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Show Summary
In this episode of the Investor Fuel Podcast, host Skyler Byrd interviews Donald Hinton, a former inmate turned successful real estate investor. Donald shares his inspiring journey from prison to owning 19 properties, emphasizing the importance of changing one’s environment and mindset. He discusses the challenges he faced, the lessons learned in real estate, and his vision to help others by opening group homes for those re-entering society. Donald’s story is a testament to resilience and the transformative power of education and real estate investment.
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Investor Fuel Show Transcript:
Donald Hinton (00:00)
Well, it started when I was in prison. So let’s go back to the beginning. My dad did a whole lot of time in prison. He did 20 years. So I didn’t have a dad growing up. So I was raised by the streets,So I ended up going to prison and doing eight years in federal and state prison because of the dumb choices that I made.
And one day my son came to visit me in the exact same prison that I visited my dad at.
And that was the day that changed my life. ⁓ When I went back to my cell that night, I broke down and I cried
So if I didn’t change, he would be in the same exact prison.
Skyler (02:16)
Hey everybody, welcome to the Investor Fuel Podcast. I am your host today, Skyler Byrd, and today I am joined by Donald Hinton. ⁓ Donald is a real estate investor, has a very interesting backstory, and it’s really a story of how you can absolutely turn your life around and use real estate to do it. So Donald, thank you very much for joining us.Donald Hinton (02:37)
problem. Thanks for having me.Skyler (02:39)
absolutely and in the outlets let’s kind of dive right into everything. ⁓ Can you tell our listeners here kind of a little bit about your your back story and how you actually came into real estate.Donald Hinton (02:50)
Well, it started when I was in prison. So let’s go back to the beginning. My dad did a whole lot of time in prison. He did 20 years. So I didn’t have a dad growing up. So I was raised by the streets,the typical urban lifestyle. And by being raised by the streets, you end up in those same situations. You’re a product of your environment. That’s what I love to tell people. You literally are product of your environment.
So I ended up going to prison and doing eight years in federal and state prison because of the dumb choices that I made.
And while I was in prison, I was a hustler when I was out. So while I was in prison, I ran a store. A store is when you buy honey buns and sodas and sell them back to other inmates.
on consignment or with stamps and other things. So I ran a store and I saved my money through working and going to a store.
And one day my son came to visit me in the exact same prison that I visited my dad at.
So this was Oxford, Wisconsin.
And that was the day that changed my life. ⁓ When I went back to my cell that night, I broke down and I cried
and I won’t lie, like I was in prison for three years at that time.
and he came to visit me all the time. But in this particular prison, it was just like a mind blowing experience because he’s visited me in the exact same spot where I visited my dad at.
So if I didn’t change, he would be in the same exact prison.
So after that, I got back to my cell, I threw away all of the James Pattersons, I got away from the TV and I started educating myself.
on anything that could help me become a better person. So I picked up the Robert Kiyosaki’s Rich Dad Poor Dad. I picked up investing books ⁓ about the stock market, anything. Took all of the classes that they offer. And when I got out, I went to a completely different city. I went to Davenport, Iowa. That’s where I’m from. That’s where I’m at now. And
While there, I had $10,000 saved from when I was in prison. So I went to a completely different city to change my environment. So that previous environment had made me into who I was. So I had to go to a completely different environment to become a different person.
So I went there, didn’t know nobody. And only thing I had was the $10,000 in my pocket. So only person I knew was my landlord. And I asked him if he wanted to sell a property and he ended up selling me a duplex. So I lived in one and my tenant paid the mortgage on it. ⁓ I think I had to come out of my pocket like $200. But he sold it on to me four months after I got out of prison.
So he sold his seller financing, you know, a lease option, things like that. And he gave me three years to come up with the rest of the money. So I ended up working my job for the three years and I refinanced it and ended up saving more money, buying another one, buying another one. And five years later, now I’m on my 19th unit.
Skyler (07:04)
That’s an excellent story. I mean, it’s inspirational. I can say that’s not the place my head would be at now trying to get into real estate in that way. And when we talked before, I was kind of wondering how you were able to purchase the original property, but doing seller financing, that’s awesome. That’s a great way to do it. ⁓ So tell me, when you were in, why did real estate stand out to you? Why did that catch your interest to begin with?Donald Hinton (07:23)
Yeah.I think it’s because that was like, it was basically like the life I was living, right? I think I had in my mind flipping properties probably, but understanding like real estate is the 90 % of all millionaires own real estate. they doing, so they know something that we don’t know, right? ⁓ So I think I went in intentionally trying to initially trying to flip properties. But when I learned about like cashflow,
like appreciation and things like that. It was like, hold up, maybe I need to hold these properties and not pay taxes and all of this stuff. So it was just like from the previous life, just understanding hustling. So it was just the same concept, just a different product.
Skyler (08:20)
Absolutely. So I know you’ve got 19 properties now. ⁓ Have you in the past, you had you tried to, you know, do the fix and flip or have you always just kind of bought and hold and not sold any at this point?Donald Hinton (08:24)
Mm-hmm.Yeah, that’s a good question. ⁓ Since then, I sold one. I tried to do a fixing flip and it was my third property. So I bought the duplex. I ended up buying another one that had equity. I took the equity and bought a little run down one and then I lost. So I thought I knew what I was doing and I didn’t know. ⁓
called the Dunning-Kruger effect when you think you know everything and then get socked in the face because you don’t know nothing. But ⁓ I ended up selling that one because I didn’t know where to find capital to fix up the property. I didn’t know that you could use the credit cards. I didn’t have no $50,000 line of credit nowhere. So it was just things I didn’t know yet. So I ended up selling it at a little bit of a loss. But since then, I’ve just been holding them.
Skyler (09:23)
So when you were getting started, did you have anybody that was helping you at the time, or were you just trying to figure everything out on your own as you went?Donald Hinton (09:32)
Yeah, I was bumping my head, figuring it out.Skyler (09:35)
Wow, okay. So how did that go for you? I mean, cause it can be a lot to take in, know, if you know, when you’re new to it if you don’t have anybody to really, you know, bounce ideas off of or steer you in the right direction, how did you manage that?Donald Hinton (09:50)
See, I think the reason why I clicked it so quick when I got out was because I sat in a cell for five years studying it. So if you study something repetitively, your 10,000 hours, if you keep on studying something, then you really can’t go wrong. So what I would do was I was in the cell looking in a newspaper for properties for sale.And I was in Kentucky, so I don’t know the prices of real estate in Kentucky or the rents or nothing like that. So I would ask the guys from Kentucky, hey, what you pay for your rent? How big is it? Where is it? And I would look in the newspaper for these properties and be like, OK, so if it’s this, calculate this mortgage. All right. I could do this. You know, so I think that’s the repetitiveness you need. So whenever opportunity presented itself, it was just like a no brainer. ⁓ He wanted a.
thousand dollars a month for the property and I had to pay and the tenant was paying $750 and they was already in there so it was like all right this no brainer let’s go
Skyler (11:32)
There you go, man. I love that. That’s ingenuity, right? That’s taking it upon yourself and just figuring it out. That’s excellent. I love it. And where have you been concentrating? What part of the country have you been operating in?Donald Hinton (11:36)
See you, man.So I’m in the Quad Cities. So this is Iowa and Illinois. So three of my units is in Iowa and the rest is in Illinois.
Skyler (11:54)
Okay, excellent. And I know when we were talking beforehand, you’re looking to switch into a little bit different business model. Why don’t you tell everybody about that?Donald Hinton (12:04)
Okay, that’s a good segue. So while I was on this run, I ended up like getting the conscious like, man, people need to know this stuff, you know? So it was like the same community that I was killing before prison is the same community that I can help now if they just know something different. So what happened was I ended up getting in trouble. I called a DUI.And I was about to lose my I was on my third property at that time. So I was about to lose everything because of this DUI. I go back to jail for seven years. by the grace of God, I got 30, 30 days in jail. And during that 30 days, I got sober and I ended up writing a book. My book is called From Prison to Properties. And in this book, I just wrote down like the simple things that I knew about real estate like.
assets and liabilities, what’s inflation, things like that. So by me writing this book is like, man, I got to teach people this stuff. I ended up getting off of probation and
just things started coming through and ⁓ some private prison reached out to me and was like, hey, we love your story. You should come in and talk to these guys. So then I started going into prisons across the country, speaking to guys about real estate and
That was whenever I wanted to pivot. So I have all these properties. Now I can get these guys somewhere to stay when they get out of prison. So my next ⁓ path is about to be opening up group homes slash halfway houses for these guys when they come home. And that’s what I’m in the process of putting together right now as we speak.
Skyler (13:55)
That’s awesome man. And I think it’s a really interesting sector to try to really be in here because ⁓ I know there’s different ways that you can kind of work with the state as well. And tell me about that because I’m not quite sure how it all works.Donald Hinton (14:13)
Okay. So like when you, when, when you open a halfway house, like you can’t get funding from nobody at first, but once they see that you have a halfway house or a group home, sober living opened already and that you have a residence in there for six months, then you can start applying for the grants and stuff like that. So, you have to be, ⁓ registered with, NAR, the national association ofresidential recovery, then ⁓ it’s nationwide. So once you register with them and they see that you upped the code and all of this stuff, now you can start applying for these grants to have them pay for it. But initially, the people that’s coming out of jail trying to get sober, they have to pay out of their pocket. So I’m trying to work on seeing about that so their friends and family won’t have to pay for them.
Skyler (15:51)
Okay, nice, absolutely. So in what kind of properties are you looking for, you know, for the transitional housing here? Are they kind of just single family homes? they ⁓ have to be in certain neighborhoods? What does that look like?Donald Hinton (16:00)
Mm-hmm.So what I’m about to do is I’m about to turn the actual duplex, the first one that I bought, I still live in it, mind you, matter of fact. I wanna turn that into the first one. Cause that’s just like a full circle moment. Like this is where I came when I first started. So this is where people about to come to get their life right. So that’s kinda like what I’ma do, but in the…
future it’ll be like single families like big three or four bedroom houses with a couple of beds.
Skyler (16:37)
Nice, awesome. if, you know, if all goes well, are you going to look to expand out into different parts of the country? Are you going to stay right there in the Midwest? What does that look like?Donald Hinton (16:49)
Yeah, it’s going, I think mostly in the Midwest. That’s where, you know, houses is cheap, rent is low, it’s affordable. ⁓ I know I can make some real money in, you know, Florida and all of this stuff, but ⁓ that’s not my market. So I just stick with what you know, man.Skyler (17:07)
Yeah,absolutely. And let me ask you, when you started this whole property journey here and buying properties, becoming a landlord, what are some of the pitfalls that you can tell everybody about and maybe help other people avoid?
Donald Hinton (17:26)
it’s yeah, I got my head bumped a couple of times. So one thing to avoid is like moving too fast. I it’s been it was three years when I got all of my properties. I had I had 15 and three years. So I moved way too fast, you know, so ⁓ just move, move slow.Don’t overwhelm yourself because if something go wrong, it’s going wrong and it could take down everything. Just go slow.
Skyler (17:57)
Absolutely.So let me ask what what are some things that you look for that can go wrong? I can really derail you.
Donald Hinton (18:05)
Some things that can and will go wrong is big expenses like your furnace, anything like that, a bad tenant furnaces, those is $5,000 expenses. If a tenant don’t pay for three months.If she don’t pay the first month, you give her a chance. The second month, now you got to evict her. She might not get out for three months and then she trash your place. That’s a $5,000 expense right now. All right. A furnace, $5,000. I had a big old plumbing issue that was $13,000. So these these expenses can add up quick and take from all of your cash flow. So here in the Midwest, you don’t cash flow. I mean, you cash flow enough, but it’s it’s
maybe two, three, $400 a door. So if a $4,000 expense come, you lost all of your profit for the year.
Skyler (18:58)
Absolutely. So as far as the properties that you’ve been looking at that you’ve acquired so far, had they already had tenants in them or were they empty at the time and you had to fill them? What did that look like?Donald Hinton (19:13)
So the first one I bought, had a tenant. Then the second one I bought, ⁓ we fixed it up and I tried to do like a seller finance deal or rent the own deal. So I found a tenant and then the third one.It was vacant. I tried to fix it up and that’s the one I lost money on because I didn’t have the credit or the know-how how to find funding and stuff like that. And then my fourth deal, I bought a whole portfolio. So they all was occupied besides one. It was 11 of them, 10 of them was occupied. And that’s how I scaled so quick.
Skyler (19:48)
Okay, all right. That’s that was going to be my next question. How did you acquire so many properties so quickly? And then okay, you bought you bought a portfolio that makes sense. Absolutely. ⁓ Awesome. Well, you know, Donald, as we kind of come up on our time here, we can you tell everybody, you know, how can they get in touch with you if you know, if they’re interested in working with you and and where can they get the book?Donald Hinton (19:56)
Yeah.⁓ The book From Prison to Properties is available on Amazon. And if you want to work with me or contact me, my name is Donald Hinton on all platforms, ⁓ Facebook, Instagram, LinkedIn, TikTok, YouTube, everything.
Skyler (20:33)
Perfect. Awesome. Well, Donald, hey, again, I love your story. I think it’s an excellent way to, or, you know, it’s an excellent thing to be able to show people, hey, you can use real estate. You can come from prison, turn your life around. And man, and this is the fact that you were able to figure it all out on your own and figure it out from prison, you know, to get yourself started. That’s just excellent. So thanks a lot, man. I really appreciate you coming on.And for our listeners out there, if you’ve got something of value from this podcast, please hit subscribe. We have got more interviews coming down the way all the time here, and we will see you all on the next episode.
