Building a $29M Community Retail Center That Will Transform His Texas Hometown

Tim Dowling (00:00)
I’ll tell you, even on this retail project, we had, you know, and we mentioned money’s hard because the economy and such, we had a— a really cool loan partner that said, “Hey, we’d love to do this with you. Let’s keep it so we can keep it on path, exactly hit all the goals.” We— we danced with them for… it ended up being almost six months. And everything was great. We spent, you know, 300 grand on legal fees and all their everything else getting it all set up. At the last second, the rug got pulled.

Joseph Crooms (02:01)
Hey everyone, welcome to Investor Fuel Real Estate Pros Podcast. And I am your host, Joseph Crooms. Today I’m joined by someone I’ve been looking forward to who’s been very patient with me. And I want to say thank you in advance to Tim Dowling. He’s making some serious moves. He’s been in real estate business for quite a while, but he’s moving into development space. So Tim, say hello to everybody.

Tim Dowling (02:28)
Hello everybody! And Joseph, thanks so much for having me on the— on the call.

Joseph Crooms (02:32)
I think our listeners are really going to take away something— some from what you’ve been up— how you’ve been approaching business. I’m going to start in the real estate and get into the development, so let’s dive into it. So first off, for people who may not be familiar with your world, Tim, give us the short version. What’s your main focus these days, and what markets are you marketing— are you operating in?

Tim Dowling (02:56)
Gotcha. So I’m in— right down on the south side of Austin, for those that are familiar, in a little town called Buda. I am currently building and broke ground on a sixty-four-thousand-square-foot retail space in— in the center of the town, because it— I’m doing it in partnership also with the city of Buda and— and our Buda EDC, our Economic Development Corporation. We’re basic— with the— not basically, we are creating a community center. There was a lot of money leaving town because of lack of retail, so they’re supporting what I’m creating. Having an absolute blast with it. But we… yeah, it’s— the exciting— the most exciting thing is seeing the ground break just about three weeks ago. Very exciting.

Joseph Crooms (03:41)
Congratulations on that. Before we go into that, Tim, let’s talk about your real estate experience. What brought you into the development in?

Tim Dowling (03:51)
You know, it— it— it’s a… life is a progression of building blocks. I got into real estate about a quarter century ago, and I was doing single family. I never even understood the concept of commercial. I— I ended up with a huge HUD contract where I was selling back in ’08 when the— the— the— the big fall. I was selling homes of, you know, foreclosure-type properties. And then from that, I started transitioning, saying, I s— I— I would… I don’t know about you, Joseph, Rich Dad Poor Dad book, Cashflow Quadrant— that’s my Bible. I don’t know about you. That— that was the one that hit it for me. And I think most of us in the investor space, it was one of his books— like, it just finally spoke to you. Is that the case for you? I’m just curious.

Joseph Crooms (04:36)
I— I have re-read Rich Dad Poor Dad, and you know that’s the journey. What caught your attention, and how did it spark you?

Tim Dowling (04:44)
You know, it’s— it was the realization of— of understanding and thinking about investments, you know, money working while you’re not, and so it… and then how to compound it. And so from it, I s— I, you know, I was focused in on single family. So I ended up with… I ended up with about a hundred different doorways. And— and then it was the realization is, “Okay, wait. I— I can play this a lot differently.” So then I started going… I was thinking more doors under less roof. So then I was going… I went multifamily. I ended up in the RV park space, the mobile home space, and it was just this constant trans— you know, addition to it where, “Hey, I could build something for… and make sense of something more than I can buying someone else’s stuff.”

And— and so I’m in the process of actually building also an apartment complex— we’ll be breaking ground on in about seven months. But my main focus right now is this retail center. But it was— it was purely a tr— just a progression of— of knowledge a— and opportunities, and it’s putting yourself in the right room with the right people. And— and you know, for me, you know, I— I had to get people that had a lot of experience building from the ground up, and I found those right partners so that we’re all able to do it together.

Joseph Crooms (06:48)
Let’s stay a few minutes more before we get into that, because I— I— I think it’s very interesting. What was your revenue or volume of houses that you said, “Okay, now I can move into the— the— the to development in”?

Tim Dowling (07:02)
Do you know, honestly, it— it— it had… it— th— everywhere I made money on the single-family side, it was on the sale. I— I, you know, the cash flow everyone talks about, the reality for me was it did… it— it was there, but it was more of a buffer for when things went wrong. And then with taxes continually increasing, and— and insurance increasing, I never really made a lot… you know, I didn’t have it where it was just a steady stream. It was just keeping that foundation together. But when I was exiting, I was doing 1031s, and I just kept on getting bigger and bigger and bigger. And— and it was that realization, though, of once I got to that next stage where, you know, like apartments, depreciation’s a killer. You know, if you’re a real estate professional, you get into the property and you— you do have that cash flow. You still have a lot of things you’re working through— just insurance, taxes— but then you have that— that depreciation just compounding, where it’s just eliminating your— your— your taxes because you’re doing something that the government wants you to do, and they’re supporting you to do so. So it was— it was a progression. I don’t know if there was a dollar amount ever that hit. It was more of, “Why am I thinking so small?”

Joseph Crooms (08:13)
Mm-hmm. Mm-hmm. And what was the— your top volume of sales and flips that you— that you reached?

Tim Dowling (08:18)
You know, it— it was… I— I’ve never… I— I— I can’t say I never flipped houses, ’cause I helped others do it and I was a partner in— in some of… you know, as a realtor, I— I actually… it was insane. I mean, I was selling… helping people buy and sell typically anywhere from seventy-five to a hundred homes a year. And then on top of that, I was sort of… that’s when I was just picking off and buying investment properties when I saw opportunities. I— I— I was always the guy that I bought… I— I joke around, I buy broken homes. So, you know, the broken foundation, the broken this and that. And I was able to restore it, and then I’d keep it for a few years for tax purposes. Then I would take it, and then once again that 1031, and then I was moving to duplexes and— and such. Only thing I skipped was fourplexes— I don’t— I don’t like fourplexes, I guess. So— but beyond that, I just… it just c— it was just an evolution of, once again, it was, “Hey, how can I take it to the next level?” And— and you know, but I’ve always been an active guy, an a— a, you know, investor. I do dream one day of going to the passive side, but right now I’ve got all my chips on the table with my two big projects.

Joseph Crooms (09:31)
Can you explain to me what the 1031 is? And the second question, so how many on there… when you were a real estate investor, how many deals did you probably do? What was your maximum in the last, I guess, two years?

Tim Dowling (09:45)
Well, should… like, I… yeah, honestly, last two years I have completely disengaged. It started four years ago where I got deep into development, and— and everything I get, I refer outside of, because I don’t have… my— the jobs I have, I’m— I’m leading the way on— on both projects. And so with all the pieces of it, it’s, you know, marketing functions, capital raising functions, managing all the trades. So, you know, my partners and I all work through it, but no, I haven’t… in terms of traditional stuff, I— I— I’m out. I’m out of the game. I just got my renewal for my broker’s license— I— I finished that last night. So, ’cause it’s a handy thing to have.

Joseph Crooms (10:20)
Well, okay. And what did you mean… can you explain what a 1031…

Tim Dowling (11:07)
You betcha. You know, it— it’s— it’s— it’s a really cool piece. It’s, you know, taking a… well, I’ll tell you about my first one and how it— what it means. So I bought a house that was a hoarder home. I bought it for 80,000 bucks. I put 20 into it, put a tenant in there for two years. Tenant moves out, I look at the walls like, “What happened?” So I decide I, “Okay, I gotta paint the walls, but what if I just redo that kitchen?” So I redid the kitchen and the paint for another ten grand— I was in it for a hundred and ten. I sell it for two-twenty. But what I— instead of a traditional sale where now I’m gonna have to pay the tax man his piece, I defer my taxes till a later date. I did a 1031. I use the money from that— the proceeds— because I had originally bought it with cash. So now I’m into… I, you know, get a check for two hundred and nineteen. I n— I never saw it— it went through the— the intermediary.

But what I did is I took the funds and I bought two duplexes. And so I… but I just moved it over, but the tax man had to wait till a later date. And so then it’s a compounding effect where if I had to give up, let’s say, you know, thirty thousand dollars to the tax man, that’s thirty thousand less of buying power. Where with the 1031 exchange and how it works, I just took it and moved it to a different type of investment property and just kept on building it. And actually, funny enough, one of those duplexes ended up becoming my first apartment complex— it was a 60-unit in— in Houston. So compounding is incredible.

Joseph Crooms (12:35)
So let’s go back to your develop— now we can shift to your development.

Tim Dowling (12:39)
Keep the show.

Joseph Crooms (12:40)
Four years ago, how did you enter into the business?

Tim Dowling (12:43)
It— it— it was one of those situations I think it happens in life: it’s right place, right time, right people. I have partners that actually have been… one of them that owns this tract of land, they’ve got a bar up on the front side. He has an extra six and a half acres on the back. He’s been a realtor of mine for almost twenty years. He was like, “What do you think the highest and best use is?” And so I was giving him suggestions and I was telling him who he should meet with and talk to in different avenues. Is— is it apartments? Is it small homes or tiny homes? Is it, you know, do you… what do you do?

And anyway, what ended up coming about is after talking for about six months and me just kind of helping coach them through, they were like, “Hey, why don’t you join us and we’ll figure it out together?” So that’s how I jumped in. It was actually… it ended up being four and a half years ago now that I think about it. And so we started an apartment project in South Austin. It— but, you know, we had a ton of stuff happen where we’ve just slowed down the process. We’re fully permitted, but right now we’re bringing it downward in terms of size because we built it for the old economy, not the new economy. We were doing four hundred and thirty-one units; now we’re redesigning for two hundred and eighty-seven ’cause that’s in many more people’s buy box. Because we don’t know if we’re… once we finish, are we gonna keep it ourselves or are we gonna sell it? We— so we’re positioning everything to always think about selling so that no matter what we do, we’re gonna be in a right position. So it was place and time.

Joseph Crooms (14:14)
Thank you for sharing that. So, and now you’re in the development business four years. How much volume have you— have you guys moved?

Tim Dowling (14:22)
Yeah, well, it’s— it’s… I have two main projects. That’s my whole focus. One’s that apartment complex, and the other one… it’s funny enough, what was the purpose, what we were gonna do talking about 1031s… the apartment deal, we were gonna… we were having a lot of proceeds come out of that. We were gonna do a 1031. My partners own nine to ten restaurants and bars around town. And so they were looking at different places to rent. I was like, “Hey guys, let me take that money. Let’s go buy some land. Let’s— let’s build your own place, be the landlord and the tenant, and then we can create some other buildings for other tenants.” And so our— our original goal was to take the money and just slow-build it. We ended up buying 18 acres right in my little hometown of Buda, which— which is about… well, I— everything I do is within 12 miles of my front door. And so it’s— it… I don’t… I— I know this area and I know it deep. And instead of having to go learn somewhere else, I’m focusing on what I know.

So anyway, we were just gonna slow-build it. And then what ended up happening is because the economy took a turn, the, you know, COVID hit, everything else… what we— that we weren’t able to close on the sale of the land for the— the— with the apartments. And so we’ve just kind of pushed it back. So then with the— the— this whole retail, we started off with three acres, and we were like, once again, I was just gonna do it with our money and slowly build it, and then we ended up with this extra acreage. But what happened is there was this whole ‘nother fifteen acres next to our three acres. And I started that meetup— a meetup in my area is for commercial development. And I started it during COVID at the end of it to… and the whole purpose was, I— is, let’s go and see if we can get city officials to tell us what they need, and if we can do it, let’s go for it.

And so what ended up is that I found out this huge vacancy or huge hole in the market for retail. And that’s what my partners do all the time. So we are ended up, you know, we’re building a 64,000-square-foot retail center on 18 and a half acres. And as I mentioned, with the partnership with the city and the EDC. So in terms of volume of turning them over, these are the type of projects you don’t turn volumes. These are— these are slow plays. The— the retail project is actually… it’s two— and it took me two and a half years to get to the point of breaking ground, you know, ’cause you have to do all the— all— all the permitting, all the environmental, the, you know, and then once again, bank the money is hard. So it took us a while to get all of our— our finances secured for the project.

So it’s— it’s really long, slow runs. But where— when I bring people in, it’s after we’ve already de-risked the project. We’ve— we know that we can do what we want to do, and then it’s, “Hey, let me bring people in,” because like what I’m doing for— for both of them are 506(c)s with for accredited investors with the SEC. So I get to talk about it as much as I want. But it— it was… yeah, these are— these are massive projects. Total price dollar on my multifamily, I think it’s gonna be seventy-four million; my retail is twenty-nine million. So I’ve got all my cards and— and or my chips on the table, and this is all I do every day, all day long.

Joseph Crooms (18:21)
Gotcha. Tim, when do you expect a return on your investment?

Tim Dowling (18:26)
You know, for the— the— the retail is an easier one to know because I’ve already broken ground. You know, phase one is off to the races. It’s gonna take us ten to eleven months to build the shell. Tenant moves in, tenant takes four to five months to— to— to get themselves set and play, and we start having rent get paid. We should start seeing returns on phase one probably at about month sixteen. Phase two is kicking off in about six to nine months from now. So the reality is, the— the best way to think of it is it’s a three-year cycle for both phases to be complete, filled up, and then we’re at that position where we have the cash flow coming in. We’re going to either refi it, and you know, we have investors that might want to get out, we’ll pay them out, whatever. You know, we’ve all kind of come up with terms of what— what makes sense. If we’re able to, though, we’d like to own it long term, because the long-term cash flow is incredible. Plus, once again, you know, depreciation, being able to, you know, have these huge markoffs on your taxes… it’s— it’s like your double— your double-edged sword of income. So three years for this project, and probably four years for my apartment project before paydays come.

Joseph Crooms (19:34)
This is sort of a— a— a sideways question, but it’s really… I think it’s important to you guys. What is that gonna do for your community?

Tim Dowling (19:42)
Man, it’s cool. Just… yeah, that one you hit me. You know, it’s— it… I’ve lived here in— in my area for twenty-one years. And from… I— I don’t know about you, before COVID changed a lot of your— of everyone’s thinking and— and how you want to live life. For me, it took me out of my— my glass castle on top of a mountain that I didn’t want to talk to people, to being, “Hey man, my community’s kind of cool.” And— and so once we found out about this huge gap and the city saying, “Hey, we need a community center. We don’t have any place for anybody under the age of 18 to go. We need somewhere to keep families in.” They were losing 237 million dollars a year for money leaving town, going to other retail. So they said, “Help us build this and let’s make a community center.”

So I’m connecting it with… I have a walking path coming off my back that we’re putting a bridge on a creek that leads to almost five thousand homes that can just walk right over to our center. We’ve got pickleball, we’ve got volleyball, we’ve got a stage. And so because, once again, my partners are in the restaurant business, it’s like we can do that. And— but it’s— it’s— it’s gonna be… it’s one of those opportunities in life where you truly get to create a legacy. And it just feels good. And— and so I can’t tell you how excited I am to as it continues to progress. I’ll be at the site later today. They’re ripping around the dirt, getting our— the— the foundations ready to start preparing them to pour concrete. But man, it’s— it… the community is so excited. I mean, one of the places we’re opening is an Irish pub. Everybody wants to go to an Irish pub! And my partners own one right now in South Austin that does really well, so we’re adding that… another one of those to our site. So it’s— it’s exciting because I know I’m creating a legacy that’s going to outlive me. And— and— and I think that’s incredible.

Joseph Crooms (21:30)
Thank you for Tim for sharing that, Tim. Yeah, I thought you would appreciate that question.

Tim Dowling (21:34)
No, I did, and you got me.

Joseph Crooms (21:38)
Listen, now— now I’m gonna hit you with another one, okay? Okay. Every operator I know has a moment when things just got real. Yes. Maybe a deal that went sideways, or a time that you had fast. You mind sharing one of those moves?

Tim Dowling (21:41)
Okay, okay, okay. Yeah. Yeah, you know, I’ll tell you, even on this retail project, we had, you know, and we mentioned money’s hard because the economy and such, we had a— a really cool loan partner that said, “Hey, we’d love to do this with you. Let’s keep it so we can keep it on path, exactly hit all the goals.” We— we danced with them for… it ended up being almost six months. And everything was great. We spent, you know, 300 grand on legal fees and all their everything else getting it all set up. At the last second, the rug got pulled.

And you know, and that is hard. And is I— it’s like, okay, shift, shift, shift. What am I… what’s my next step? And— and you know, lucky enough, we had some other capital partners we were able to pull in and make it all work. But I can tell you, man, having a rug pulled like that, it hurts. I ever… ever… I don’t know, Joseph, if you’ve ever done any kind of developing, there is— there’s a lot of pain every day. There’s a lot of wins and there’s a lot of pains. I— I— I call it’s like I… everything’s rocking and rolling, and here comes that wrench across the back of my leg. And— and it’s just y— you— you take the sh— you take the hit, shake it off, and you keep playing forward. But that one rib with the rug was— that was a big one.

Joseph Crooms (23:00)
Glad you kicked it off, Tim. Got another question for you. That’s the kind of stuff people don’t talk about enough, and I— it’s what separates folks from who just dabble from the folks who stay in the game. Let me ask you: what are you focused on solving and scaling next? What’s the next real goal for you?

Tim Dowling (23:03)
Yes, sir. You know, my— honestly, it— it— it’s continuation of… I found the community where I live, and I mentioned I only— I only do anything from twelve miles from my front door because it’s— I know it so deep. Is it’s continuing to do what’s right for the community, at the same time it is making the investors a nice paycheck. So it’s— it’s— it’s actually having impact on the place you live and the people that are— that surround you. And so it’s— it’s— it gonna be a continuation of that, because with my retail site, you know, I mentioned sixty-four thousand square foot, so we’re gonna have a lot of tenants. Well, my partners and I, we’re gonna open up two restaurants, and so that’s gonna be its own entire mountains to— to— to climb in the process. And so it— it’s— it’s just continuation of doing good things. Now, beyond that, Joseph, I’m gonna be honest with you, after these projects, I don’t know if I’m done, or people tell me that I’m an idiot, there’s no way in hell… there’s— I enjoy it too much. And I say, “You don’t understand.” So I don’t know yet. We’ll see. We’ll see what happens.

Joseph Crooms (24:24)
All right. The next you can either compound things, Tim, or create chaos, depending on how you play it. Now I know a lot of people are listening or early in their journey, looking to level up. I think they’ll benefit from this question. When it comes to building relationships and growing your network, what’s made the biggest difference for you?

Tim Dowling (24:45)
Listening. Easy, easy. Man, it was— it— it’s the ability to sit, and cause you… what of— what do they say? We have two ears and one mouth. Do it appropriately: listen. And— and it’s— it’s truly amazing, like anything in life, once people turn off their sales hat and they’re just actually listening and talking to people. And you know, I actually was l— you know, Bob Burg with The Go-Giver. He wrote a whole series of books on The Go-Giver. I was listening to a podcast with them this morning, and it’s like, it— it’s… you r— you— you become present in conversations, and you’re really listening to them, and you know, with the goal of, “Hey, how can I help Joseph? You know, how can I help others?” And what it does is ends up opening up opportunities, because listening is something that gets lost a lot in— in— in this today’s world with the internet and— and how everybody is just sitting behind a keyboard.

Joseph Crooms (25:38)
Thank you for sharing that, Tim. No, no, no. You were straight to the point, and I— and I love it. So you can’t fake… relationships are everything in this space. All right. Before we wrap up, if someone wanted to reach out, connect with you, maybe collaborate or learn more about what you’re doing, what’s the best way to reach out to you?

Tim Dowling (25:40)
I didn’t go the chaotic way, did I? Yes. Y— honestly, my the… in— and this— this ages me… I’d say my Rolodex called LinkedIn. Just using that word “Rolodex.” But LinkedIn is my… is— is a place where I share a lot of information about development, investments. You know, it… I bring people into my world, but it’s at the same time is listening to what’s going on in their world. They can find me at Tim Dowling on LinkedIn. Just look for this, you know, bald head, gray beard— easy to find. And anyway, but yeah, I think— I think it would probably pop up for Tim Dowling in Buda or Austin. I don’t know, but that’s the easiest way. I also have a website called Buda Capital Partners people can find me on. There’s… I have a dot of websites that people can find me. I’m easy. Being in real estate for twenty-five or twenty-four, whatever the heck years, it’s… I— I’m… people say, “Aren’t— don’t you want to be private?” I was like, I lost that ages ago.

Joseph Crooms (26:54)
So Tim, somebody was looking for a pen because they said, “I wanna…” he got that too quick. You mind repeating one more time, just for the— for the— the listening audience?

Tim Dowling (27:03)
Yeah, the— the website is Buda— B-U-D-A— Capital Partners. Or the easiest route is just go to LinkedIn with my name, Tim— T-I-M— the last name Dowling— D-O-W-L-I-N-G— and my little ugly face will somewhere be in that little line. Yeah.

Joseph Crooms (27:20)
Thank you, Tim. Well, perfect. Well, listen, I appreciate your time, your philosophy, and— and your perseverance, and thank you so much for sharing this. We need more people in the space who are doing it the right way. Thank you again for being here. And as for those of you tuning in, I know you got some value. Tim has been very transparent and a— a very valuable operator speaking to us today. Make sure you subscribe, so we got more conversations coming with operators just like Tim Dowling, who are out there doing real business, helping real people— especially you can help your community from the story that he told. So we’ll see you on the next episode of Investor Fuel Real Estate Pros Podcast. I’m your host, Joseph Crooms. See you at the next episode. Hey Tim, tell everybody to see them soon.

Tim Dowling (28:10)
I thank you, Joseph, and I’ll see everybody soon.