(light music) (laser crackling) - Funding for "Working Capital" is provided by the friends of KTWU, Raymond C. and Marguerite Gibson Foundation, Kansas Department of Commerce, and Go Topeka.

(light upbeat music) Welcome to "Working Capital."

Today we're happy to have D.J.

Clark from Still Producing with us, and D.J., we're in one of your fantastic properties.

We're in the midst of something.

So first off, tell us a little bit about Still Producing and what you guys do.

- So, I own a real estate company here in Topeka, a local real estate investor.

So that entails property management, construction, and buy and hold and flipping real estate.

So we do every single aspect of the business that I just named.

And we have roughly 50 units.

I'm the sole owner of it, and me and my friend, I also have another 30 units on the side.

So yeah, I've got over 50 units here in Topeka, Kansas that I own.

- And I think you just hit a couple milestones also.

So before we get into how you got here, tell us what we're celebrating kind of capital wise, since our show is "Working Capital," tell us how you've kind of grown.

- Yeah, so I started back in 2017, started back in 2017 and just stuck with it, you know, stuck with it.

And I started buying houses and it was, you know, small houses.

Started with one or two and, you know, and just kept getting better and better and working hard, and, you know, I got to 50 units, so that's been a milestone for me.

And you know, that's how we got there.

- So I walked in today, you know, and you have crews coming in and out, you know, you're managing a lot of stuff.

But to get there, that first house, how much more intensive was it with your hands on compared to now when, I know you're still getting hands on, but when you are able to go multi-unit, tell us when the first idea and was it okay, was your wife okay with it?

Were the parents saying no?

Tell us about that first, "Hey, I'm gonna get into property management."

'Cause you hear some horror stories, but I think you're one of the good stories is what I'm finding out here, so there's more needed like that.

So that first house, how did you get into it?

- That first house, it was a foreclosure.

I seen it, they had it up for sale for 30 grand and I didn't even know how to do the paperwork, but I had the money, you know, so I had the money.

I told my mom, I'm like, "Hey, I'm buying this house."

She's like, "Son, I don't know about that."

So I'm like, "Hey, we're doing this.

I need you to show up.

Help me get the paperwork done."

So we got the paperwork done, got the house secured.

It was a foreclosure and ended up selling it roughly two years ago, two and a half years ago, and made 100 grand on it.

- That's fantastic.

I mean, you're fixing up Topeka.

At this point too, you're also, you're providing jobs and giving back to the economy also, since you're not just hands-on yourself.

Let's talk about a familial connection and how that can help entrepreneurs start out.

- So real supportive parents, very supportive since I was young.

You know, always, you know, work, work, work.

Seen my mom work, start from nothing, you know, mom started from nothing, dad started from nothing.

Seen them work, work, work.

And just instilled in me, you know, stay at it.

Stay at it.

Now, I've asked her to put in on some deals, she hasn't done that, but- - Well, yeah, yeah.

- But, you know, like I say, instilled that in me when I was a kid and just, you know, work hard and seeing them go to work every day.

You know, my dad worked night shifts, you know, nights for 20 years, you know, and really didn't see 'em a lot, you know, coming in and out of the house, sacrificing, you know.

So that was a real good help on my journey.

It was a real good help.

- 'Cause when you have that foundation, the parents, they want better for their kids.

And especially when you have an entrepreneurial spirit, because I usually, there's some ups and downs, you know?

- Correct, correct, correct.

- The thing is you still having that drive and people still believing in you, even if you've had a little failure 'cause I don't think you can reap your full potential without learning from failures, right?

- [D.J.]

Correct, correct, correct.

- Let's go to that a little bit.

Starting out, was there any big hits like, "Oh man, I ordered the wrong something here," or "This paperwork here," or "Someone moved in and I decided to go rental and two weeks in, they put holes in the wall."

Tell us, starting out, we're still in the starting period, what was some of those big obstacles?

- I don't know where to start, you know, but you know, from tenants tearing up your places to letting people move in and, you know, family members move in and giving 'em a shot and it didn't work out, but one story I got, bought a fourplex and bought a fourplex from a guy and I bought a fourplex and a tenplex from him.

The tenplex, I still own, the fourplex I bought from him, went to remodel it, try to get it done, didn't know I had to have permits on it, you know, one of those deals.

- [Jay] Where did you go?

- I lost 20 grand on that deal.

So, you know, it's a lot of, I don't know where to start at.

- Did that almost sink you?

I mean, you have those kind of hits and, you know, that's a chunk of change for most people.

- Correct, correct, correct.

- Even in when you hear property management, I mean, some people like, "Oh, property management, they're making lots of money."

You're dealing with margins here, so- - [D.J.]

Correct, Correct.

- How close were you to walking away?

- That right there was, I tell you what, it made me run to the car business.

So, you know, I had a hiccup and it actually made me wanna get off track.

You know, it made me wanna get off track and not stay on that same road- - Just pivot it a little bit.

- Yeah, yeah.

- Gives perspective.

- Very discouraging, very discouraging.

- Make sure you want to actually go down that route, 'cause if you have that that early in, you know you're gonna have a few of those hits somewhere else.

- Somewhere else, correct, correct, correct.

- So what got you back in?

What took you back out of cars and back thinking, "This is where I wanna go, this is where I wanna get back"?

- Just knowing what the end goal was, knowing what the end goal was, that really got me back on track.

Knowing that the end goal, you know, was to get to where I need to be, to be able to provide and create opportunity for different people in my family.

That's what got me back on track.

- And not just that, I would say you're giving back 'cause these homes, people's lives are changing in those homes that you're providing.

So you're fixing up these properties.

You're in town, you're local, you're here, 'cause you know those horror stories of when you get in someplace and you may not know that your landlords stayed away.

- [D.J.]

Correct.

- So, you know, you're in touch.

So these families move into these homes that could have just gone vacant, could have just stayed, and you think of those kids growing up and maybe getting opportunities.

So you don't know what you're kind of fostering there.

And let alone, like you say, the jobs you're trying to give to everybody.

- Correct, correct.

- Start with the small units, how did you start kind of scaling up this operation?

How did you think we can really ramp this up because we know what we're doing, so let's just scale us up?

- Correct.

When I really seen that was once I knew I was good at it and I really liked it, you know, 'cause you have to like something to be able to stay at it and show up, you know, day in and day out when it doesn't look good.

So how I really scaled it was knowing I was good at it first.

Then one of my big things, and this is a really, really big takeaway for me and a lot of people just watching, is I learned from a lot of people.

You know, you don't know it all.

So I've had people that mentor me, you know, my realtor, you know, friends, family, wife, you know, you just learn from everybody.

So that was a big piece of me scaling it up.

It wasn't just me, you know, it was a team thing, team effort.

That really helped me, my banker.

- All the people that backed you already for doing that right also.

- Correct, correct.

- On that, though, the one we should really touch on then, how does your wife deal with this?

Because you know, this is lots of times people's careers and where they're at pulls 'em more away in those places than at home.

How did she feel about this and how is she a part of the business, either up front or behind or, you know, what kind of support is there from your family?

- Oh, great support, great support.

So this involves me working.

Sometimes I show up at seven, sometimes I'm in office till eight at night, six in the afternoon, Saturdays, Sundays I'm working.

So having her being able to take care of the home while I'm out doing stuff, looking at deals, running crews, you know, 'cause when you're working for yourself, you're an entrepreneur, there is no schedule.

So, you know, being able to get my daughter and son, get our daughter and son, you know, to daycare and stuff like that, so it's a team thing, you know, and that's how she's helped, you know, real pivotal point in my journey.

- It's time for a short break.

Stick around, when we get back, we'll learn a little bit more about D.J.

's entrepreneurial spirit.

You've been watching "Working Capital."

- Hi, I'm Len Richter, a KTWU viewer and supporter.

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(light orchestral music) - Welcome back to "Working Capital."

Okay, D.J., I did read you just hit kind of a financial milestone transaction wise.

So going from that first unit, that first foreclosure, where are you sitting at now with that capital flowing in and out?

- Up and down, up and down, you know, but five million in transactions from selling, buying, you know, we hit over five million in transactions.

- But to get there, you kind of had to learn from scratch a little bit 'cause you didn't grow up in construction trade.

How did you go back and start learning these skills?

You know, even if just the demo side of things, let alone the building side.

What was that experience like?

- It was a really, really good experience, I enjoyed it.

You know, in fifth grade when they do that test on you where they say, "Oh, what do you want to be when you grow up" and all that?

So mine was an architect, you know, so I was like, you know, I kind of always think back to that at Williams Magnet, you know, when I went there- - [Jay] The spark was there.

- Yeah, yeah.

So just being hands-on and figuring out that's something that I actually like, you know, actually like to do, wanting to be hands-on, wanting to put stuff together, you know, helping people out.

You know, it's an amazing thing 'cause there's so many things that go into it, you know, it's so many things.

You've got, you know, your construction team, you've got your management team, you got your acquisition team.

Now, granted, all three of those aspects, you know, I do, we do in-house.

- [Jay] Yeah.

- You know, so much goes into it, you know, and then you just connect with different people and you meet different people.

So it's real nice.

- So you do have a lot of hats on then, like you say.

So from marketing to real estate, I think it's part of the entrepreneurial journey is being able to pivot.

So like you spoke to in the first segment, you had a hiccup, you needed perspective, you stepped back, and you decide you want it back in there.

But I think that also applies to what you just talked about in fifth grade, how you wanna be an architect.

So a lot of, I think life is kind of going with the flow in ways.

So you do have to kind of weave and you may not do something you totally love, but there's always time and maybe opportunity to get back into those things you love.

So you fell back into it.

So if you are kind of a, I don't wanna say stuck in life, but if you're looking to start your own business, kind of look back to what you used to love when you were little and usually that might be a good starting point.

So I just think that's fantastic, you loved architecture.

Now basically, you're renovating people's architecture and kind of changing it up with your own eye.

So you get in a house, how do you first decide what all you're gonna change up?

You know, who helps you with that?

What are all the decisions, you know, these windows are going, or that's going, how do you decide the design side of it?

- It depends on the approach.

Each property's different.

You know, each property's different.

Don't take this the wrong way, each side of town is different.

You know, so each demographic is different.

- Well, just to get the simplest point, you have to keep it economically viable for those neighborhoods.

- Correct, correct, correct.

- You want to be something to reach for in those neighborhoods, each spot, 'cause you wanna make your best product.

But yes, you don't want overprice/underprice places there 'cause then, so no, I mean, that's, yeah.

- Correct, correct, correct.

- But you're raising up any neighborhood you go into because of the remodel.

- Correct.

- So that's fantastic.

- Correct.

You know, and so the approach is different with every property.

You know, we wanna make sure that the mechanics are on point.

You know, we wanna make sure that no water's getting in, we wanna make sure it's energy efficient.

You know, we wanna make sure that whoever's living there has a comfortable home.

You know, that's what we wanna make sure.

So every approach is different.

You know, we go in and then it depends on, if we're holding it, depends on if we're selling it, you know.

So it just depends, it depends.

But that's what we look for, though, it depends on area and a lot of things go into that.

- Okay.

Like you say, it's a process, it's not the same every time.

But how do you decide if, you know, I wanna keep this as a rental or this is definitely a sale, is it more like, I'm just in love with this house and that's why I want to keep it, I wanna keep it on portfolio and keep showing it?

Or how do you really decide which ones are rentals, sales, flips, or maybe just a quick flip, you know, so you're not all the way done, but someone else wants it?

- Correct, so we look at returns.

Everything, you know, for us is about what's the return gonna be?

You know, so if it pays for itself through renting it, we'll keep it, you know, if we're like, "Hey, cash flow's gonna be pretty tight on this," we'll flip it, you know, and sometimes flipping it doesn't mean we'll go in there and fix it.

We might just buy it, turn around and sell it, you know, next day.

So that's what we look at, though, we look at returns, you know, we look at cash flow.

How many properties do we got in this area?

How many properties do we wanna build in that area?

Okay, now we're looking to go to Southwest Topeka.

We want to get this many over here.

So, you know, that's kind of what we look at.

- Have you thought of or ventured into new construction at all yet?

- Not yet.

- Not yet?

- Not yet.

I do have some land.

- You have some land?

- Not yet.

I'm taking my time, I'm taking my time.

Reviewing stuff, dealing with an architect, talking through some things with some different people and just wanna make sure we got a good approach to it.

But no, we have not done new construction yet, though.

- Well, and this isn't holding you to anything.

This just makes, you know, I like hearing this kind of stuff.

So hearing land, is that more of a, might build a community as opposed to I'm slicing it up into four tracks of land?

Or I mean, are you one of those guys that sees community and sees it more as the whole, or are you thinking just property by property?

- So I do see that, you know, I see a lot of people doing, it's something I wanna do one day, you know, but I wanna do what works for me.

So probably build one to start out with, and just, ease my way into it.

So when I look at it, I do look at it by the house.

- Gotcha.

- I look at it by the house.

- Yeah.

- So.

- All right.

How do you go around now and find your crews as you've gotten larger with your acquisitions, with your management portfolio?

Are they separate crews that come in that you're hiring?

Is it kind of like white label services?

So, you know, as the project manager, it's a plumber from here, it's the drywallers from here, or is it one other unit you're working with?

- So contractors, we've been working with them probably about since 2017, 2018.

- Okay.

- And pretty much- - So good relationship then?

- Yep.

Same amount of guys.

They don't do electrical.

So we do have to bring in electricians, but plumbing, tile, framing, they do it all.

So it's all in-house.

But yes, basically a white label thing to where they've got their own LLC own set up.

We run it like that.

- That's fantastic.

So I mean, that is a good way to kinda break it up a little bit 'cause you don't want to wear too many hats when you're scaling this big.

- Correct.

- 'Cause you will get kind of lost in the weeds here and there, so.

- Correct.

- Where do you want to see this go in the future?

I mean, sky's the limit, we're just dreaming here 'cause we know you're gonna, we know you're on a path.

Where do you want to take this company, where's Still Producing gonna be in 10 years?

- Good question.

So I told myself that I wanted 50 units and I got there, you know, now I'm telling myself I want 100.

So I want 100 units, nice, clean, solid units, not just 100 properties.

Nice, clean, solid units.

Then we're gonna expand.

We're gonna go into Kansas City, do some stuff.

We might go into Wichita, we might go out of state, you know, but I wanna lock down 100 units here, you know, stabilize that so in 10 years we'll have 100 units here.

Then we'll have different stuff in different markets.

So in 10 years, I see, I know I could probably easily have 200 units.

Pretty easy.

That would pretty conservatively, I think, I think that's where we're gonna take this.

- So just the property management, the construction side, the reconstruction side of it just blows my mind, what you're dealing with already.

The tenants, how do you deal with the tenant side of things then?

Who helps you with that?

Or what kind of team do you have involved with that more of the personal touch side, you know, and good companies or not, something will always happen there, there's good or bad.

So how do you deal with your public?

- So me and another lady, we started out doing some stuff.

Her name was Christine.

We started out and she got out of the business.

So we started with 20 and it was pretty easy dealing with tenants.

- Yeah.

- And now I've got my cousin in the office and she's managing I think 80 altogether and I help her out, you know, here and there.

- So it's still a smile, thank you, cousin, or is it oh you gotta do something, cus?

- No, no.

- All right, all right.

- So how we deal with people is we treat everybody the same.

You know, we understand this is a house that they're living in, you know, they're raising their family, you know, there's memories they're creating, so you have to be really aware of that, you know, and treat everybody the same.

Being nice to tenants, even when you're having a bad day is something you gotta show up and you can't just fly off the hook.

So it's a daily thing that you have to maintain.

You know, relationships and, you know, we might mess up, you know, then we've gotta go back and say, "Hey, we apologize."

You know, so that is a skill that it takes, and I couldn't do it without my cousin.

I couldn't do it without her, you know, 'cause sometimes I have a short wick, you know.

So, but it's tough, you know, but you gotta be nice to tenants.

You gotta treat them with the same respect, you know, that they treat you, you know, we don't, we value ourself in not having any city calls.

When the city gets over there and says we need to fix something, we get over there and fix it.

You know, so we treat tenants, we treat 'em with respect, you know, and nothing's gonna be perfect, but we treat everybody with respect.

- Think of the tenant side and even your side now, the current market, inputs for construction, people's grocery bills at home who are your tenants.

How does someone, I'm gonna still say you're, I mean, to me you're still starting out just 'cause your drive.

So you have quite a few units, but you're still on the side where these fluctuations can really take a hit 'cause you are just playing the margins, you know, you're playing small percentages here over a lot of units.

- Correct.

- How are you adapting and what challenges are you finding with tariffs on building materials or, like I say, tenants maybe not having enough scratch to worry about next month or you just not being able to worry, you know, be able to scale rent year to year at slight levels just to keep up with everything else also.

I mean, how are you navigating this really rough water with the market right now?

- Not rushing, keeping our size, moving on our time, you know, not with anybody else's time.

Just because we see a deal out there doesn't mean we go do it.

You know, keeping a nice reserve to the side in case something happens and just understanding everybody's situation.

You know, you have to be willing to understand this, I mean, I will never say who, but there's countless tenants that we have, you know, let 'em slide on rent and, you know, this month and they get us back or we set 'em up with a payment plan, you know.

So being understanding in every situation is different.

- So you keep outside of it.

- Correct.

So navigating that is really being realistic with yourself, you know, not rushing.

And just understanding that every situation's different 'cause times are rough right now.

And so, you just gotta understand everybody's situation.

- That's one of the best things with having the person who was involved with the property, local or even semi-local, like you saying you're going to Kansas City, I mean, 60 minutes, that's not bad because you can still be there and be present and you can see that human side where it's just not opening up my ledger.

Oh no, two months late, two months late.

You know, I don't watch your tenants all coming, "Hey, I can't make it this month."

But, you know, I think people, I think most people don't take advantage of that.

So it's nice to see when you do have people with some heartstrings still here and there in business.

- [D.J.]

Correct, correct, correct.

- You know, some people make it being no emotion, but to me, this kind of stuff, anytime you have tenants and properties, or just even small town entrepreneurial spirit, you gotta keep the community as family, so.

- Correct, correct.

And it's tough because then, you know, there's people that's been living two years and something might happen.

I mean, and stuff happens, stuff happens with everybody.

So you've gotta be able to say, "Hey, let's look at this.

Let's go back, let's look in the software, let's look at their track record, let's see how they have performed."

And then make a decision, you know, make a decision without emotions and understanding, you know, now you can't let people just come in and two months go down, two months, three months pass.

- No.

- You know, then we'll, you know, then we approach that a different way.

- Yeah.

- But, you know, yeah.

The human side just like you're saying.

- Yep, 'cause dealing with someone's home, you had a good foundation.

These are foundations for other people's families.

- Correct.

- So, and you don't know that, I think probably 80% of Tokepa, I'm just showing this out there, since people can just throw out numbers willy-nilly these days on the media, a large percent of Tokepa is probably paycheck to paycheck.

So you being able to see that side of it kept some people probably in their homes instead of worrying and then you think of those kids and trauma and anyways.

- Correct.

Correct.

- I love how you have passed your love along, through what you're doing and kept it in the community.

So we always appreciate great entrepreneurs who give back and, you know, in multiple ways.

So D.J., it's been fantastic learning about your company.

We hope you reach what you're looking for in the future and keep up the good work.

- Appreciate it, appreciate it.

Thanks for having me.

Appreciate it, man.

- Thanks for watching "Working Capital."

We hope you've enjoyed learning a little bit more about D.J.

and Still Producing.

We hope to see you next time.

Thanks for watching.

(bright music) To catch up on previous episodes of "Working Capital," scan the QR code with your phone or go to www.watch.ktwu.org.

(light music) Funding for "Working Capital" is provided by the friends of KTWU, Raymond C. and Marguerite Gibson Foundation, Kansas Department of Commerce, and Go Topeka.