Clint Johnston runs a home building company in Birmingham, Alabama that’s been putting up houses for 34 years, and somewhere along the way it started doing something most builders never touch: keeping some of what it builds and renting it out instead of selling.
I caught up with Clint right after he got back from his family’s annual trip out to Montana, and once we got past fly fishing and horseback riding, we landed on an idea that runs through almost everything his company does.
At one point I asked him for the version of his pitch you’d give someone in a cab ride, no notes, no deck, and what came back was somewhere between a real estate summary and a philosophy on how to run a company without needing to be the biggest name in town.
He doesn’t walk into the office chasing the home run. He shows up looking for the single. It sounds almost too simple until you hear him explain how that mindset carried his company through 2008, when a lot of builders around him didn’t make it, and how it eventually pushed them into a completely different side of real estate that now makes up a real part of what they own.
“We come in the office, and every day we want to hit a single. We don’t walk in the office thinking, where’s my home run today. We walk in the office and, where’s my single?”
We spend a good chunk of the conversation on why a home building company would decide to start keeping houses instead of selling every single one, what that first rental deal looked like on paper, and what happened years later when an appraiser came back with numbers that caught the whole team off guard.
“Then 2008 happened. Stock market crash, real estate crash, and we were very fortunate in how we were able to navigate that. We decided at that point that we never wanted to go through 2008 again, and we did not want to be dependent on can we sell houses or not in order to run our business. So we decided we were going to diversify.”
“We got a cash flow appraisal, and we looked at it, and we turned, and we looked at it, and we turned, and we were blown away at what the market was paying in 2022 for BTR properties. We swore we’d never sell anything. We’re a long-term holder, we like to play the long game, we’re the tortoise, not the hare. We were blown away at the appraisal amount, and so we took it to market and sold it. It was our first BTR transaction ever.”
He also gets into the kind of renter they’ve ended up attracting, and why that demographic surprised even him.
“Our average credit score is about 710. And our average renter’s income average is about 120 to 130.”
From there we get into culture, and this is where things opened up. Clint tells a story about a hire that went sideways almost instantly, and the decision his leadership team had to make within just a few days of that person walking through the door. He talks openly about what it costs to protect how a team treats each other, even when the short term looks bad, and about sitting across from someone and telling them something hard because you actually care about their future.
“On day one, they came in like a wrecking ball, Michael. It was impressively bad… We made the decision that although it was just day three, we were gonna terminate this employee… I had to draft an email and send it to our team company-wide that this employee was no longer with us. And when I hit send, Michael, I was like, this looks really bad. But I got more positive feedback and more thank yous from our team because we were willing to protect our culture, and I was not going to allow this person to come in and treat our team with anything less than respect, because that’s what we expect of each other.”
Money comes up too. Tower Development doesn’t take outside investors, and Clint walks through the thresholds they’ve set for themselves before taking on new projects, the local banking relationships that go back decades, and a line his CEO told him during his first week on the job about playing for the green jacket that has apparently stuck with Clint ever since. It stuck with me too.
“I’m playing for the green jacket on Sunday at Augusta. I’m not playing to win on Thursday, and I’m not playing to win on Friday, and I’m not even playing to win on Saturday. I’m playing because I want to be wearing the green jacket.”
He also opens up about the mistake that still bothers him more than any other. It’s a pride kind of regret, the kind he says he still feels every time he drives past the old office. He’s refreshingly honest about it.
“We did not have the right leader in that business unit, and the rest of us took our eyes off the ball… I don’t think anybody that was around that time in a leadership position doesn’t still to this day drive by that old location and think, hmm, we missed it there.”
Along the way you’ll hear about Builder 20 peer groups, running the business on EOS, and a countdown Clint keeps on his calendar for how many Sundays he has left with his teenage son before college. That last part caught me off guard in the best way.
“I’ve got a tracker on my calendar every Sunday that reminds me how much time I’ve got left with each of them before they leave the house… I told my son, I’ve got 204 Sundays left till you go to college. I’m gonna use every one of them. One of us is gonna break, and I promise you it will not be me.”
This conversation moves through land development, culture, and capital, and what Clint has learned about protecting a business for the long haul. He brings a level of honesty that isn’t always easy to find, and by the end I found myself rethinking what winning even means in this business. Give this one a listen and see if hitting singles changes how you think about your next deal.
About Clint Johnston
Clint Johnston is President and EOS Integrator at Tower Development, Inc. and Fairin Realty, LLC in Birmingham, Alabama. He joined the company in 2007 and worked his way through nearly every operational role before becoming President in 2023, a stretch that has seen the company double both revenue and net income. Over his career he’s helped oversee more than 2,000 homes and build a build-for-rent portfolio worth well over $100 million. He’s an active member of an NAHB Builder 20 Group and has been married to his wife, Shannon, for 21 years. They live in Birmingham with their four children.
Tower Homes: https://www.towerhomes.com
Fairin: https://www.leasefairin.com
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