him for a list of 10 or 12 people and then you selected a few of those, because if you just ask for one or two referrals, they’re just going to give you the best people and they’re going to leave off. I always think that’s important. Is there anything else that you would say in selecting a contractor that maybe it’s not obvious to the investor, where you can find a contractor, may be screwed up or researching them?
Winston: If I’m going to hire a foundation guy and he’s going to do my foundation, pour concrete and everything for me, and he needs money after he digs the foundation, I’m not using him. I’m going to pay you when you do your job. If I’m going to hire a drywall guy, that drywall is going to take him a week to get it done, and he needs to draw halfway through that week, I’m not going to use that guy. I’m going to pay you when that’s done.
If I’m hiring somebody like the electrician, I will pay the electrician when the electrician does his rough in, but I will not pay him any more than that rough in. When he comes in and gets the final done, then I will pay him for the final. I have done some videos on that myself. Oh, my word, the hate that I get from contractors saying, we want money up front. If you give money to somebody up front, you’re a fool, because I can’t tell you how many people I know that they give money up front and they never come back. They never get the job done.
If you’re using somebody that’s got a hundred employees, you’re probably going to pay a lot of money. You’re somebody’s paying their overhead. Guess who it is, it’s you. I’m very cautious about that. I like to use smaller contractors, but I want a reputable contractor. I want a contractor that says, look, I’m going to do the job. When the electrician passes his rough end inspection, I’m going to pay him for the rough end. When he passes his final, I’m going to pay him for the final. When the drywall guy gets finished, I’m going to look at it, and I’m going to pay him for the drywall.
That’s just across the board. I would caution anybody that comes in and they’re using a contract that wants money up front. I’m going to buy the drywall on my accounts, so I don’t ask them to come in and buy the drywall. I will pay for the drywall and I will have the drywall delivered. They just got to carry their labor. That’s all they got to carry.
Clint: Yeah. That’s a great point. A lot of the people that I’ve dealt with that have got into disputes with contractors, that’s typically what happens. They give them the money up front before the work’s been completed. As you stated, they go and finish up the other job that they still haven’t finished up. They needed your money to do it, and that just starts snowballing. Before you know it, they just go radio silent on you.
Winston: Didn’t that a few years ago kill China?
Clint: What’s that?
Winston: Wasn’t that a big deal? What’s that, Enron? What’s that in China, the one in China just a couple of years ago because they were borrowing from project to project, everybody was prepaying for the house, and now hundreds of thousands of people, they gave them all up front.
Clint: They didn’t get their condos. Yeah.
Winston: No, they don’t get it. Framers are the worst because your framing package may cost you $30,000. I agree, they can’t front that money for the $30,000. They need to get paid for it. I’m going to go to wherever you’re buying your lumber from, and I’m going to pay those people. I’m not going to give you a check for $30,000.
Clint: Yeah. I used to frame when I was in college. The guy I worked for, yeah, he was hand to mouth. If I didn’t get paid the day I was supposed to get paid, I wasn’t going to be showing back up because I knew what was going to happen. I’d seen it happen. Besides that, are there any other mistakes the first time investor you think typically makes if they’re going down this road to build, that they’re really key that they need to be aware of?
Winston: I think good people. I’m around a lot of real estate people, and I meet very few real estate people that are not good people. We are a good band of people. Most of us, because we are trustworthy, we look at everybody else’s, that person is trustworthy too. I see that gets so many different people in trouble.
You can’t just trust what everybody says. You need to have a great written contract. The contracts I have are written by my attorney, so I don’t write up my own contracts. I have my attorney write everything up. I cover all my bases. I just don’t go out there and wing it. I think that is one of the biggest problems that people go out there and they wing it.
I got a family member that had somebody come in, and he had another family member go over and do some work on a remodel of his house while he was living in a different state. What happened was he retired, and the house was supposed to be done when he retired. He done paid all this money. When he went to his house, the family member never went and checked what the guy who did it. The guy didn’t do anything that he was supposed to do.
He come to find out, the guy’s hooked on drugs. He’s got nothing, he’s got no money. You’re just in trouble. You’re just in trouble at that point because you’re not getting your money back ever. It’s never coming back. That is a huge concern. Don’t give them money once, hey, I finished the framing, I need to get paid for it. Go look at the framing or have a framing inspection done on a house by the state or the city and make sure that it’s actually passes everything that you need to pass, because once you pay them, they may not come back.
Clint: I’ve told investors before that I’ve discussed this with that are just getting started in their own development, if they’re not using a bank, that they’re going to be pulling draws from, that’s going to be handling some of that for them to make sure the work’s progressing before the draws are being released, then at least hire a project manager. The pushback I get is, oh, that’s going to take more money off the deal. Yeah, but you’re going to learn so much from using that project manager the first few times that you’re not going to make those mistakes that can be catastrophic like you just brought up, and then you lose everything.
Making that initial investment in legal, like you talked about with your contracts, I would even say getting your business entity set up, so if something happens on the property, I had a client one time, he was a doctor, a retired physician, the first house he was doing, guy was killed. He was using a backhoe, swung the bucket, didn’t see the individual there, and clipped him. That was it. The next thing you know, he’s filing for bankruptcy. He lost everything because the property was in his own name. Those are the things that just happen in life. We need to make sure that you’re protecting your investment.
In today’s market, for investors, is there anything you’d like to say as we wrap this up to them about getting started, and then we’ll mention about your YouTube channel because that’s awesome? You just cut right to the chase and you help people along here, but what would you want to say to them that are watching this right now and they’re thinking about doing this?
Winston: One thing that you enlighten just now whenever you’re talking about carrying costs, a lot of people need to take that carrying cost into consideration on whatever they do. If you’re going to do a HELOC, then you really don’t have the carrying costs like you would if you go and do a—like I said, I just go to a refiling another house and get all the money at one time. I have to figure in my numbers, the carrying cost of that money for six months before I get it built and rented because I’m going to lose all of that money. I throw that money into my building costs. I said, okay, do the numbers work when I throw all this in the building costs? That’s one thing I want to make sure because I didn’t hit on that a second ago, but we definitely need to cover that.
When you and I first met, I didn’t have a single entity. Every single thing I own was in my personal name. I remember us sitting down and you saying, hold up, this is not going to work, we’ve got to get it fixed. We started setting up. We might’ve started out with eight entities or something like that. I don’t remember how many we started with, but it got it out of my name. It got me anonymity going through Nevada. Everything I’ve done since then, I reach out to you to make sure that it’s right.
That was definitely a big hole in my bucket at that particular point in time because I had a business with 70 employees that every time I turned around, I got sued. They get in a car wreck. I had one of my guys rearing at a paraplegic. The paraplegic sued me for the quality of their life because I ruined their quality of life. That’s life, and life is going to happen, so you need to protect yourself from that. Setting up the proper entities, getting all that in line is the most important thing you can do from every avenue. You got to do it from that avenue. If you’re married, cover your behind on anything. If you’re putting your money into it, just cover it because your whole family’s at stake.
Clint: Yup. I want them to go to your channel. What’s the name of your channel? I’ll put the link down below as well.
Winston: The name of the channel is Real Estate Template. We’re on TikTok, we’re on Instagram, I’m on Facebook, but that’s under The Real Estate Template, they have a The in front of that. I don’t know why, but that’s what it is. Basically, we just do simplistic stuff. If I’m building a house and I’m in the middle of some stuff right now, so I haven’t built anything in the last eight months, but when I’m building houses, I will do some type of a video on that house on a weekly basis on what we’ve gotten done this week. I will talk about stuff. We let people send us a message of what they want to see.
We just try and educate somebody that has no experience whatsoever. We want to bring you to a level that you would have the comfort to be able to go out there and start construction of a house, start a land development deal, or start any of that that you want to do. Whether you want to do a rehab or new, it doesn’t matter. We can help you through it.
From just real life experience, I’m not sugarcoating anybody anything, I’m not trying to tell you go get rich quick because it’s not going to happen. I’m telling you it’s going to be a slow process. I’m just transparent. If I screw up, I’ll just say, this is what I did, this is what happened, this is the repercussions of that. We continue like that. It’s a fun channel to do because my sense of humor is a little bit out there sometimes. I get a lot of comments on it.
Clint: Yeah, it’s a great channel. You give so many nuggets. For someone who is getting started or you’ve been investing for a while, I would highly encourage you to check out his channel. I subscribed to it. I follow it. There’s just, like you said, a lot of information there, so I appreciate the fact you do this because you don’t know what you don’t know. You’re educating people on, hey, I came up with this issue right here, and if you’re involved in this situation, this is how you handle it. I really appreciate that.
Winston: Everybody goes out there. A lot of people go out there and they think, I don’t know enough to do this, I don’t know enough to do that. We were talking earlier. I didn’t learn to read until I was 30 years old, but I started my first company when I was 24. I didn’t know a single thing about real estate when I got into real estate, but you just got to have the confidence that, you know what, somebody else can do this, so therefore I can do this also.
It’s a mindset. Entrepreneurs have a mindset of success, a mindset that it doesn’t matter. I don’t really care what rocks you throw at me. I’m going to find a way to catch them and do something, build a wall with it, or whatever. It’s not easy, but it’s not hard, but you just really do have to work. It does take a lot of work.
Clint: Yeah, it does. With that, thanks for coming on. We took a lot of time up here for this, but I think people are going to get a lot, if they suck through the end here, of information. I appreciate that. All the best.
Winston: Thank you so much for inviting me. Appreciate you.
Clint: Talk soon.
Winston: Yes. Bye.
