The ROI of Design

Jul 21

How Atlanta Investor Denny Faircloth Turned $35 Cabinet Decisions Into Six-Figure Profits

In real estate investing, the difference between profit and loss often comes down to a single decision: white cabinets at $3,500 or green cabinets at $6,400. For Atlanta-based investor Denny Faircloth, these seemingly small choices compound into dramatically different outcomes—and understanding which five renovations to prioritize out of ten desired upgrades separates successful flippers from those who leave money on the table.

Since 2006, Faircloth has been flipping homes and building rental portfolios while co-founding Real Estate Connections—a networking platform with over 20,000 members celebrating 15 years of monthly events. His philosophy? Perception drives value, and design choices must align with ROI—not HGTV fantasies or personal preferences.

From Family Tragedy to Strategic Partnerships

Faircloth never planned to enter real estate. Growing up in a lower-middle-class family without entrepreneur mentors, he found the industry intimidating. But when his father died and his mother couldn't afford their home, he had no choice. The renovation went surprisingly well, revealing that real estate "wasn't as scary as I thought."

His breakthrough came through partnership. While living in Chicago, he reached out to Peter Pasternack, lead character of a home flipping TV show, with zero expectation of response. They met for coffee, became friends, and remain investing partners today.

"I cheated. I partnered with someone who had experience and helped me avoid a lot of the pitfalls and lessons he'd already learned." — Denny Faircloth

The $3,000 Cabinet Decision That Reveals Everything

Currently flipping a $200,000 downtown Woodstock property with a $100,000 renovation budget targeting $425,000 sale price, Faircloth constantly faces ROI decisions:

All white cabinets: $3,500
Luxurious green/blue cabinets: $6,400

Nearly double the cost. Will buyers pay more, or is it just HGTV influence? Through network leverage and vendor negotiation, Faircloth found green lowers with white uppers for $4,800—close enough to justify differentiation.

"Every single step of the way, there's this intersection of ROI and design. If you just hire a designer without ROI consideration, you're either adding to the price or eating your margins." — Denny Faircloth

Every decision compounds: black shutters or oak? Standard garage door or custom wood? Stippled ceilings or smooth? Basic lighting or recessed? Each choice either increases sale price (reducing buyer pool) or decreases profit margin.

The Power of Community: 300,000 Connections

In October 2010, Faircloth and Pasternack launched Real Estate Connections. Fifteen years later, they've never missed a monthly event—rain, shine, or holidays. Over 300,000 people have attended, with typical monthly crowds of 200-400.

Why continue 15 years without scaling outside Atlanta?

"The things that have happened to me as a result of being in those rooms are the same things that happen to everybody else. Connections are made, partnerships form, business gets done." — Denny Faircloth

A PadSplit account executive walked into their event two years ago. That connection led Faircloth to set up a dozen properties for clients, purchase four with partners, and now launch a fund raising millions to buy hundreds more units.

Solving the $60 Billion Government Failure

Forty million Americans can't afford the first month's rent, last month's rent, security deposit, and utilities in their own name. In Atlanta, cheap studios run $1,500 monthly—a $2,000+ upfront cost.

Someone earning $35,000 annually at an Amazon warehouse isn't a drug addict. They simply can't afford traditional housing. Government intervention hasn't solved this. California spent $60 billion on affordable housing without delivering scalable solutions.

Faircloth sees a different path: What if a million investors each bought one 6-8 bedroom property and converted it to PadSplit co-living? That creates 6-8 million affordable housing units where government programs fail.

PadSplit 2.0: Quality Meets Affordability

Early PadSplit properties focused purely on function. "PadSplit 2.0" involves experienced investors delivering better products at the same rates: white shaker cabinets, quartz countertops, tile backsplashes, hardwood or LVP flooring.

For flips, Faircloth chooses colored cabinets. For PadSplit, he prioritizes keeping rent affordable while maintaining quality. Residents get memory foam mattresses identical to what's in his own home—because tenants working 2-3 jobs deserve the most comfortable bed possible.

"If they leave, I want it to be because they saved enough money living in my place that they can buy their own place." — Denny Faircloth

It's already happening. One woman went from homeless to owning a 10-bedroom PadSplit property in 20 days—living free in one room, collecting rent from nine others, and making $10,000 annually after expenses.

Three Tips for Real Estate Success

1. Pick Your Lane and Stay In It: Stop chasing shiny objects. Master one strategy. Understanding your buy box means you execute deals in your sleep or quickly assign deals outside your focus.

2. Be Genuinely Excited: Until you're passionate about your strategy, you won't sustain it. There are 1,000 ways to get fit; Faircloth hates 997 of them. He runs, lifts weights, and plays soccer. If forced to swim, he'd quit. Find the real estate strategy that excites you.

3. Ensure It's Lucrative: Passion without profit won't sustain business. Long-term rentals might excite you, but if the math doesn't work at current prices and rates, pivot to strategies where numbers pencil—like co-living models generating superior returns.

The Network Multiplier Effect

Individual experience has limits. But when you combine networks—all the contractors, lenders, inspectors, and property managers that hundreds of experienced investors know—you're one phone call from solving any problem.

Even after 15+ years, when facing unfamiliar challenges, Faircloth and Pasternack are one text away from someone with the answer. This "mastermind" effect exponentially increases value beyond any individual's knowledge.

The Opportunity in Crisis

The gap between housing prices and wages continues widening. No army of builders constructs affordable starter homes—the biggest margins exist in luxury properties. While BlackRock can pay $400,000 for starter homes with near-zero returns on volume, individual investors can't make those numbers work for traditional rentals.

But PadSplit economics change everything. The same property that doesn't cash flow as a single-family rental generates strong returns with 6-8 paying residents. Cities can't simultaneously demand affordable housing solutions while regulating away co-living options.

Connect with Denny Faircloth at DennyFaircloth.com for access to Real Estate Connections networking events and innovative affordable housing strategies that prove doing good financially by doing good socially isn't just possible—it's profitable.

Resources Mentioned