Unlocking Real Estate Success: Clay Schlinke’s Journey to Duplex Mastery

Dylan Silver (00:01.506)
Hey folks, welcome back to the show. Today on the podcast, we have a real estate investor developer builder specializing in duplex communities across Texas over 30 years of experience developed and built over 5,000 units. Clay Schlinke, welcome to the show.

Clay Schlinke (00:21.748)
Hey, thank you for having me. I’m excited to be here, Dylan.

Dylan Silver (00:24.662)
It’s great to have you on here, Clay. You’re based out of the greater San Antonio area, correct?

Clay Schlinke (00:30.774)
Correct, yep, our main office is in San Antonio currently.

Dylan Silver (00:33.888)
I know, because I lived out, if you know this area, Chicken and Pickle by Locke and Tare in the Rim. They were doing so much construction over there. I guess they were putting a second layer on 1604. Is that done yet?

Clay Schlinke (00:38.762)
No, yeah.

Clay Schlinke (00:43.67)
Not done yet. We wish it would be because every weekend I tend to shut down, but yeah, it’s expanding and blowing up over there

Dylan Silver (00:46.99)
You

Dylan Silver (00:51.36)
It’s pretty incredible, because I left San Antonio in September of last year, and between the time that I left and now, I guess the Spurs are moving downtown and they’re doing that whole layer and so much development. And even that area that I lived in, which was that area by Chicken and Pickle, La Cantera, the Rim, they now have like Topgolf, of course, they’ve got Chicken and Pickle, they’ve got that Rock and Brews, they’ve got a Cigar National. I want to say they just put in like a miniature golf bar type thing. I said, look at all this stuff that’s happening.

Clay Schlinke (01:07.455)
Yeah.

Clay Schlinke (01:18.134)
Yep. Yeah. Oh yeah, they put in a pop stroke. They got Aunt Dready. There’s so much in that area. It’s just, you know, incredible.

Dylan Silver (01:27.886)
It’s amazing to see. I’m in DFW. But, you know, one of the interesting things that I think about is there’s real estate plays happening all around us. And I actually left San Antonio because I felt like for single family home investing, maybe it was a better, more feasible for me to do it in in DFW. But certainly there’s so much happening in San Antonio. But I want to ask about the origin story, Clay. I always like to start off at the top by asking folks how they got into the real estate space.

Clay Schlinke (01:58.358)
Yeah, yeah, so I got into real estate in 1994 straight out of college. I actually read a book that kind of triggered my interest in real estate to be honest. And from that I decided, hey, I’m going to jump both feet in. And I got my real estate license at 21. Initially started as a realtor just because I didn’t have any money. I had to hustle and was just out hustling. And then I started buying and flipping houses. And first houses I would buy, I would fix myself.

on a ranch in West Texas and learned how to do a lot, you know, so I fixed my own houses and flipped them and grew that business to where we’re flipping over 120 homes a year. And then in 1999, I started looking at new construction and started building infill kind of single family.

homes on lots that I had bought. I’d buy a house, a rehab, and I’d end up with a lot next door. came with it, I would spin off the house, kept the lot. That’s how I initially got started. Then in 2002, fell into the duplex fourplex model, and that’s where we’ve been ever since.

Dylan Silver (03:08.302)
So I would say it’s fairly uncommon, fairly rare for people to have a strategy that’s worked for a full cycle. mean, 2002 to 2025, it’s 20 plus years. And you’ve been able to carve out this niche in the duplex space. When you got into duplexes, you’re already very experienced. mean, 120 flips, that would be good for a career for some people. In a year…

Clay Schlinke (03:20.245)
Yeah.

Dylan Silver (03:33.494)
And then you go from that into the duplex space. Did you know that when you got into the duplex space that this was gonna be your forever home, so to speak?

Clay Schlinke (03:42.494)
Not really, to be honest, I had a group. I was building a single family neighborhood and I had a group come in and bought my last 40 houses from me and they kind of said, hey, if you build duplexes, we will come, let’s say, you know? So I said, hey, I can do it, you know? I was like, and I love opera, you know, I love.

expansion I love putting deals together I’m kind of a deal junkie you know I just I just love doing new things and that kind of fuels me and so I was like hey I can do duplexes I’ve never done one before and just got started and really we love that space and and feel like we were very good at that space you know providing what investors want and really need for that you know growth and to build wealth for their families

Dylan Silver (04:27.084)
Now, duplexes, I’m thinking about the areas of San Antonio where I would see duplexes. Is there certain zoning where you can only do in certain areas or can you put duplexes anywhere?

Clay Schlinke (04:38.62)
No, no. So in San Antonio, it needs to be either like a multifamily zoning or it’s called an RM4, which is a kind of residential multifamily. So it has to be a special zoning. So sometimes we’re buying land and we’ll rezone it. Other times, we try to target areas where it already has the zoning, of course, if possible.

Dylan Silver (05:02.05)
Are those, I don’t know how common this is, are those typically structured in areas where there’s high population density or is it more on the outskirts of the city or is it there’s no hard and fast rule?

Clay Schlinke (05:13.938)
not really a hard and fast rule. know, on a rezoning, a lot of times they like duplexes to be almost a buffer between, let’s say, high density apartments and a residential neighborhood. So we’re able to kind of get our zoning in that situation more as a buffer. But a lot of times we’ll target areas too that are in the county where it might not be actually in the city limits. we’re, know, two purposes, there’s no zoning, so we don’t have to

Dylan Silver (05:30.936)
Yeah.

Clay Schlinke (05:43.842)
mess with that, but on the flip side there’s no city tax for the investor, so it helps drive up their monthly cash flow.

Dylan Silver (05:51.244)
Now, I want to get a little granular and talk about greater San Antonio area and duplexes and where there’s maybe some areas of opportunity in that area. So having lived there for a handful of years, I tended to see the city expanding, expanding, expanding. And I think it’s, know, Floresville, you’ve got Bernie, you practically have a straight stretch up to New Braunfels. Are these expanding areas, you know, Floresville, Bernie, New Braunfels, are these areas of opportunity for duplexes as well?

Clay Schlinke (06:12.693)
Yeah.

Dylan Silver (06:20.566)
or because they’re outside of the city of San Antonio is a little bit less maybe profitable.

Clay Schlinke (06:27.274)
No, we actually have a development in Bernie between, know, it’s off of a detail corn. I mean, right by Fair Oaks, you know where that is. Very, very successful. We’ve done very well with that location. The rents are strong. So we love those markets, you know, kind of outer outside 1604 around San Antonio. We love those markets. New Braunfels, huge success. So, you know, we really look at what areas are rent, you know, where’s the rent?

Dylan Silver (06:36.216)
Yeah, yeah.

Dylan Silver (06:46.605)
Yeah.

Clay Schlinke (06:57.304)
you know, what’s the rent amount, rent demand, and that’s kind how we target our locations, where we’re going to develop.

Dylan Silver (07:04.334)
Now, so when you were doing these deals, 2002 timeframe, 20 plus years ago, and you were underwriting these deals, were you looking at on a granular level, hey, what’s the rents gonna be in the area? Was that data available easily? And then also the land acquisition, which is critical as well, were you actively seeking out?

Hey, let me find land to put these duplexes on or was it when you were doing these other ground up builds and with these other flips you would acquire land and then say, hey, I’m going to put a duplex on here.

Clay Schlinke (07:35.498)
Yeah, when I initially started, we’ve kind of same, I guess, path as we’re on today. You we looked at what’s the rents in that area, what’s the rental demand. We would kind of shop and look at the apartments, look at MLS, of course, at single family residential and see what the rents are going for. Days on market, those types of things. And then in all of our locations, we want to be, you know, certain distance from school, certain distance from shopping, restaurants, those type of things.

Dylan Silver (08:05.006)
Now, I do want to ask you about growth of a business in the real estate space in general. So you are already a larger business if you’re doing 120 flips in a year, doing ground up builds, and you get into the duplex space. At that point, did you pivot entirely away from single family or were you still incorporating that a lot in the business? And did you see like, hey, this is a niche that I can really drill down into. I’m going to, you know,

double and triple down on this duplex spacer. Did that take some time?

Clay Schlinke (08:36.618)
I mean, we pretty much doubled down on it, to be honest. When we jumped into it in 02.

We had a lot of success, of course, and really said, hey, this is where we want to be. And we still do some single family building, not a tremendous amount. If we do single family building, it’s not really to sell to owner occupants, it’s to sell to investors. So over the years, we’ve developed a huge database of investors that buy from us. And some want duplexes, some want fourplexes, some come to us and say, hey, we’ve never invested. We want to kind of dip our toe into it, and we’d like to buy a single family.

In that situation, we will do some single family as well to provide to those investors.

Dylan Silver (09:18.446)
Now, being in any business for 20 plus years, you have to pivot, right? You have to be able to adapt and move with the market. But specifically, it’s uncommon. mean, 20 plus years, duplexes, you survived market crash, you survived COVID. Were there pivot points? Were there growing pains? What were those moments like?

Clay Schlinke (09:40.778)
yeah, I there were definitely, I’ve had great times and I’ve had some really awful times. know, 08, 09, almost killed me. I mean it was brutal just being able to continue building and getting money from banks. know, banks pretty much quit lending. that was a very difficult time. had to…

pivot, you I had a pivot to like private money and really just being creative in ways to finance, you know, my projects. So, but, you know, I look back and it’s kind of strengthened our company. So what we went through gave us that knowledge to, you know, really continue growing where we’re at today.

Dylan Silver (10:19.854)
I imagine that that time leading up to COVID too was just like an absolute boom because you had low rates, you know, had lots of investors. So for someone to have a tie in to someone who builds duplexes, that has to be a time where you probably saw tremendous growth.

Clay Schlinke (10:35.388)
yeah, yeah, during you know before COVID and you know we really even through COVID did well. mean to be honest and then as rates went up, of course that slowed down the last few years. It just created harder, you know more difficulty in cash flowing for investors. So we had to pivot once again and be creative in that aspect. So we offer a 3.75 interest rate now and that’s just kind of through creativity. We had to find a way to be able to make these things cash.

flow for our investors.

Dylan Silver (11:07.33)
want to pivot a bit here, Clay, and talk about finding a niche as a real estate guy. I am a newly licensed agent and talking to a lot of people. I think people tend to kind of shoot for progression and maybe do one thing for a handful of years, move to the next thing. I’ve seen a lot of people, for instance, go from fix and flip to maybe Airbnb or short term, then maybe to long term corporate housing. And then they’ll start lending money or buying notes or getting into commercial residential.

You stayed with duplexes now and built a business on it for 20 plus years. How have you been able to stay focused on that niche and how have you been able to expand that over 20 years and what advice would you give to folks who may be looking at shiny ball syndrome, so to speak?

Clay Schlinke (11:54.612)
Yeah, yeah, yeah. I mean, I’m a little guilty of, I love putting deals together, but what I’ve really kind of tried to drill down into, more recently even, is we do duplex, fourplex model really well, but there’s ways to create even more efficiencies. And instead of always trying to look at, like you said, something new and shiny and doing another.

another project, how I’ve looked at it and really told my children, both my sons work with me, is, hey, let’s figure out ways to just strengthen our business, our core business now. Are there ways to cut costs? Are there ways to maybe bring other businesses into our company that we, you know, maybe like…

Bringing in a plumbing company or starting a plumbing company that then can do all of our product, you know, projects. So something like that, that’s kind what we’re looking at doing and bringing in cabinets. So instead of paying a third party cabinets, we’re bringing them in from overseas, doing them ourselves. So just being more efficient and creating more profit centers, I guess.

Dylan Silver (13:01.004)
Now, with all these duplexes, do you manage any of them yourself or is it all investor managed?

Clay Schlinke (13:07.526)
No, so we actually manage all the duplexes that we build. We have it set up a third party property management company that my wife actually runs and operates. that’s been a challenge, of course. Property management is always the hardest part of the business, but we felt it was crucial to bring inside our company to really provide the best service to our investors.

Dylan Silver (13:33.422)
I mean, that’s fairly uncommon as well because in most cases, investor comes in, buys a property, builder basically says, okay, I’m done here. And you’re now managing the property. for the investor, it’s very hands off.

Clay Schlinke (13:48.02)
Yeah, 100%. I mean, that’s really what we…

push when we market, we let people know, this is a truly turnkey investment opportunity. You come in you buy from us, we’re gonna help get you the loan, we’re gonna handle the property management, the duplexes are gonna be 100 % rent ready. We try to rent them before closing if possible. bringing the property management in was really crucial for our success, because over the years, we didn’t own the property management company initially. We started the property management company about four, guess four years ago.

Before that we would refer out to multiple different management companies and what we found though is Rents would be falling so we would have our rents based on our pro forma Well, you start having two or three different management companies in there. They started competing for those same tenants So what we found is, know rents would fall instead of being at our pro forma number So that’s the whole reason we started our management company is to make sure our performers are hit what are our numbers for our investors?

Dylan Silver (14:51.606)
think what you’re doing with the duplexes with the property management is is great. mean, I can think of so many people who, as I’m sure you talk to every day, think, well, I’d love to be in real estate, but I don’t really want to have to deal with the tenants with the headache. And it’s really you take all of that off of their plate. So congrats on all your success in the duplex space. We are coming up on on time here, though, Clay. Where can folks go to learn more about your business or maybe to get in touch with you?

Clay Schlinke (15:16.671)
Yeah, thanks.

Clay Schlinke (15:21.268)
Yeah, definitely our websites the best way invest 5s comms kind of right here on my on my shirt So invest the number five letter s and comm that’s that’s the best way to go just go to our website There’s a couple call to action buttons you can hit and you’ll actually be able to schedule a call with Lexi Who’s actually my daughter-in-law? She’s my sales manager as well. So when I say we’re a family business, we’re truly truly a family business, but Lexi will walk the investors through if you’re a

time investor, if you’re a seasoned investor, we’d love to, you know, love to talk with you. We do offer a 3.75 interest rate and free property management for the first two years as well to help you as an investor, you know, really maximize your cash flow.

Dylan Silver (16:10.35)
Clay, thank you so much for coming on the show here today.

Clay Schlinke (16:13.802)
Thank you, Dylan. Really appreciate the time.