How David Buttross Built a $100M Portfolio by Identifying Undervalued Assets
David Buttross, founder of Buttross Groups Real Estate Company and veteran Texas real estate investor, started his journey at age 15 with an eye for value creation. His latest venture – an 8,500-acre solar farm development in East Texas – might seem distant from his first real estate purchase, but it follows the same fundamental principle that has guided his career: putting assets in the right hands at the right time.
“Work on solving somebody else’s problem, stay engaged with helping to make the world a better place,” Buttross explains. “The bigger problem you can solve for somebody, the more money you make for solving the problem.”
This philosophy has served him well. Starting with $30,000 saved from mowing lawns as a teenager, Buttross purchased his first property at 15, creating a corporation to handle contracts he was too young to sign. Over the following decades, he built a portfolio worth over $100 million by identifying undervalued assets across various real estate sectors and matching them with the right owners.
His approach has always been countercyclical, with a focus on undervalued assets across different sectors. In the 1980s, he started with single-family homes, gradually scaling to fourplexes and multi-property packages. When larger investors were solely focused on 100+ unit apartment complexes, Buttross found opportunity in smaller properties, often consolidating multiple 50-unit complexes into more attractive 250-unit packages that commanded premium valuations.
As markets evolved, so did his targets. He ventured into warehouse and industrial buildings in small towns, acquiring properties for as little as $2-3 per square foot. By 2005, he had moved into larger office properties, purchasing five buildings totaling 180,000 square feet. When golf courses fell out of favor with investors, he saw opportunity there too. More recently, he identified value in timberland when labor shortages at mills drove down prices, viewing it as an inflation hedge.
This follows his proven strategy of buying assets at a fraction of replacement cost: “If you buy it below replacement cost, like a third of replacement cost, and you have 3% inflation, you end up with a 9% return on your asset. Whereas if you bought something at replacement cost, you’re only going to get the 3% return from inflation.”
“I think the only place in the market that makes sense right now is the office market because nobody wants to be there,” he says. “You can buy at replacement cost, and then eventually if you’re in a market where the office product will fill up again, it’ll go back to close to replacement cost.”
The recently acquired Northwest Austin office property will become a small business and nonprofit incubator, addressing a common challenge Buttross has observed. “The biggest mistake they make is they’re like, ‘well, we’re going to grow to a 10,000 square-foot business, so we’ll go ahead and rent that now’ and they run out of money because they can’t afford to pay their rent,” he explains. His solution is to create a range of flexible spaces – from 1,000 to 10,000 square feet – allowing businesses to scale up or down as needed. “As they grow they just move across the hall to a bigger space, or if they need to shrink, they move across the hall to a smaller space.” The concept includes shared amenities like reception areas and copy rooms, helping small businesses and nonprofits maintain professional operations while minimizing overhead.
Looking ahead, Buttross Groups is focusing on the convergence of real estate and energy infrastructure. Beyond the East Texas solar farm development with Total, they’re developing a 2,100-acre project combining a data center with solar power generation. These projects address growing energy demands from cryptocurrency mining and AI computing while supporting grid resilience in Texas.
For aspiring real estate investors, Buttross offers distinctive advice: don’t start by buying property. “Keep your capital and go work for someone that’s got a hundred projects going on, even if you work for them for free,” he advises. “You’ll get to see the start and finish of a project all in one month… make mistakes on somebody else’s dime and actually learn a whole lot more from someone who’s doing 100 deals a year.”
This focus on learning and problem-solving has defined Buttross’s approach throughout his career. “I make as much as I can on every deal, but I probably make 75% of what someone else would make for solving their problems,” he reflects. “The byproduct of doing good and solving someone else’s problem is a little bit of compensation.”
