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The Fixer-Upper Empire of Chip & Joanna Gaines

How flipping a 400-square-foot house became a multi-million dollar business.
The Fixer-Upper Empire of Chip & Joanna Gaines
The Fixer-Upper Empire of Chip & Joanna Gaines

There’s an old proverb: “If you want to go quickly, go alone. But if you want to go far, go together.” Whether you’re starting a business, founding a movement, or setting out to build a life off the beaten path, this journey we’re on is always better when shared. That’s what we believe at Selfmade — and it’s a belief shared by the partners we’re profiling this week: Chip and Joanna Gaines.

To celebrate the second month of the year, each week in February we’re profiling a famous duo: and there are few more famous right now than the stars of the HGTV home makeover show, “Fixer Upper”. Chip and Joanna—who have become so well-known you hardly need to say their last name—have put themselves, and Waco, Texas on the map. But what really inspired us is how they’ve done it all on their own terms, and the way that they’re still hungry to see how far they can go, no matter how far they make it.

Today, the couple has turned their HGTV show into a launching pad for a multi-media empire spanning a product line, restaurant, cafe, hotel, and even a shopping destination called Magnolia Market at the Silos. And as if that wasn’t enough, they’re now working on launching their own TV network with Discovery called The Magnolia Network.

Together, they have a net worth of $20 million, but they still live in Waco, are still raising their five children, are still focused on their mission of giving back to their community, and are still an example of how a well-balanced working couple can use each of their strengths differently. But how did Chip and Joanna find their way — and find each other — when neither dreamed this is where the journey would take them? To answer that, we’ll have to go back to the beginning.

 

IT STARTED IN A TIRE SHOP

Joanna Gains grew up in a family that embodied the American Dream. Her parents met in South Korea when Joanna’s father, Jerry Steven, was an American soldier stationed there in 1969. Joanna’s mother, Nan, flew to American to marry Jerry when she was just 19 years old—but far from a warm welcome, instead what Nan got when she arrived was a rift in her now-husband’s family. Jerry’s family disapproved of him marrying a Korean woman outright. But rather than be swayed, the couple chose each other and cut off their racist family members—very much in love, and on their own against the world.

For money, Jerry got a job working in a Firestone tire shop, and over the years he climbed his way up the ladder until he was an owner of one of the franchise stores. That story had an impact on Joanna and her sisters. They were taught by their mother to be proud that they lived in America, and that it’s a place where you can do anything, and where dreams come true.

When Joanna graduated college, this is the life that she thought she wanted to get away from. She took her Communications degree from Baylor, packed up, and moved to New York City in hopes of becoming a news anchor. Instead, while she was there she began developing an interest in design, and found that the small boutiques in New York felt like home to her. She began to dream of opening one herself, but soon discovered that Journalism and New York life were not for her. So she returned to Waco and worked in her father’s Firestone tire shop. Joanna assumed she would grow up and inherit the store. Instead, it’s where she met a person who would change her life forever, and send her in a dramatically different direction.

 

A SERIAL ENTREPRENEUR SETTLES DOWN

Chip Gaines’ upbringings overlapped with Joanna’s in more than one way. While he was originally born in Albuquerque, New Mexico, his parents moved to live on their parents’ ranch in northern Texas. There, Chip grew up taking care of animals and tending to the family farm. When it came time to go to college, he, like Joanna, attended Baylor University—but instead received a degree in Business and Marketing. Chip was excited to become an entrepreneur, and started his first business while he was a student, called Green and Gold Laundry Fold. From there he went on to launch a landscaping service, a fireworks stand, and also studied to get his real estate license.

Anything that’s important to us, or anything we want to do is going to require work. Anyone who thinks we got lucky is crazy.”-Chip Gaines

While most Baylor students quickly left Waco after graduation, but Chip fell in love with the city and could see its potential for real estate and business opportunities. It was a college town in-between Dallas and Austin, and there were plenty of cheap houses for sale. So after graduation, Chip took the money he had earned and purchased a house in cash—then renovated it, and rented it to Baylor students.

Chip’s plan was to continue buying and fixing up properties to create passive income, but that plan would take on a whole new dimension when he walked into a Firestone tire shop. Because behind the counter was Joanna. From the moment they met they had chemistry, but it was Chip’s reputation around town that sealed it for Joanna. Everyone seemed to know him. He would give a job to anyone who needed money, even at times when he didn’t have money himself.

So when they fell in love, it was more than the start of a relationship: with their mutual interest in the community, combined design and business sense, and shared backgrounds in entrepreneurship, it was the start of a partnership that would take on a life of its own.

 

 

ONE FLIP LEADS TO MORE

When Chip and Joanna got married, their first house together was only 400 square feet. They were newlyweds, but they were also completely broke, living paycheck to paycheck. Because the house was so tiny and dilapidated, Joanna had to figure out how to make it feel like a home. That feeling meant so much to Joanna that she dedicated herself to making the house as beautiful as possible — she gave it a total makeover.

But as soon as she was finished getting the house perfect, Chip had a new plan. He had purchased a new house, and rented their first house to a student at Baylor. And while Joanna knew that day would come, the thought of moving into the worst house in a new neighborhood had her in tears. Until her imagination and creativity kicked in. After all, if she had fixed up one house, she could do it again. And while it was never easy to leave behind houses she poured her love into, she and Chip continued to buy and flip houses as they moved, and with every new property, Joanna’s skills in interior design improved.

If I had planned my life, it never would have ended up like this. So maybe it’s kind of fun not to plan. Maybe it’s more fun just to see where life takes you.”-Joanna Gaines

In the beginning of their careers as house flippers, Joanna was a stay-at-home mom. But she was always an ambitious person. And as she did more and more home makeovers, she grew to love interior design. She remembered all the curated home decor boutiques she had visited when she lived in New York, and wished there was a similar business in Waco. Then it dawned on her that she could open it.

When family and friends heard about Joanna’s plans to open a store, everyone discouraged her from trying. But Chip was her cheerleader. He was used to taking risks in business, and since Joanna believed in all of his crazy ideas, he did the same for her. Regardless of whether their businesses failed or succeeded, they would still have each other. But with a partnership like theirs, it turned out there was no chance at all it was going to fail.

 

FATE ON THE SIDE OF MAGNOLIA

In 2003, Joanna found the perfect property for her shop. But the couple made so little money that the only mortgage she and Chip could qualify for was $45,000. As a result, the owner Maebelle, turned Joanna down for the spot saying she had received two significantly larger offers in the past. Joanna was disappointed, but instead of giving up she prayed for a miracle. And it would seem something like one happened. The next day, Maebelle called back to say that God spoke to her in a dream, saying that she should take the $45,000, and let Joanna open her store.

Even then, Joanna was still in debt and under an immense amount of stress. She needed to source the home decor items from antique auctions, thrift stores, and her own DIY projects. Between raising her kids and getting the store ready, it was non-stop work. She figured out that she needed to make $200 a day to break even, and prayed that she would make more. Again, things seem to have gone her way: as soon as the store opened, multiple luxury cars pulled into the parking lot full of rich housewives who had been eagerly waiting for this cute boutique to open. Joanna made $2,800 on her first day.

Don’t quit, and don’t give up. The reward is just around the corner.” -Joanna Gaines

From the hit opening on, the Magnolia store continued to thrive. After getting to know some of her regular customers over time, some loved Joanna’s style so much that they offered to pay her as an interior designer. This was something new for Joanna: an opportunity to design interiors with a much larger budget. And suddenly after years of just barely making ends meet, Chip and Joanna were finally starting to make consistent income. This was the beginning of the lucky break for Chip and Joanna, because when some of Joanna’s design work was featured on a home owner’s blog, it caught the attention of a producer from HGTV.

 

THE BOAT THAT LAUNCHED A SHOW

When HGTV first contacted Joanna, Chip thought that it was a scam. It was hard to believe that a famous TV network was interested in a couple from Waco. But sure enough, they started talking and before they knew it, a crew came out to film their renovation and design business. At first, Joanna was worried that their life wasn’t interesting enough to be a TV show. But Chip’s spontaneity proved otherwise.

Over the years, Chip had developed a habit of buying houses without letting Joanna know ahead of time. And a TV crew coming in seemed like the perfect time for the most unusual surprise of all. So while the cameras were rolling, Chip told Joanna the last thing she had expected to hear that day: that he had purchased a run-down houseboat to fix up.

Joanna’s was horrified when she saw the houseboat—and the cameras caught it all. The couple began to fight, but then suddenly Joanna’s imagination kicked in like it had back in their 400-square-foot house all those years before. She looked at the houseboat and began to envision how she could decorate it to make it beautiful. And in just a few minutes, she was completely calm and they came to an agreement on a plan for a renovation project. Chip and Joanna were so caught up in the moment, that they practically forgot that the cameras were rolling. And soon after, they were told that they had a deal for the TV series “Fixer Upper”.

Most people who got a TV deal would think about changing their lives—moving to LA, or taking it as a chance to do something new. But Chip and Joanna were committed to their community, and determined to invest in Waco, Texas. Once the TV series began, Chip and Joanna worked to rehab neighborhoods and open businesses in their local area. Joanna was able to purchase more commercial property, and expand her store into a new concept called Magnolia Market and Silos. This was much more than a boutique. It was a cafe, outdoor concert venue, entertainment space, and shopping experience. And when guests came to Waco to visit, you can guess where they stayed: at renovated properties that Chip and Joanna turned into vacation rentals.

 

REHABBING AN ENTIRE CITY

For years, Waco, Texas had a bad reputation—it was only known for the cult-centric massacre that happened there in the early 90s. But with Fixer Upper, and the new fame that Chip and Joanna Gaines brought to the city, the local economy took a turn for the better. And for the couple, this is no mistake. At every turn in their story, Chip and Joanna have tried to find ways to create employment opportunities for locals, and to make the community better. And thanks to them, Waco has now become a place known for beauty rather than tragedy. The town is now a tourist destination, and the Magnolia Market and Silos receives 35,000 visitors per week.

Go into it thinking...this influence could be used as a tool to better the community.” -Joanna Gaines

Even though running their Magnolia empire and refurbishing the reputation of the entire town would both seem like full-time jobs, Chip and Joanna Gaines are also raising their five children while they work. Both of them were raised in hardworking families, and are determined to help their kids understand how much work it takes to be successful. And even with all those responsibilities, Chip and Joanna also find time to keep the romance alive just like they always have. They still hold on to the tradition of making every Tuesday their date night.

Because no matter how much success Chip and Joanna Gaines have found, it is only possible because of how they have insisted it’s always on their terms. Terms of supporting each other through their crazy dreams; of helping others and their community; and of staying grounded and humble. Because no matter how many people try to imitate or compromise their way to success, Chip and Joanna know what we know at Selfmade: that it’s by following your own path that you truly find success. Often the world will sit up and notice. But even if it doesn’t, the feeling of living your vision without compromise is enough of a reward all on its own.