Unlocking Real Estate Success: Don Weatherby’s Journey & Key Insights

Dylan Silver (00:00.498)
Hey folks, welcome back to the show. I’m your host, Dylan Silver. And today on the show, I have developer and industrial developer investor, Don Weatherby. Don, welcome to the show.

Don Weatherby (00:13.039)
Yes, thank you very much. I appreciate it.

Dylan Silver (00:16.412)
I always like to start off at the top of the show by asking folks how they got into the real estate space. So Don, how’d you get into the real estate space?

Don Weatherby (00:25.487)
Well, we actually started out in the residential side, because that was the easiest to get into. I took my kids’ college fund. We raised about, my wife and I at that time had about, we collected about, you know, had about $50,000 saved up. And we said, instead of saving it for our kids’ college funds, let’s take it and go play in the real estate market. We’ll take that money and send them to college.

And so we took the $50,000 and invested it into First Residential Property. And we named the company MPI, Marshall Preston Isabella, because it was their college fund. So we named it after them. So we named it after them because that’s, and then we did, we bought and sold, we were in the residential flipping side way before it was cool. We got in way, you know, before all these TV shows and everything.

Dylan Silver (01:02.984)
Ha

Don Weatherby (01:18.382)
So we were buying houses for 30 grand and selling them for 70, $80,000. And we did 27 homes in one year. we kind of got to, and that was why my ex did 27. That’s why we are still running another business. I was in the plastic industry for years. And so anyway, decided commercial is where we really wanted to be. So we were building it up and the very first commercial property in 2008.

I asked this guy if he’d owner finance his land for me. He did. And the key to success in the industrial, I the commercial side is having a good banker. My banker sat me down. My banker sat me down, told me exactly how to do it with no money down, how to get it done. And we did it that way. Built one building, waited until I could build another one, built another one. And that first business park took me

Dylan Silver (01:58.685)
Sure.

Don Weatherby (02:16.002)
It was 60,000 square feet, it took me years to get there. And then once I sold that, it just took off.

Dylan Silver (02:23.08)
Don, do you come from a family of real estate entrepreneurs and how did you learn how to do this on your own?

Don Weatherby (02:30.446)
I didn’t know my family, I come from a lower middle class family. My parents, don’t get me wrong, I we had what we needed to have, but my dad and mom were never into real estate. were buying it. They used to buy a house, fix it up and sell it, but that’s all they did. We moved like 20 times when I was growing up. overall, no. My best friend’s dad was into this back in the 70s, did this.

And I was listening to him talk one time when I was in high school about what he did and how he financed everything. And he said he just waited two or three months with cashflow and built another one. And I said, wow. So from high school is a time I knew I wanted to do this particular area.

Dylan Silver (03:18.674)
And so when you’re doing flips, I’ve seen of course many flips go really well and then as people are starting out, you sometimes see flips that don’t go so well. And you’re doing so many, are you also the general contractor overseeing these flips? Are you partnering with someone? Are you hiring it out? How is that going?

Don Weatherby (03:39.019)
No, I do my own designing of the complex. I do my own layout. I don’t do the architectural plans. I do it myself. It’s all self-taught. So everything I’ve done is self-taught. All I do is I find the elevation out and then I design the park from there.

Dylan Silver (03:53.864)
Wow.

Dylan Silver (04:03.614)
Pivoting to the the industrial and the commercial space, I’ve heard both of these terms. I mentioned before hopping on here that I’ve had investors on the show who specialize in industrial, but it seems like there’s a difference between industrial and commercial. Can you break this down for us?

Don Weatherby (04:20.396)
Well, commercial is basically anything in the, I mean, you can do retail, you do office buildings, you can do just big, huge commercial buildings. You know what I’m saying? I mean, that’s what I would call commercial. What I call industrial is metal buildings or tilt wall for manufacturing purposes or small business owners. That’s what I call it.

Dylan Silver (04:46.11)
And so the industrial space, is this a lot of warehouses? Would warehouses be industrial?

Don Weatherby (04:54.827)
Yes, that’s what I would call industrial.

Dylan Silver (04:56.476)
And so specifically in Texas and the deals that you’ve done, is there like an avatar of an ideal tenant or is there a business sect that is a big heavily involved in this space or is it really dependent on the area that you’re sourcing the deal in and so on and so forth?

Don Weatherby (05:19.456)
I find out that it’s mainly the areas I’m building in on different type of clients. I’ve had everything from plumbers to churches that lease out my buildings. So it’s about everything.

Dylan Silver (05:36.7)
Now, when you’re going through this process, when you’re sourcing a deal, are you thinking about who’s going to be renting it out initially? Or are you making sure that the building is up to where you want it to be? And then once it’s completed, now you’re looking for the tenant.

Don Weatherby (05:37.109)
And some people even live at them.

Don Weatherby (05:55.604)
No, before I buy a piece of land, I do my research on what’s around it. And there’s a lot of small time business owners that started out in their house. I’m looking for those type of people. They’re moving out of their house into a warehouse. The wife has kicked them out.

Too much, you know, these are small business owners or car dealerships or plumbers or electricians or You know paintless dent remare remove people churches karate studios It’s just people that were starting their businesses is who I deal with not if good

Dylan Silver (06:39.998)
And so, when you’re finding these individuals, is it a situation where they’re having to come to you, or are you having to go to them, or is it a little bit of both?

Don Weatherby (06:53.599)
No, they come to me.

Dylan Silver (06:55.164)
Okay, and so how does one find tenants for an industrial park?

Don Weatherby (07:01.919)
There’s many ways. First of all, you put signs up now leasing, you know what saying? There’s LoopNet, there’s MLS with the residential reals, know, the MLS listings. There’s Facebook, there’s all sorts of different types of way of advertising.

Dylan Silver (07:19.794)
And so going from you mentioned starting in single family doing fix and flips to then industrial, was that a big shift and was it natural? Was there some hurdles along the way or, you know, how did that process come about?

Don Weatherby (07:32.329)
Well, it’s a big shift because you’re dealing with a house that’s $50,000 versus a million dollars. It’s a big gamble and you got to build them right. You got to figure it out. The first one, I I overbuilt it. I put really nice stuff in, put curbs up, did all this, put fancy trim molding around, did all that. That didn’t make me a dime more.

So you gotta know your audience and what you’re catering to.

Dylan Silver (08:09.054)
And so I can imagine that when you’re talking about catering to the audience, when you’re buying a deal, in some cases I’m imagining maybe there’s already something there that you’re having to rehab. In other cases, you’re doing ground up builds. Is that true or is it you’re always doing rehabs?

Don Weatherby (08:27.913)
No, in the industrial, what I’m doing now? no, all of mine are rebuilt, new book, new builds. Everything I do is new.

Dylan Silver (08:30.268)
Yeah.

only new builds. And so when you’re putting up a new build, like you mentioned, Don, there’s a huge gamble there, right? Because you’re putting up a lot of, it’s not a single family home, right? And so what’s the, I would say the groundwork, so to speak, that goes into surveying, well, what do I need to have this outfitted for? Or is that not really something that comes into play because

Don Weatherby (08:46.803)
Right.

Dylan Silver (09:01.798)
It’s kind of a one size fits all. A church can come in here, a plumber can come in here, or are you doing some of that groundwork figuring out, what are the potential businesses that might come into this park here?

Don Weatherby (09:14.002)
Yes, I always look with what type of potential business that will come around. What will be in there? I do do that all the time. So I’m always trying to figure out where this property is. For example, one property I have is built just for, I went after just the automotive people. That’s what I built a park for because there was a need for it. And that one is filling up so fast.

Dylan Silver (09:22.567)
And how-

Don Weatherby (09:42.538)
It’s, you know what saying? it’s, they, mean, I’ve just finished, I just finished the last building, the last building last week, just got final approval. And I already have three more renters coming into that one. I’ll have that park full before, before a month.

Dylan Silver (10:04.51)
So automotive space, come from the automotive space. I sold cars for years. I worked for Nissan before I got into real estate. And when I’m thinking about an industrial park automotive, I’m thinking about maybe hydraulic lifts and having it outfitted with that sort of thing. What were the factors or the ways that you outfitted the industrial park for the automotive space?

Don Weatherby (10:29.929)
Well, I knew they’d bring in lifts and stuff, so I put in a little thicker concrete on that and those buildings on the slabs and stuff. And then if you’re going after just light plumber, I your plumber’s construction people, I don’t go as thick, so I save a little money there, know, things like that.

Dylan Silver (10:39.859)
Right.

Don Weatherby (10:53.787)
Add extra parking when I go into the automotive areas. I add extra parking. I add extra things like that for them so the park is not so crowded.

Dylan Silver (11:06.014)
Don, if you reflect on your time before you got into industrial with the single family homes, the fix and flips, do you feel like that helped color and prepare you for the industrial space or do you feel like they’re two totally different animals?

Don Weatherby (11:21.385)
No, it was a vehicle to get me to where I’m at now. You know what saying? I wouldn’t have been able jump right into the industrial because I didn’t know enough about everything. so now, I mean like right now I have my son, he works for me, Marshall, he builds everything. My daughter leases and manages the properties. So I’m teaching them how to do.

The same thing, we all three agree on properties. We’re in the market right now buying three more properties. And I always want to have about four or five parks going at one time.

Dylan Silver (12:01.096)
So, family’s in the business now. The people that you sent to school are now in the business.

Don Weatherby (12:06.031)
Yet they didn’t need a college degree, but I still paid for it. Yes. Yes.

Dylan Silver (12:10.578)
That’s a wonderful thing. I always tell people how great would it be if you have your kids and maybe one of them wants to go be an attorney, maybe one of them wants to go be an engineer. All that’s possible in the real estate space. You need real estate attorneys. need sometimes mechanical engineers or industrial engineers.

Don Weatherby (12:30.758)
That or I told him at least marry somebody like that. I need an accountant and I need lawyer, so please marry somebody like that if y’all don’t, if you’re not gonna be that person. That’s exactly right, always need a lawyer. Always need a real estate lawyer in this business.

Dylan Silver (12:33.598)
Ha ha ha!

Dylan Silver (12:42.718)
Don when you as your business was expanding were you very keen on these aspects that we’re talking about right now like having these strategic relationships or did these things come really with time and along the way I know a lot of people don’t even think for instance about like tax strategy until they have a big tax bill today or until you know their business has grown to a certain point was that something that was really important for you early on and

How did you make these relationships?

Don Weatherby (13:15.28)
No, that wasn’t really, the tax relationship wasn’t really, but I’ve always had a very good banker. I’ve done that one from day one. And I’ve always had a good accountant where they kind of guide me in the right direction. But accountant’s for the back end of it. And so, they don’t plan your future. They’re always taking care of the back end. But I’ve always had a good, my good friends are my insurance agent and my lawyers.

Dylan Silver (13:45.174)
huge. Those are huge. I just had a public adjuster on the show yesterday. I learned all about that. And you know, it’s interesting because I think for me, at least, then I’m on the infancy of my real estate journey. If I could have swapped the time that I spent trying to learn a lot of the X’s and O’s the logistical components of like for what I’m doing real estate wholesale, and instead just started networking with people and really put a lot of effort into that initially.

Don Weatherby (13:50.78)
Yeah.

Dylan Silver (14:13.736)
whereas I wasn’t so comfortable with that. I think I would have really sped up the learning curve. What’s your perspective on that as far as relationships in the real estate space? How important is relationships to you and your business?

Don Weatherby (14:26.981)
Well, when I first started out, when I got out of college, I wanted to be in the real estate world. I didn’t know anything about it. So in my mind, I said, okay, where do the big players hang out at? The courthouse steps or whatever. So I went down to the tax office back before computers and asked the tax ladies who’s the biggest real estate players in town. Residential. They pointed out several of them.

and they showed me and I studied him. You couldn’t look anything up back then because we didn’t have Google. You know what saying? Everything was by, so I looked everything up manually. Then I said, where do they hang out at? They hung out at the courthouse steps on foreclosures and stuff. So I went to the courthouse for months, walk around, introduced myself, and finally I found somebody, found one of them, and I asked him if he would show me the ropes. He took me back to his office, spent a lot of time with me.

told me what to do, what not to do, where to play at, what type of market to play in. And he said, play in the low income or the high income. Don’t play in the middle market because you’re not gonna make any money. And so, well, they were back then, now they’re not. I mean, now everybody is in on, I mean, yeah, really, when I was there, I was only one on the courthouse steps. I mean, so now everybody’s fighting on them, you know what I’m saying?

Dylan Silver (15:39.966)
Those foreclosure options are amazing.

Dylan Silver (15:46.844)
Yeah.

Dylan Silver (15:52.252)
Everyone’s gone, yeah.

Don Weatherby (15:53.691)
The game has changed a lot in that whole industry, you know? But that was back right when I was probably 28, 29 years old. I found a mentor. And that’s what I’m doing right now. really kind of, like to be, I’ve helped out several young people on what to do and kind of show them the ropes. And one young flipper like you, a wholesaler, he called me and kept on asking me about one of my properties. I said, okay, look,

I don’t want to sell it. I said, make me an offer, blah, blah, blah. And then we kind of started to it off and we met and he calls me all the time for questions and stuff. And I kind of got him in the way and direction and what to do. And he called me the other day and said, Hey, this commercial property, I can buy it for this. Is it worth it? And I looked at it and told him, no, I wouldn’t do it. If it’s my money, I wouldn’t do it. And so he didn’t do it. so, you know, there’s, I,

Dylan Silver (16:46.536)
Don’t do it. Yeah.

Don Weatherby (16:52.26)
I like to try to give back to the young people and show them how to do it. Because I tell you one thing, if I had to do it over, I’m telling my kids not what to do. I mean, I’m telling them, hey, look, these are the mistakes you don’t want to make. I’ve already made them. Don’t go down that road. I don’t care what direction you go. Just don’t do this and this and this. I’m telling them what not to

Dylan Silver (17:12.894)
The real estate game, Don, think is, I mean, if you’re gonna pick something to build wealth in, I don’t know if there’s a better opportunity. And I’ve done other things.

Don Weatherby (17:24.614)
Well, there is, I have a good buddy. I have two good buddies. One played only in the stock market and I’ve asked him to be into one of my properties. Oh, get this one. I said, hey, you want to be my 50-50 partner? He’s my 40-year friend. mean, been friends 40 years. He’s my real estate agent. I said, dude, I got this opportunity. You buy the land for $280,000 and I’ll build it and we’ll be 50-50 partners. No, Don, I don’t have it. He hauled it around. I offer only one time.

Dylan Silver (17:38.206)
Yeah.

Don Weatherby (17:55.341)
I went home that night, called my cousin and said, hey, I got this opportunity. You want to do it? Yep. They wired the money to me. I bought the land. Five years later, you know what I have it, you know what the land is appraised for right now?

Dylan Silver (18:05.574)
I can’t even imagine. You bought it for $250?

Don Weatherby (18:07.654)
$8 million. $280,000 and it’s appraised at $8 million. Yeah, so my friend kicks himself in the butt every time. Now, you know, we built, oh, it’s an Alvarado. It was an Alvarado, but no, was a warehouse, laying, a row laying, and we built, but I we owe like $2.5 million, but still $4 million windfall. Yeah, on a $280,000 investment, we haven’t put a dime into it since.

Dylan Silver (18:13.273)
my gosh.

Dylan Silver (18:19.154)
Where was this deal?

Okay.

Dylan Silver (18:37.512)
Don, going from, I mean, I’ve only really spoken with two or three people in the industrial space, so it’s very niche, right? But getting into that space and then educating yourself, what tools did you have at your disposal? Was there mentorship or was it really kind of grab the bull by the horns?

Don Weatherby (18:54.54)
No, was just, was that one, my best, my good friend’s dad sat me down one time and told me how he did it. And that’s all the training I had. The very first building I saw, the very first building I hired a general contractor. I saw what he did, took notes and I built my next one.

Dylan Silver (19:20.264)
Was there any level, I mean, I can imagine there had to be some level of of worry during that first deal like, wow, this is a big step.

Don Weatherby (19:29.621)
yeah, yeah. The first step back in 08, I took out was a half a million dollar loan. Yes. When you weren’t making that kind of money. Yeah, big deal. Yeah.

Dylan Silver (19:39.676)
And so walk us through the highs of getting that deal done and then finding the tenants. What was it like? Walk us through that.

Don Weatherby (19:51.365)
Well, it was very stressful because also you remember 2008 is when the market crashed also. So we had to figure out how and we built it good enough where I could lower my rents all the way down to like $600 a month and it made money. I mean, it just covered my bills. And then after, as it slowly took off, this started building and then we built the next building and then built the next one. you know, the, the pressures.

Dylan Silver (19:56.444)
Yeah.

Don Weatherby (20:21.888)
of making that payment. I mean, look, when you’re borrowing two or three million dollars right now, my payments on one complex is $28,000 a month. So, you have a hiccup while you have a hiccup or something. But I’m a very conservative biller. I don’t take chances that I would not be willing to, that I’m not 100 % positive that it’s gonna work. So, like, one park right now is moving real slow.

Dylan Silver (20:33.15)
That’s right.

Don Weatherby (20:51.524)
So I’ve only built two buildings. I’m gonna let it rent out up to where it covers the note payment. And I’m gonna get three renters in there this week. Once I do that, then I’ll break ground on my next building. And I have some investors in, I have some friends that asked me to be involved in these. I treat their money just like my money. I’m not gonna take unrisked, I’m 62 years old, I don’t wanna take any unrisked.

Very, very, very risk-free opportunities. How about that? I don’t want to gamble.

Dylan Silver (21:23.772)
Yeah, you got to be a little conservative when I especially I think a lot of people kind of romanticize these spaces commercial industrial, right? There’s the leverage there, but there’s also the the other side. I’m sure you being in this space for a while have seen people lose their shirt on these deals.

Don Weatherby (21:40.964)
Yes. And there will be some more too. Because a lot of these investors are buying these properties at top dollar. Now, but I mean, I’m selling them. So I better shut up there. I need those guys. Yes, I need those. Okay.

Dylan Silver (21:56.318)
We need them.

We need them, Don, we are coming up on time here. Where can folks go to get a hold of you,

Don Weatherby (22:09.843)
They can look at my websites, weatherbybusinessparks.com. Weatherbybusinessparks.com. They can get my contact information there and everything, okay?

Dylan Silver (22:18.76)
Don, thank you.

Dylan Silver (22:22.664)
Thank you so much for coming on the show here today, Don.

Don Weatherby (22:25.845)
I appreciate it. Thank you so much too.