Brian Clayton started as a landscaper. Today he’s built an eight-figure real estate portfolio and has become debt-free and financially independent, in addition to founding a successful real estate technology company.
How did he do it?
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Deni: How you doing, Brian?
Brian Clayton: I’m doing great, guys. How are y’all doing today?
Deni: Awesome. We are live. And we’re excited to have you with us.
Brian Clayton: Awesome. Rock and roll. Let’s kick some butt today! That’s right.
Brian Davis: So, Brian, I understand that you reached financial independence in your mid-thirties with real estate. But let’s rewind all the way to the very beginning with how you got started in real estate investing and what your first investment property looked like.
Brian Clayton: Yeah. So actually, I got started in real estate investing. I remember very, very vividly it was a day and when I was 21, 22 years old, I was meeting with my accountant and I had a little lawn mowing business. I was cutting grass for a living and my accountant said, Hey, you don’t want to cut grass for the rest of your life, and you’re making a little bit of money and you want to start buying rental property now. And I was like, What are you talking about? I don’t want to be a landlord. And she said, Trust me, in ten or 15 years you’ll be glad that that I made you do this. And so and so I did. I bought my first rental property when I was 21 or 22, and it actually worked out pretty good because I had a landscaping business and which was seasonal. And so what I would do is, is I would take my helpers and my crew and we would work on fixing up the properties I was buying during the off season. And that little, little by little built up a pretty good real estate portfolio that when I sold that business, it kind of enabled me to retire at at the age of 33. And that teed me up for my second business that I’m working on now. Green pal. I didn’t have to I didn’t have to take a salary from the business when I was starting it. And so that was really, really helpful. So a lot of where I am today is because of decisions I made 20 years ago buying real estate.
Brian Davis: I love that you combined two businesses there that have so many synergies. I mean, real estate investing and lawn or landscaping business. I’m guessing that a lot of the guys who worked for you were pretty handy. So they were able to probably do some of the renovation work on some of your properties and a good way to keep them employed during the off season.
Brian Clayton: Exactly.
Brian Davis: You don’t have that same kind of employee turnover.
Brian Clayton: So one thing that stands out looking back and one thing that I kind of coach new founders on today, you know, if you’re starting a traditional blue collar, service based type of business, like what I was running at the time, you can take the proceeds from that business and roll them into something more durable like real estate. And so you kind of have this flywheel of, okay, I’m running my blue collar service based business. It could be could be a landscaping company, home cleaning business, it could be a roofing company, painting company, whatever. And if you take the profits from that and roll it into to a durable investment like real estate, and just do that over and over again for a long period of time, you can build wealth without any secret sauce, without anything that is mysterious. If you just do those simple things, you can build a seven figure net worth and eight figure net worth over a 10-15 year period of time like like I was able to. So I was very fortunate that that my accountant made me buy my first property back then.
Deni: You don’t hear that often either. So that’s pretty interesting.
Brian Davis: Yeah. Most accountants are don’t know much about real estate. They’re skeptical about it. So that’s great. Brian, I want to hear about how you scaled and what changed in your real estate investing strategy over time. You know, most people start with a kind of smaller single family rental and then but scale up over time and their strategy tends to change. So can you tell us about what kind of deal you started with and then how your strategy evolved over time?
Brian Clayton: Yeah, for me, what I was trying to do was, was pay as much cash as I could. I what I would do is I would run my business and at the end of the year I would have a little pile of cash, could have been 20 grand, 30 grand, 50 grand. And then I would try to buy it, roll in with as much equity as I could into a deal and then put sweat equity in it to build up the equity and try to use as little debt as possible. And I know that’s not real, real popular in real estate investing, but that’s that’s what I did, because what I was trying to do was I was trying to get to ten or 20 grand a month in cash flow after expenses and operating costs from my rental properties. And so I was trying to knock off the debt payments and debt service as quick as I could. That worked for me. I know it’s not real popular with real estate investors, but I use debt almost, almost no debt. And now I have 20 doors and that’s why it cash flow then. Well, and cash flows now. Well, when I was mowing yards 20 years ago, I had a headset like this and I would I would cut grass all day and listen to talk radio. And between two talk radio hosts that I liked was sandwiched in Dave Ramsey. And so for like seven years I had 2 to 3 hours a day of Dave Ramsey in my head. And at first I hated and then as time went on, I grew to love him. And so his philosophy on building your business debt free and your personal finances as debt free as possible, we’re really just beat into my head. And luckily I learned those lessons early on because I was able to build my business debt free as well into a ten figure, an eight figure company, $10 million a year. And when I went to sell it, that was the only reason I was able to get that business sold was because it didn’t have any debt tied to it. A lot of my competitors, we’re trying to sell their companies as well, and they might have had a $5 million organization, but they also had like four and a half million dollars in debt. And at that size of acquisition, they don’t really take on the debt. You’ve got to clean that up after the sale. And so and so that philosophy worked well for me. Real simple single family homes that needed a lot of work that were maybe in foreclosure, maybe they were hood homes and they were ugly. And I was able to go in there with my crew, roll up our sleeves and build equity Day one.
Deni: Who was one of the person that was like a mentor or somebody that just gave you that spark or did you just…
Brian Clayton: For me, back then my mentors were my customers. And not that they were sitting me down and, like saying, hey, let me take you to lunch and teach you the ins and outs of real estate investing or something like that. It was more or less I was I had a wealthy clientele and I would do their services for them and I would just observe that these people were wealthy and they were no smarter than I was. And they had no differentiating magical talents or anything. They just took on a little bit of risk and actually did things. And I remember there was one guy that had an insurance business that seemed like he was living the life. He was always playing golf, always on vacation. And I was like, Man, this guy, he’s not an idiot, but he’s not he’s not like a genius. He’s just a normal guy. And so for me, that was like mentorship passively, where I could observe what these people were doing for a living. And a lot of times, eight times out of ten that they dabbled in real estate or had some kind of real estate or they were in real estate. And so for me that that durable type of investing just made sense to me. And I actually got to be a lot of fun. It was like I was playing my own little game of Monopoly, you know, just acquiring doors. And as a young kid, it made a lot of sense. It didn’t require anything really special or mysterious. It was just rinse and repeat. And I might have overpaid on a few deals, but over five or ten years later, you know, I ended up looking like a genius. So it’s like it’s one of those things you can get rich slow and you don’t have to have anything really uniquely special except for diligence and consistency.
Brian Davis: Yeah, absolutely. And that’s one of the things that we love about real estate as well, is that, like you said earlier, there’s no secret sauce. I mean, anyone can access it, Anyone can learn the skills to do it. You don’t have to have 180 IQ to be a successful real estate investor. You just need to learn the ropes and learn the process, which you can do virtually for free, or at least for a very small amount of money compared to, say, like a four year college degree.
Brian Clayton: Exactly.
Brian Davis: And also you said earlier that, oh, it’s not very popular to buy with cash or to minimize your debt. But with interest rates, you know, soaring over 7% on mortgages and those are home mortgages, much less investment property mortgages. I mean, more and more people are looking favorably investing with cash rather than trying to overleverage everything they possibly can.
Brian Clayton: I agree. And, you know, when I was navigating the 2008 crisis, man, I saw a lot of people lose multigenerational wealth in a matter of six months because they were overleveraged. And it was really, really, really sad. And a lot of it was in real estate as well. And so I was just really, really glad that I took the approach of going slower, doing it a little harder, not passing on deals because I would have had to become a little more overleveraged, you know, and I probably left some money on the table, particularly in the last ten years, but I’ve never missed a night’s sleep and wondering how I’m going to make my my debt service. So that’s my style. That’s my flavor. But it doesn’t mean it’s the only one that’s just what work for me.
Brian Davis: So are you still buying in cash to this day or are you still actively investing or are you using financing at all? Tell us about your current strategy for investing in real estate.
Brian Clayton: Yeah, my current strategy is to just take the cash flow that I’m getting and to look for deals that I can roll in all cash and not have to take on loans to get. And so that’s been hard in the last five, six years. And so quite frankly, I’ve been on the sidelines, you know, and, in 2014, 2015, I felt things were overpriced. And, you know, I was like, man, you know, a little of that. I know. But I think things are going to start reverting back to the mean and I think there’s going to be some deals. And I don’t wish this upon anybody, but I think there’s going to be some foreclosure opportunities, you know, in the next year or two. After 2008, I was buying up foreclosures for $50,000 and $60,000 that now are worth three and 400,000. And so I’m looking for those types of deals. And it’s not like a blood in the streets, Warren Buffett type of style, but it kind of is, you know, because I have to roll in with all cash. I don’t really want to overpay for something. And so that’s my style. And so now that rates are going up. And I think we’re going to kind of go through a little tighter recession then we’re already experiencing. I think we’re going to start seeing some deals come up. And so now I’m looking to put cash to work and getting some more doors. So that’s my style.
Brian Davis: So you said that you primarily bought foreclosures. Were you buying like pre foreclosures? You’re buying from the owner who had not whose home had not gone to auction yet. Were you buying like REO properties from lenders after they had foreclosed on the property?
Brian Clayton: Yeah, it was already after it was already foreclosed and bank owned. And honestly, it’s not like I, I went to the courthouse steps and try to beat out a bunch of other bidders. You know, I had a couple of real estate agents working for me, and they would bring me HUD properties and and I would look at them and I would run some numbers. But a lot of times, you know, it was like, golly, man, you know, 50 grand for a 1300 square foot home. You know, it’s in good shape. Hey, let’s just buy it and turn out to be a pretty good bet because, you know, 10-12 years later, and they’re worth sometimes ten x what I paid for them. And so, you know, that worked because there was deals to be had, you know, Now those deals haven’t been available as much. And so that’s kind of why I’ve been on the sidelines really just focusing on my core business. You know, that’s the other thing too, that I never really wanted to have real estate investing take away from the main thing. So my first business was a landscaping business. My second business is a tech company. I always wanted real estate to be supplemental passive, something that was not, you know, eating up all of my bandwidth because I always felt like there was like higher and better use of my bandwidth in my core business. And then I could take the proceeds from that and put it in real estate. So let’s work for me. And the thing is, when I sold my company and reinvested the proceeds from that into getting more, more doors, that enabled me to not have to take a salary. That is the only reason why my business, Green Pal, is where it is today was because for the first four or five years I didn’t take a salary out of it. So real estate kind of almost, you know, almost underwrote the second business.
Brian Davis: Yeah. Deni and I love that and we’ve been there ourselves. When you start a business, you need a long runway in most cases and, you know, a much longer runway than the average startup entrepreneur. Thanks. So Deni and I both had some rental properties to help us get started. It helps that I got free housing through my wife’s job. Deni House hacked several ways to score free housing for her and her husband. But yeah, all of that makes a huge difference in just extending that runway to get your business off the ground. Speaking of your business, Green Pal, you described this as an Uber for lawn care. So how does that work exactly?
Brian Clayton: Yeah. So Green Pal is an app that works like Postmates or DoorDash or Instacart or Uber, but for for lawn care services. So rather than calling around all over Craigslist or Facebook or Yelp and leaving voicemails, you just pop your address in our app and you’ll get quotes back and you hire the contractor you want to work with right through the app. Everything goes well. You schedule and pay them and it just happens like like clockwork on top of the Green Pal platform.
Deni: that’s ingenious. I have to say, my husband’s a contractor, so I just hear that and I’m like, What? So how did you even come up with that? Because I just think that’s amazing!
Brian Clayton: So my first business was a landscaping company, and I grew it to about 150 employees over a 15 year period of time. And then it was acquired. And after I sold it, I took some time off, worked on my real estate portfolio a little bit, got all that stuff tuned up, and then I got, quite frankly bored. I realized there’s only so many beaches you can lay on. There’s only so much like having fun you can do. And I needed another project. I needed another mission. And so I thought, Well, what am I going to do now? I thought, well, I built a landscaping company, and that was very blue collar and in the trenches. I’d like to see what it’s like to run a tech company. And it was kind of naivete as an asset. I didn’t really understand how difficult it was to start a new tech product from scratch, but I had the idea that an app should exist for what I just spent 15 years doing, that you should be able to push a button and just get this chore done and not have to, like deal with all the hassle and headache of wrangling a lawn care contractor.
Brian Clayton: And so I got two co-founders to start working on the first version of the app with me, and we taught ourselves how to code, taught ourselves how to build software. And over 2 to 3 years, we learned the skills we needed to learn and we were able to get the marketplace going in one city, Nashville, Tennessee, where I live. And then after that, we started rolling it out into other cities throughout the United States and it became a ten year overnight success. Now, green, green panels nationwide, United States 32,000 contractors use the app to run their lawn business, and around 300,000 homeowners use it to order services through them. And we still growing fast trying to get to a million users and still feels like day one. But it’s a lot of fun. A lot of fun running a tech company, a lot of different challenges. In some ways it’s the same as a traditional business, and in many ways it’s very different.
Brian Davis: Absolutely. Well, Brian, do you have any parting tips or words of advice for aspiring real estate investors or people who maybe have a few doors under their belt who are looking to scale and get to that point where you did of reaching financial independence with real estate?
Brian Clayton: Yeah, there’s a couple of things we’ve touched on in this conversation that I really liked. And both of you mentioned that, that you house hacked, you hustled, you know, you got a you were able to live over here for free while you rented this out. My point is, it’s like you hustled, you know, you hustled up that first deal, you hustled up the first two or three doors and it’s not like you just got your first property and you had all this free cash flow. And so that’s one thing I like to beat into people’s heads. It’s very much a long game. It’s a 5 to 10, 15 year play. You know, your former self will thank you that you started investing in real estate today. And that’s certainly been the case for me. I’m so grateful that my accountant 20 years ago beat into my head that I need to start investing in real estate. And so I guess my point is, is get in the game, get started today so you can build up that snowball because these small little decisions in real estate don’t add up. They compound and the sooner you like that, the sooner you get started, the sooner you can get the compounding rolling.
Brian Davis: Yeah. What you just said reminds me of that. The Chinese proverb that the best time to plant a tree was 20 years ago. But the second best time is right now.
Brian Clayton: It’s so true in real estate.
Brian Davis: Yeah, absolutely. Well, we put your URL in the comments here. Your green pal. Where else can people connect with you and with your company? Green pal, if they’re interested.
Brian Clayton: Yeah, you can download the app in the play store or app store and anybody wants to hit me up, you can reach me. Actually, Instagram is best place to find me: Brian N. Clayton. Just drop me a DM there.
Brian Davis: Awesome. Sounds great. Well, Brian, thank you so much for joining us today. This was a lot of fun and congratulations again on, you know, both your business success and your real estate investing success.
Brian Clayton: Well, thank you, guys. I enjoyed it. Thank you for having me on.
Deni: Thank you for joining us.
Brian Davis: All right, guys, we will see you next week, same time, same place. In the meantime, have a great week. And Brian, thanks again.
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