From Builder to Investor: 5 Key Strategies for Real Estate Success

Dylan Silver (00:01.112)
Hey folks, welcome back to the show. I’m your host, Dylan Silver. And today on the show, we have Tim Davis, a general contractor since the early 90s, licensed realtor as well, and real estate and life coach. Tim, welcome to the show.

Tim Davis (00:18.335)
Glad to be here.

Dylan Silver (00:19.726)
You know I always like to start by asking folks how they got into the real estate space How did you get into the real estate space Tim?

Tim Davis (00:28.317)
Well, what I tell people is I was born into it. It’s a genetic thing. My father was a master carpenter and builder and most of the people on both sides of my family are in the construction business in some degree. So I think it’s just genetic.

Dylan Silver (00:46.104)
So was it basically carved out for you and you knew this is what I’m going to be doing? As soon as you left high school, that was your path? Or was there any point in time where you said, I’m going to go see what else is out there? Was it just very much, I’m going to go straight into the family business?

Tim Davis (00:59.645)
Yeah. Well, when I was 12 years old in sixth grade, I decided I wanted to become an architect so I could design and build houses. And I went, you all the classes I took in high school prepared me for the college and I went to college and figured out, you know, don’t think I want to be an architect actually. So because because it wasn’t the path I thought it was going to be. And so I dropped out of college and joined the Navy. And which

Dylan Silver (01:21.439)
it happens.

Tim Davis (01:28.575)
I needed to grow up anyway, so that got me growing up real quick. So anyway, I got out the Navy and started working in the trades, started out as framing houses, and then I went on to becoming a finished carpenter and ended up being a small remodeling company. Then in 92, this was all during the mid-880s, in the early 90s I became a general contractor through some…

Dylan Silver (01:34.062)
That’ll do it.

Tim Davis (01:55.647)
some mentor friends of mine. And from 92 until 2008 I was building houses.

Dylan Silver (02:07.128)
So Tim, know, this growth may have felt natural to you, but to folks on the outside, including myself, hearing this, especially not coming from the real estate space myself, I didn’t have friends, family, you know, I didn’t have carpenters, contractors. We hear these stories and it seems like, wow, that’s truly inspirational. Getting out of the Navy, building a company. Was it that straightforward for you or was it a lot of growing pains initially?

Tim Davis (02:37.085)
it’s nothing but growing pains in any business. So there’s no such thing as a smooth transition into any business. So yes, it was growing pains, no doubt. So my first house I built, you know, I did a lot of the work myself and made some okay money. And from that house, I got a pre-sale house. And that pre-sale house, from the time I finished the one I just started, or just finished, to the time I started the new one,

the lumber prices had doubled. So I learned my first lesson right there that you can’t always count on prices being stable. I actually lost a little bit of money on my second deal, which was a pre-sale deal, which you’re not supposed to lose money on pre-sales.

Dylan Silver (03:16.494)
That’ll do it.

Dylan Silver (03:23.224)
So at this time, I’m trying to connect things chronologically. Early 90s, you have your own company. At this point, are you primarily working with single family homeowners? Are you working with investors? What’s your business look like in the early 90s?

Tim Davis (03:41.055)
I was a spec home builder. Didn’t know what I was doing as far as business wise. I was learning on the fly. so yeah, I was just getting bank loans and building spec houses and paying the bank their interest rates. That was the only thing I knew how to do. I didn’t know anything about attracting investors at that time. But I was able to build a successful business and a decent reputation to the point where in

Dylan Silver (03:55.406)
Okay.

Dylan Silver (04:00.96)
Okay, okay,

Tim Davis (04:10.943)
1998 I was invited to become a part of a group that was headed up by the largest residential land developer in Tennessee, which is where I’m from, middle Tennessee. He also owned the largest privately held real estate company in the whole state. And he wanted to start a new construction company. And I was recruited to become the head of that construction company. So that was…

an interesting experience. So got to hang around with some lot of high-rolling people and at any given time they would have, know, between five and 10 developments going all over the state. And I saw how they arranged them. Every one of them had a different group of investors and every one of them was a separate LLC. And that LLC hired the development company to do the development for a set price, you know, and then the develop…

Dylan Silver (04:50.094)
Okay.

Tim Davis (05:08.063)
would sell off to individual builders and the investors would get their portion of the profits. And I’ll stay with that company for two years and watched how all that worked. And so when I left them in 2000, I said, I can do that myself. So I started doing the same thing. I created a sub-chapter S corporation for my general contracting company. Then I set up eventually four different LLCs that all had different partners.

I was using a partner’s credit and the partner’s money to fund the deals. In the partnership, the LLCs would hire my construction company to build the houses. So from a construction company, was a wash on the books. And then all the profit went back to the LLCs and we split the profits from there, which was a really good thing until the market crashed in 08. So at that time I had 17 spec houses under construction.

Dylan Silver (06:02.412)
Yep.

Tim Davis (06:08.037)
owned 33 and fake up lots. Had an 18-lot boutique high in subdivision development that was just getting off the ground and it all came crashing down with the market. I went from closing a couple of houses a month to closing nothing in a year but I was still paying about $25,000 a month in interest to the banks because it was all highly leveraged.

Dylan Silver (06:20.748)
Mm.

Dylan Silver (06:33.58)
Yeah. Well, let’s break down some terms and, you know, I’m a little bit ignorant to this, so bear with me here. But you’re building spec homes, so this is for, you know, individuals who are getting a home for themselves initially, right? Before you met the…

Tim Davis (06:50.601)
What’s that? You’re building a house with no customer. You’re hoping to get one. It’s a speculative. You’re speculating.

Dylan Silver (06:53.803)
No customer.

Okay, you would, would you then list that home on the market on the MLS? Okay. And so in the early days before when you were doing this, what was the days to sell? Would these homes sell very quickly?

Tim Davis (07:01.886)
Yes.

Tim Davis (07:12.629)
Well, 30 to 60 days is normal.

Dylan Silver (07:15.926)
Okay, there wasn’t a… these weren’t sitting on market. That’s good. Now when you… when you… Right.

Tim Davis (07:19.753)
No, no, not until the crash. The one that nothing…

Dylan Silver (07:24.674)
When you were finding areas to build these homes in, I’m assuming there was lots of work that you went into underwriting it to find which area is going to be best for home buyers. Was that something that you were doing yourself or were you working with advisors of some kind to find which areas you were going to be building these homes in?

Tim Davis (07:47.049)
Well, that was something that I loved doing. There was nothing I liked more than sitting down and spending hours creating a pro forma and writing down all the creating spreadsheets. It’s going to show, know, how here’s what we’ve got. Here’s the take down schedule. Here’s how many we’re going to build per quarter. Here’s the sales price. Here’s the profit per deal. And, you know, that’s how you attract investors. And I love doing that. So, yeah, but yeah, I studied the market to know where to build and where not to build.

A lot of it was dependent on where lots were available.

Dylan Silver (08:17.006)
So,

You know this is interesting because I hear a lot of folks you know which I’ve talked about this on the show previously with other guests. The hallmark traits I feel of real estate operators high level real estate operators and entrepreneurs I call it entrepreneurial neuroplasticity. You have to be able to

change your thoughts and the way that you act day to day. And so you go from swinging the hammer to then doing the pro formas to it sounds like building a reputation and a brand and also networking substantially. So you have strengths in multiple areas to where it sounds like a big investor in Tennessee says, hey, you’re gonna lead up our construction. You’re gonna be the builder for us.

Was that how he got a hold of you? Was it through networking and he saw your brand or did you reach out to him to make the connection?

Tim Davis (09:11.711)
Well, believe it or not, one of my mentors, his wife was a realtor, and she became my very first realtor. And she worked in his brokerage as a realtor. And she was impressed enough with me to want him to meet me. So she arranged for us to have lunch. And that was our first meeting. So I had lunch with this guy, my realtor, and we talked for a while. And that was really the only time I’d met him, until the time I was invited to become part of the

the group, which I think somebody had thrown my name out into the hat for consideration. So I came in.

Dylan Silver (09:46.158)
So what year was that roughly that you made that partnership? All right, so in 98 you make that partnership. At this point in time, you’re not thinking about being a real estate agent yourself. You’re 100 % in on being a builder and you’re building single family homes with this investor? Okay, so at this point I’m imagining in my head, you go from running your own business to then doing it at a much larger scale. That had to be.

Tim Davis (09:49.471)
98.

Tim Davis (10:03.131)
Right.

Dylan Silver (10:15.488)
a lot of pressure, I’m imagining.

Tim Davis (10:19.401)
Believe it or it was one of the funnest times I ever had in my life. I was only in it for two years, but the first year, all we did was create the plan. We put together all the parts and the systems and started, we did the development of the land in the first year. But I was meeting with the architects and we were designing the product and I was putting together all the costs and getting all the contractors, subcontractors in place to build all these houses.

That was a blast. But what I ended up doing was creating for myself a bureaucratic job. So I was sitting in an office all day for the most part. I didn’t get out to the field except maybe two or three times a week.

Dylan Silver (10:54.424)
Mmm.

Dylan Silver (11:04.782)
Yeah. After that, I can imagine you might have felt like you missed the field. So you mentioned you were there for two years. So from those two years to then 2008, were you then again working for yourself or were you working with other investor partners?

Tim Davis (11:22.911)
Like I said, had my own company. was a Sub S Corporation. It was my building company. Then I did several LLC partnerships with investors. And in each one of those, the investor was a silent partner who had no say in the product or the price or anything else. But that was, they were silent partners. That’s what they wanted to be. They had the money to invest. They just didn’t want to deal with the day-to-day headaches of a building company. And that was what my contribution was.

Dylan Silver (11:32.802)
Okay.

Dylan Silver (11:49.376)
Okay, so for folks who are raising capital for any business venture in the real estate space, what would be your recommendation to them for finding partners or for raising capital? I’ve heard people tell me, know, Tim, that people need to tell everybody what they do and just…

tell everybody what you do and you never know where it’s gonna come from. People will know your name based on your business. What’s your perspective on that? You had multiple now strategic partners that were successful in helping elevate your company and your work. What would be your guidance to folks who are trying to raise money themselves?

Tim Davis (12:32.262)
Networking, you know that you’ve heard the old cliche your net worth equals your network And it’s a cliche for a reason because if I believe it’s a hundred percent truth So just meet people, know, lot of some of the investors I had were just introduced to me. Well, for example one of them Got introduced to me through my banker. My banker was impressed with my business and my business Acumen, I guess you’d say and he said hey, I got a guy who you might want to meet

Dylan Silver (12:37.26)
net worth.

Tim Davis (13:01.373)
So, and the investor was looking for some place to park his money or invest his money. So we ended up doing a lot of stuff together.

Dylan Silver (13:04.845)
Yeah.

Dylan Silver (13:09.858)
How much of that networking, Tim, was you purposefully saying, okay, I’m gonna go to this event, boom, boom, boom, I have this, I’m gonna plan this, versus kind of ad hoc, organic, you know, people saying, let me introduce you to this person. And I’m imagining over time, there was more of that.

Tim Davis (13:30.973)
Yeah, I’ll say most of it was organic. At the time, back in the 90s and 2000s, there weren’t that many groups that you could be a part of. We had a local REA in the middle Tennessee area, which real estate investment group. And it was very small and there were kind of sporadic meetings sometimes. And I met some people through that, but for the most part, there wasn’t that much out there.

So, yeah.

Dylan Silver (14:01.058)
That’s how I got started in Texas was through a RIA. I was selling cars. I’ve said this story before on the podcast. I was selling cars for Nissan and was just working 12 hour days. And so from like 2020 until 2023, that’s what I was doing, not for multiple dealerships. And I was trying to figure out how to get into real estate, but it just seemed like such a

big jump, knew nobody didn’t have it in my blood, people said, why do think you can do this, so on and so forth. I ended up going to two RIA events, not events, but small meetings in like a hotel somewhere in San Antonio, Texas. Ended up paying a bunch of money for me at the time to get to a conference. And I was just like in a room with all these high level operators who were willing to talk with me. And that totally changed everything for me, Tim, because I was like…

Okay, they’re willing to have a conversation with me and I’m a nobody at this point. Like I had, I didn’t know anything about contracts. I didn’t know anything about how to evaluate a deal. Nothing. All I knew was I wanted to be an operator in the real estate space on some level. And so that, for me, that, that RIA was huge, catching us up to 2008. So market crashes, right? It’s harder to, to,

Tim Davis (14:54.569)
Yep.

Dylan Silver (15:16.952)
for people to qualify for loans. I have joked that they were asking at that point in time for like a blood sample, you know, to make sure that your blood was good enough to get these loans. So being in the real estate space is just tough. So you move from being a builder at this point in time to being a real estate agent. Do I have that right? Was that accurate?

Tim Davis (15:39.059)
Well, I kept my contractor’s license, but I also got a real estate license. Because I could see the tide changing, I didn’t know exactly what I was going to do, but I was going to do something different. I was working, I got hooked up with a brokerage, and the brokerage was actually a very small company, and the broker was married to a builder, and she needed somebody to help sell his houses.

Dylan Silver (16:08.461)
Mmm.

Tim Davis (16:08.511)
he was still going. He ended up going under as well because it’s a long story. So that all blew apart. So I moved my license to another company, of piddled around for a little while. Even went out and got my insurance license because I figured I better find another career right now.

Dylan Silver (16:11.982)
Mm.

Dylan Silver (16:27.308)
Which type of insurance? I’ve had a life insurance license. I wasn’t any good at it.

Tim Davis (16:31.487)
No, me either. So yeah, it was life insurance, health insurance. I actually got recruited by MetLife to become a, they were gonna send me and get my securities and exchange license. And they were gonna pay me 80 grand a year plus commission. And I said, that sounds really good, but I would be lying if I told you I was really into this. So I figured that I didn’t wanna be dishonest and take their money just because I needed it. So.

Dylan Silver (16:43.064)
Yeah.

Dylan Silver (16:53.837)
Yeah.

Tim Davis (17:00.287)
I decided here’s what I’m gonna do. I still have all my knowledge. I didn’t lose that, I just lost all my stuff. But I still had all my knowledge and experience. And I still had investor friends who weren’t in the construction business, they were in another business, so they didn’t go under in the crash. So they still had money to invest and they still believed in me. So what I started doing was here’s what I’m gonna do. I’m gonna go out and find deals, bank foreclosures, whatever.

that needs some work. I’ll bring the investor in as the client. I will get a commission when they buy the house. I will run the project and charge a fee for running the project. Then I will list the house at the end and get a commission when they sell the house. So that was my business plan for a couple of years and worked great. But I also realized how much money I was leaving on the table because I didn’t want to have the debt myself. didn’t want to be on the…

Because after having so much debt and getting wiped out by it, didn’t. was very, I was very, I was Dave Ramsey on steroids for a while there. So.

Dylan Silver (18:01.55)
You’re cautious.

Dylan Silver (18:07.64)
So you said something interesting because I am an active wholesaler, right? And so talking about foreclosures, I’m imagining you got some type of report that had the foreclosures, these people are going to the foreclosure auction in 30 days or less. Are you getting them under a contract to list and sell their home? And you also, if I heard you right, you fixed the homes up to some degree. Break that down for us because I haven’t heard this strategy before.

Tim Davis (18:33.823)
Well, it was just a temporary strategy. But like I said, I was just finding the deals. The deals were on the MLS. This was after the 08 crash, 2010 to 2012, somewhere in that range, where every day there was probably another 50 to 60 new foreclosures on the MLS. They’re already foreclosed on. The bank had already taken them back. And the banks were just basically, if you made an offer even close to what they were asking, they would take it.

Dylan Silver (18:55.544)
Okay.

Tim Davis (19:03.239)
And a lot of these homes were not that old and didn’t need a lot of work. So we could turn them around pretty quick, know, and make a pretty good chunk of money quickly.

Dylan Silver (19:14.862)
So you’re, were you working with investors to make these offers and then you would fix the homes up and at this point the investor is, I don’t know how this works, the investor was paying you to fix the properties up and then you would get a commission upon the sale of the home, was that how it worked?

Tim Davis (19:19.507)
Yes. Right.

Tim Davis (19:28.863)
You’re right.

Tim Davis (19:32.637)
Right, right. So I was a realtor making the commission on both ends of the deal. Plus I was a contractor in the middle redoing the property.

Dylan Silver (19:35.31)
Dylan Silver (19:41.632)
Okay, wow, this is really interesting stuff. So you’re doing that for a couple of years. Roughly, roughly, how long were you doing that for? Until what year?

Tim Davis (19:50.333)
Well, I don’t know, 2012 or so, then I decided, you know, well maybe I will take some more risk again. And I started partnering with the investors instead of just being a neutral partner. And I started sharing the profits. And then I got built back up to the point where I almost didn’t need the investor anymore.

Dylan Silver (20:12.14)
Yeah.

Tim Davis (20:13.043)
But I didn’t want to leave them all behind because they’re the ones that helped me get out of the hole. I felt like I would be betraying them if I just, hey, thanks for the help, but I don’t need you anymore. But everyone I went to with that story, I don’t want to leave you behind. You need to do what’s right for you and your family. I’m loan you the money. But you can have the property. You can make the profit. Just give me interest on my money. I know that you know what you’re doing. So they were happy with that.

Dylan Silver (20:16.878)
Yeah.

Dylan Silver (20:41.752)
Yeah, investors.

Tim Davis (20:42.619)
Even to this day, I still have some of those same people who will invest in my deals.

Dylan Silver (20:47.5)
That’s 100 % true. I’ve seen this. It’s kind of shocking, Tim. I’ve seen investors go from fix and flipping, short term, mid term, long term rental, to then holding notes, being hard money lenders, construction loans, so on and so forth. And they’re very happy to do that because it’s mail money. And this is with someone they trust. They’re not investing it in Wall Street. If they trust this person in their heart and mind, this is not

this is a lock, right? It’s not going to go up or down based on the market. This person’s guaranteeing where my rate of return is. I had kind of the same mentality before I spoke with so many investors on this podcast who had moved from being active, know, overseeing crews themselves to then lending the money. So at that point, catching us up to today, you’re effectively

able to operate on a scale that you previously were not going to back before even the market crash. So today in your business, are you passionate about today? What makes you unique and in business today?

Tim Davis (22:03.07)
I guess my passion is coaching others and teaching them how to do what I have done You know just like we were talking about earlier You know most successful people will are happy to share how they got to where they are and if somebody they’re not just gonna come up tell you how they did it but if you’re Interested enough to know and ask them. They’ll be glad to tell you so that’s that’s the secret. That’s how I got started I went I was working for a contractor. I went to hey, I want to get my contractor’s license. What I need to do and he said well

me introduce you to my business partner. He’s the guy who does all the business part of it. So that guy became one of my mentors. He’s now in his early eighties, still a good friend of mine. And we’re still looking to do investments together.

Dylan Silver (22:44.674)
you know when i’d talk to folks about how will they get skilled up in the real estate space i routinely recall my own shock at being able to go up to people at

that conference i mentioned that that event that paid for and then subsequent meetings with with various people throughout the state of texas where i could just ask them hey how did you do x y and z and especially when they’re there for the sole purpose of meeting other people they’re shockingly in open book it was not way it was not that way when i was in the automotive space as a salesperson it wasn’t that way at all i but in the real estate space

People need to meet other people and once you get to a certain point you realize, well, if I can have people even finding me these deals, I’d be happy to not have to go out and do that part of the job myself, that acquisitions work. So I didn’t realize it at the time, but when I was talking to these investors and then when I later presented them deals that they later bought, it was very much reciprocal.

To me it seemed like, my gosh, they’re buying my deals, I have these assignable contracts. I’m very fortunate. But also in their mind it’s like, well, here’s this young guy who is clearly hungry for knowledge, but also maybe he’s gonna find me some deals. So let’s see what will happen here. And in that vein, I feel like I got lucky, but I don’t think I would’ve got lucky if I wasn’t putting myself out there. And I’m sure you can attest to that same idea as well.

Tim Davis (24:15.903)
But let me tell you a real quick story. Also, I do some coaching and one of my coaching students who is up in the Milwaukee area or somewhere up there, but he had done like three or four flips and he had done, you know, had some rental properties, but he was very, I guess, not outgoing. He was very introverted and I was on the call with him and he had a real meeting to go to that night.

I here’s what want you to do. I want you to go to five people you’ve never met, shake their hands, introduce yourself, ask them what they do, and then ask them how you can help them in their business and see what happens. And he kind of freaked out. I don’t know if I can do five, but can you do two? Okay, I can do two. I’ll commit to shaking two people’s hands. So he met two people he’d never met, and they started talking with one of them. One of them said, hey, I want to introduce you to somebody else. So he introduced them to somebody else.

That other person was a successful investor, just like we talked about, who was now to the point where all he wanted to do was just loan money to other people. He had the cash now. He didn’t want to do the work anymore. So now he’s got a money man that he wouldn’t have met had he not just gone out and shook two people’s hands and introduced himself.

Dylan Silver (25:35.208)
name number need. I’ve actually seen this multiple times. I want to do it myself, Tim. People will show up to it. Now this is kind of some people will say I wouldn’t do that, but it worked for me. worked for me. Someone came up to me. They had a clipboard in their hand. They had a pen and a paper and he had a conversation with me asking me what I do.

I curious what he did and then he said to me, here, go ahead, put your name and number down. And I was very willing to just put my, and he must have collected like 15 people’s names and numbers. And I said, wow, very bold. I don’t know if I should do that. I haven’t personally done that, but I may. But I digress here, We are coming up on time here. Where can folks go to get ahold of you?

Tim Davis (26:18.473)
Okay.

Tim Davis (26:25.471)
Well, there’s two places. I have a coaching group that I own that’s mostly focused in middle Tennessee. It’s more of a hands-on kind of coaching program called Flipping Genius, where I teach people how to flip houses. And I also teach them how to build new construction, because I have probably got more experience in new construction than I do in flipping. But instead of building, I used to build 20 to 25 houses a year back before I went.

And since I weighed, I’ve built, I think 17 houses in that whole time. So I don’t build much anymore, but I still know how it’s done and I still teach other people, but that’s one thing. So flippinggeniuscoaching.com is the website.

And I’m also a coach for a group which I’m really excited about called Life on Air.

So it’s life and air comm L I F E O N A I R E dot com people ask what the heck is a life in there So well, you know what a millionaire is somebody with a lot of money so a life in there is somebody with a lot of life and the whole premise behind life in there is don’t start Anything until you have a written clear vision for what you want your life to look like

Then you build the business around that vision instead of just building a business and hope someday you’ll have a life. So most people learn, that’s just American dream. I call it the American life. Go to college, get a good degree and go out and get a good job and work your ass off for 40 years and someday you can retire and enjoy life. So no, don’t do that.

Dylan Silver (28:10.54)
You might lose your mind in that time period, you know?

Tim Davis (28:12.975)
Well, that actually might have been a way to do it back in the 1940s, but it’s not how it’s done these days. So create a written clear vision for your life. So lifeinair.com that will, and there’s events all over the country, several times a year. We got one coming up in Nashville early May, and it’s called a Get a Life Getaway. It’s three days, three intense days that will completely change the way you look at everything in life. I can guarantee you that.

you will come away from that totally with a whole new outlook on your entire life.

Dylan Silver (28:49.198)
Tim, thank you so much for coming on the show. I would just say to our listeners, know, Tennessee area, reach out to Tim. You mentioned life on air. And then also, what was the name of the coaching again?

Tim Davis (29:04.489)
FlippingGeniusCoaching.com

Dylan Silver (29:06.776)
FlippingGeniusCoaching.com, you know, to have these people who’ve been in the trenches themselves, who’ve done it multiple times, repeatedly, they’ve seen the ups, they’ve seen the downs, that’s really the power of having a coach, is someone who can see the cycles because they’ve been through the cycles. And so if you’re worried about, you know, falling and not being able to predict where the stress will lie,

That’s really the power of the coach. Reach out to Tim if you’re in the Tennessee area. Tim, thank you so much for your time today. Thank you for coming on the show.

Tim Davis (29:44.563)
Yeah, glad to be here.