Prashant Kumar, CCIM - Founder, My Realty Gains

Derek Clifford is a successful single and multifamily real estate investor, who has successfully retired himself from his full-time job! Today he is a multifamily investor controlling 400+ apartment units with over $40M AUM. Derek is also the founder and CEO of Elevate Equity, a private real estate firm and also published his first book “Part-Time Real Estate Investing for Full-Time Professionals,” in 2020, aimed at helping corporate employees getting on the path of growing their passive income on the side while working and unlocking the three degrees of freedom (time, location, and financial).

What You’re Going to Learn

  • How would you define Freedom? What are the aspects of Freedom in Real Estate Investing?
  • How important it is to have a good mindset?
  • How would you develop your mindset? What are the ways to develop your mindset?
  • What are the ways in which W2 employees can invest? How much time do they need to Invest?

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Show Highlights

How would you define Freedom? What are the aspects of Freedom in Real Estate Investing?

How would you define Freedom? What are the aspects of Freedom in Real Estate Investing?

Prashant Kumar, CCIM – Let’s talk about your three freedoms – time, location, and financial. I know you have achieved financial freedom, and that led to time freedom, and that led to location freedom. I think that’s the order you would go about it?

Derek Clifford – I was working as a project manager for six years. When I left my job then covid enabled me to do some of the travelings. Though we had sold our property in May last year, I was still working a full-time job until September, still traveling around California because they enabled me to do that because of the covid. People already have this location freedom, but they’re already kind of tied because they’ve got kids or responsibilities in the locations that they go. I would encourage you to think about the fact that you could do your work from anywhere. If you are really on board and you want to make it happen, you have that first degree of freedom. You can travel anywhere you want to go. And once I had that first degree, I started craving like, wait a minute, now I can kind of like work on time freedom, because if you do time freedom and you get a situation arranged with your work situation and a lot of tech workers are here also at a point where you can work 20 hours a week or 10 hours a week or just take the whole week off or you have to work 80 hours a week, you have a little bit more flexibility in how to live your life on that second degree, which is time. So that helps out a lot.

If you have those two, you’re already almost all the way there. Financial unlocks everything, because then once you get to a point where all of your assets are paying for your bills, now you have full control over all aspects of how you live life and when you live it, and where you live it. It’s really interesting how we got the first degree of freedom, which is location. Then we realized that we could control our time if I escaped my W 2 and started working on my business full time, which was generating income.

But I had control when I was working when I wasn’t working. And then finally we got to a point with all the success we’ve gotten in our business working really hard when we were working and then taking time off when we were off, to get to the financial freedom. It didn’t hurt either Prashant, that when we were traveling it is so much cheaper to live in Portugal than it is in the California bay area. Right? Even when you’re enjoying going out into the city and having a great meal and all these great things. It’s just incredible the amount of living you can do when you’re not stuck in one location

Prashant Kumar, CCIM – Covid has brought location freedom from the IT sector point. There are people all over the world. Lots of people moved out from bigger cities like California, San Jose, San Francisco, or New York City and moved to semi-urban areas or rural areas and started living a cheaper life for sure. Number 2 time you know obviously, with remote work, as long as you can control your time if you have to work 8 hours. Granted that at least in the IT sector, information technology sector, if you’re working 8 hours in the office, you end up working ten to 12 hours at home. But there are ways you can kind of have the flexibility.

You can go out during the day, do something, go to the bank, take care of your things, and can still take care of the things at night for your W2 job so you have a little bit of freedom there. As you said, you keep on working harder and harder and there comes a time when you snap it. You have financial freedom, and that’s when the journey actually begins.

Derek Clifford – That’s right

How important it is to have a good mindset?

How important it is to have a good mindset?

Prashant Kumar, CCIM – What do you have to say? What is the role of mindset?

Derek Clifford – If you’re talking about mindset in terms of this, I imagine you mean the journey from being lost and going to a place where you’re financially free and choosing life on your terms. I think that mindset is the number one determinant of whether or not someone gets from that point A to point B. There are a lot of things that I’d like to talk about that also help make that happen. I call it the four C’s and the four C’s are Clarity, Consistency, Coaching, and Connections or Network. If you have those four things, the mindset underpins all four of them. If you don’t have the mindset, you don’t have the engine behind all four of those things to keep you going because you will have challenges, you will have difficulties, and you will have to make changes. Changes mean either sacrifices or it means needing to pull out some little extra energy when you didn’t think you had any in there. Those are things that you’re going to have to do to get to where you want to go. And that all takes a context of mindset. I’m a huge fan of always reading books. Every once a quarter or so, I’ll read some of these impressive books that I’ll keep reading over and over again, like Napoleon Hills, Think and Grow Rich, and The Gap in the Gain. The one thing a lot of these classic books help me in keep going. And so it’s really important to fine-tune your mind. Just like people fine-tune their body like an athlete, a superior athlete needs to tune their body. You as an investor and as someone who’s on the journey to financial freedom, need to tune your mind. Keep it up so that when you’re ready to go, all engines are firing at all times and you’re maximizing your chances of success.

Prashant Kumar, CCIM – Well, I was just totally impressed when you have talked about the 4 C’s, Clarity, Consistency, Connections, and Coaching.

How would you to develop your mindset? What are the ways to develop your mindset?

How would you to develop your mindset? What are the ways to develop your mindset?

Prashant Kumar, CCIM – What would you recommend to our listeners to do to develop their mindset?

Derek Clifford – I’ve never thought of it in this way before because no one’s posed that question of what comes behind it. But I think in terms of mindset it is to dedicate yourself. I think the education piece is really important and leaning onto one of those four C’s with the mindset in mind. If you’re going to do mindset, maybe get a community like a mastermind community where you can focus on the mindset with someone. Pay for a mastermind group, pay for a mentor, pay for a coach to help you with your mindset, or pay yourself by listening to podcasts consistently every single day or get clear on what you want to listen to and then just seek them out with clarity. I think you just have to have the education and the exposure to all of this through podcasting, and you just got to pick which C you’re going to have that expression come out in and focus on the mindset and it does take some time. Just like in meditation, be very patient with yourself, because the more you try to rush this and the more you try to force it, the more inauthentic it’s going to be, and the harder it’s going to be to actually make this a lasting change. I think that the books that we mentioned are very valuable resources, tons of podcasts are out there. But the books that really resonate with me are Outwitting the Devil by Napoleon Hill, Think and Grow Rich is classic, and The Richest Man in Babylon, all of these books are such a great help to tackle it. But tactically, you want to pick a C that you’re the strongest and most inclined toward and then just start tackling it in a mindset sort of way.

Prashant Kumar, CCIM – I love this conversation.

What are the ways in which W2 employees can invest? How much time do they need to Invest?

What are the ways in which W2 employees can invest? How much time do they need to Invest?

Prashant Kumar, CCIM – How can a W2 employee invest? I know you’re talking about, yes, you can get the financial freedom, but just spend a couple of minutes on how you are helping W2 employees and how much time do they need?

Derek Clifford – Yeah, I think this is a great question. And to be brief, there are a couple of routes, you can go down, right? There’s always the active route, which is if you want to burst, you can find markets and build a team yourself. That’s the active route. And if you’re that type of person who is okay with the risk and reward. For example – you have a high risk, high reward tolerance and you don’t mind getting your fingers dirty and your family is on board with it and you have all of the checkboxes checked out, then I highly recommend that you do start with the active one because then you’ll be a better passive investor. 

It’s kind of like this long-term investment. It’s a lot of energy up front. You’ll make a lot of good investment moves and everything. But for the most people who don’t have the time, I think the passive investing through apartment syndication or self-storage syndication after doing some learning and studying and networking with people, again, the four C’s come up and what you want to do and how you want to approach your investing strategy, you have to talk a little bit and start to get what matches you and what you’re trying to achieve. And if it’s passive income, then apartment syndications are great. Working with people that you trust. 

You have those two routes, I can’t recommend one or the other because it depends on the person but for most people, it’s the passive route in picking great people who know what they’re talking about and letting them do all the work. Like giving them the money to work with and then enjoying all the returns and having a great relationship with the operator, you’re building up to something greater than just an investment with the operator that you’re working with.

Prashant Kumar, CCIM – Awesome.