Three Degrees of Freedom: From Corporate Life to a Life of Freedom with Derek Clifford - Episode 93

Today's show is sponsored by Money Insights and their investment optimizer strategy. In my book, I share how I use the same strategy starting over a decade ago to invest my money in two places at one time. This strategy has been used by the wealthiest for generations for estate planning, minimizing taxes, preserving wealth and increasing stability for their investments. Now you can do the same thing. In addition, you can build a plan to build an emergency fund, pay for college, fund a business plan for retirement, and ultimately optimize your total financial picture. To find out more information, check us out at the banking link@nextlevelincome.com on today's show, we have Derek Clifford. Derek is a multifamily real estate investor who got his start while working a full time corporate job. He's also an author, vlogger and podcast host of of the Elevate youe Equity show. Derek published his first book, Part Time Real Estate Investing for Full time professionals in 2020, which has helped several people get started on the path of growing their passive income on the side while working a full time corporate job.

Welcome to the Next Level Income show where it's our goal to raise your income, investments and life to the next level with your host, Chris Larson. Get your free copy of his book@nextlevelincome.com book also, if you're an accredited investor, check out the Invest link to learn how to gain access to institutional quality real estate opportunities.

Derek, welcome to the show.

Chris, it's an honor to be here.

Yeah, well, it's been fun catching up here and I want you to tell the audience that about your background. But before we do, I was like, hey, you're coming. You're in California and you're homeless. Like, tell us this story.

Actually, Chris, I keep telling people that if I, if I tell I'm homeless, that that brings the wrong images to the brain. I like to say the word unhoused. I think that's a little bit better, isn't it?

Isn't this unfair if people want to reach financial independence? If you're homeless or unhoused, isn't that a lot easier? Isn't this like cheating?

I think it is. I agree with you.

So, so, okay, so you're not really homeless. You're. And you're not even unhoused. But tell so what you're. This is, I love this because I got two boys, they're in school. You know, there's, there's an option to do something like this. But you know, please tell us what you and your wife are up to these days from us.

Yeah, for sure. And I realize that my wife and I are blessed to position to be able to do what we're doing right now, but we basically hop from Airbnb to Airbnb. Back last year in May, we sold our house California Bay Area. And we use those capital gains to invest in real estate and use as a seed for us to build our businesses and hop from place to place. And it turns out that you can do a lot of living in the United States with a lot less than you would need to spend living in the California Bay Area. Including living in Airbnbs. Exactly right. So, you know, we. We spend anywhere between three weeks to five or six weeks in different Airbnbs across the country and just hop from place to place. And I think it's been able. It's been a huge blessing because we've been able to find out so much country that we would have never otherwise learned about until we had retired, you know, back when we're a little bit older, maybe 20 years down the line.

Yeah. Oh, that is so cool. You got it. You got to come visit us in Asheville. You can set up shop and. No, I was listening to the CEO of Airbnb, the founder of Airbnb. He was talking about how Airbnb has exploded. And this is a big trend where people with location independence are able or location freedom, or able to go and live in an Airbnb for periods of time. And I was like, wow, that's really cool.

Yeah, it's one of the things that I never knew I wanted to do. It was really. My wife kind of inspired me to think bigger like this, because, you know, Chris, we at Elevate Equity at my firm, we like to espouse between us and our teammates and everyone that is on or touches our brand, the idea of time freedom, location freedom, and financial freedom.

Love it. And so time freedom.

Location freedom, and then financial freedom and financial freedom.

Time, location, financial. Awesome.

Yes. And so by doing this, we're absolutely living this location freedom lifestyle, which is incredible. Right. And then time freedom is more about being able to choose what your schedule is every day. Right. More or less. And then financial freedom is obviously pretty much being able to do whatever it is that you want to do with your lifestyle and not having to worry about counting dollars for going out or doing these simple things just to go about your lifestyle. So those three things, we encourage everyone to actively work towards, and we give everyone practical tools to get there for each one of them. And for us, location Freedom. This was just a simple mindset shift that my wife was like, why not do this? And I was like, huh? Why not? So that's kind of how it worked.

Oh, that's. Yeah. That is awesome. So what were you doing up to this point, Derek? Cause, you know, one of the things I love about your story is, you know, we both. We both had W2 role for quite a while.

Yeah.

So tell us how you bridged the gap, you know, from W2 to this. This amazing location, freedom, lifestyle.

Yeah, no, thank you, Chris. I mean, I think we were headed down this path anyway. But Covid, I know that it was kind of like a big, big bane for a lot of people. And so my hearts go out to those lost family members and have had complications with it. But for us, it was probably the best thing that's ever happened to us. And I know that's weird to say, but it creates these conditions where in my full time job, which I had up until about August last year, the end of August, they allowed us to work remotely, so stayed within the state of California, just traveling from place to place, and then eventually started to realize, like, with our mind expanding and this freedom of location opening up, it's got me thinking about financial and time, and I couldn't get over it. So my coaches were like, I think time for you to escape the bonds. Right. And at the time, I was working as a project manager, and I had to have control over everything that was going on in our lives, putting how much money was coming in and how much money was going out. But my performance coaches, they encouraged me to think about all the times that I've been ever put under pressure, how I always seem to land on my feet and that I should lean into that. And so it was really scary for me to do it. So again, you'll notice a pattern here to all the success. This is where my wife steps in. She's always the pattern of my success. When I talked with her about the situation, about how I wanted more from life, and she's like, oh, my gosh, I can't believe it's taking you this long to realize this. You just need to quit your job. And I'm like, you're okay with us quitting the job? Because, like, I have no stable income coming in. And she's like, we always figure it out and what's the worst that could happen if we run out of money, you just go back to the job again. It's not really that big of a deal. And so that kind of made It a no brainer for me. So because we don't have any kids, we don't have any ties to any physical location, we felt this as an opportunity to be able to explore this abundant lifestyle and by living the abundant life. Chris, it's just amazing. What happens is you'll sense a difference in your community, education, your language, your energy and deals and money, they just started flowing to me and we closed four deals in the last six months ever since quitting my job. And we have two more that we're looking to get under contract here soon. So it's just really incredible how fear and limiting beliefs kind of hold us back. And once you get inspired by talking with your spouse or getting with your coaches, incredible things can happen.

I love that story and going through a similar process over not too dissimilar time period, I can sympathize with the experience. So I know a lot of people, some of my coaching clients, if you are listening today with Derek saying, we get locked into these patterns of behavior and these thought patterns and we don't really consider the alternative. One of the things that really changed my mind, there's a book, it's called My Plan to live to 156 by Dan Sullivan who's founded Strategic Coach. And I read the book and it makes sense if you read it and I'm not going to spoil it, but go get a copy or email me and I'll tell you how to get a copy. But when you expand your mind and you change your perspective and you say, wait a minute, if I could live longer, if I can do different things, or like your wife said, what's the worst thing that could happen? You just go back and get a job. Why not take this opportunity and do it then? Amazing doors open. And I think you're right, I felt the same. You know, as your energy shifts, people sense that and things, it's almost like people, people say like, oh Derek, you get it now, you're part of the club. It's just, it's amazing the way the universe reciprocates.

It's so, it's, it's, it's so much is that case, Chris. And you know, we realized that, that again making the deliberate decision to walk into a life of abundance instead of waiting, saying, oh, you know, I've got to keep working and saving money and doing all this, walking into that life when we're ready. Because I mean, we've been investing in real estate for about five, six years now and doing it along on the side and Doing it a very high level. Right. We're investing from California, in Indianapolis or out in the Midwest. And so we're buying properties almost once, two months. And we got our network built, we sought mentors, we put in the work every single day to make sure that we had that skill so that when the escape is made, you're not trying to learn a skill, you're just taking your skill and leveraging it to turn it into something tangible for a business.

Now, I think you made a huge point there, which is a lot of people have heard of or read the Secret. I love the Secret. You shift your mind, you visualize, you determine what you want. But part of what's missing from the Secret is something that Tony Robbins does a really good job of. He talks about take massive action. So once you have that vision in place, you have to do it. So I love how you just brought that up. So, Derek, if you would. A lot of people that listen, they're high income earners, they're working on their jobs day to day, and people ask me the same question, like, how did you do this? I'm like, Well, I work 16 hours a day, six days a week for a long time. But what are some of the things that you did along the way, Derek, to grow your real estate portfolio? And what are some of the things that you learn in shortcuts that you can share with the audience?

I think you know, from a very tactical point of view, I like to take that because it's something that our listeners can take away. Right. First, understanding why you want to do this is huge. I'm sure this is mentioned before when you ask this question to some of your other guests. But understanding what's important and understanding why you want to do this is going to help get you through the downs and the ups and help you come down to earth after the ups go back down again. Right. And I think that drawing from your spouse or drawing from your family's wisdom to talk about what it is that you want to do is going to be the driving force. So that's the first thing. So I highly recommend that you bring that to the table first because it will remind you when you're working so hard why you're doing it. That's the first thing.

Big why. Have a big why.

Absolutely. When you have a big why, the how gets legs. Right. The second thing is setting up a time block for you to dedicate yourself to your craft. So for me, when I was going into my W2, what I did was I beat traffic Going in, in the terrible Bay Area traffic, I would get into work at about 6:30 in the morning and then work would start at 8. And so I would give myself about an hour or so to just do what I need to do. On the real estate side, whether it was. It didn't have to be anything, Chris. It could have been. I'm just going there to say that I'm there and so don't feel pressure to be like, oh my gosh, what am I going to do next time? No, get, get your butt to the office early and you can use that time to plan out the rest of the week or to make phone calls or listen to podcasts or read books or network. And I highly recommend all of that to happen. Right. Because this is a very collaborative team sport. Whether you're doing this actively or passively and you want to get involved in the syndicator or you want your own single family homes, it takes knowledge. You have to kind of understand what it is you want and that has to start somewhere. So giving yourself those tools. And then the last thing that I suggest is mentorship. Once you find something that you really like, get yourself a mentor or find someone to work with who can help walk you through the nuances of the type of real estate investing you want. So just to recap, one is vision with your family, why you're doing it. Two, time yourself out a whole bunch of times so that you can figure out what it is that you want to do and how you want to approach it. It may not take long. And then three, get mentors or get part to help you execute your plan and your vision.

Absolutely. I love it. Vision, planning, accountability. It's things that we talk about every day here at Next Level Income. And you know, I heard, I heard, I'm trying to remember who said it, but they're like, if you want to go run on the treadmill, start by getting up and putting on your running shorts, your shoes and everything. And then you're sitting there and you're running shoes. And then just go stand on the treadmill and you can look at your phone. And they said at some point you're probably going to start walking on the treadmill because you're on it. You know, it's the, it's that initial inertia and momentum to make that happen. I love this. Yeah, you just gotta get moving. So if you're, if you're listening and you're like, ah, I need to do this. You gotta take the first step. That first step could be Getting up earlier, getting to the job sooner, blocking off that time, reading that book. Or it could be picking up the phone, reaching out, finding a mentor, a coach, somebody that can. They can help put that plan and help you get that vision together. I think that's amazing. Derek. One of the things that I think you and I have in common is we have amazing partners. My wife, the fact that she puts up with me and she's actually shares an office with me here, that tells you how amazing she is. If anybody knows me. But I'm not here to talk about my wife. I'm here to talk about what you call leveraging your spouse. Now, when I first read that, I was like, leveraging your spouse. I was like, is this one of the guys that his wife goes and earns hundreds of thousands of dollars and he, quote, unquote, retires and quits his job? I mean, tell me what you mean by leveraging your spouse, Derek.

I'll be honest there, Chris. I could probably improve my phrasing and choice of words, couldn't I?

I think it's good. I think, you know, I'm an engineer, though. Like, I think, like, levers make sense to me, you know?

Yeah. Yeah, no, no, me too. I guess what I meant by leveraging is not to the detriment of your. Of your spouse. That's not what I'm saying. I guess what it means is, like, you know, bringing together the two minds to help, like, find solutions that are at the box. Because, you know, Chris, I love this. I'm an engineer. That's where I got my undergrad degree. You're an engineer. So we both think along those lines. And the truth of the matter is, Chris, is that I just didn't know where my head was. Like, my wife could see right away that I was upset or going down the wrong path, and the seeing that wasn't something wasn't working. But I have trained myself to just keep hitting the head, hitting my head against the wall, to try a hole where my. My wife would just say, why don't you use a hammer? You know, why don't you just use a hammer to bust a hole through the wall? Right? And the. Is that my wife knows my limits. She understands what I need at a different. At an emotional level. And I think the main key here is blind spots. Your wives or your husbands or whoever, your spouses or your partners, they will help you identify what your blind spots are. And you can choose to outsource them or fill those holes with them themselves or your spouse or you can hire someone to take that spot for you, like a virtual assistant. And you'd be surprised the amount of mental energy that that frees up. And I want to say that it's kind of like this one off thing, but it's very compounded. Like it's one decision that after the other, and not only if it's. It's one specific situation that happens over and over again. It's actually your entire life situation that's compounding on itself. Right. And if you don't have your spouse or someone to show you or give you some awareness on some of these things that you're doing, that's keeping yourself held back. You're really kind of, you know, you're really holding yourself back and limiting your potential a lot.

No, that's huge. And I think it's so important to have a partner along the way. Is it Napoleon Hill that talks about that and think and Grow Rich? I think I remember him talking about that. Which is a phenomenal mindset book if you. If people out there haven't read it. Um, it's. It's funny. I was laughing because yesterday my older son was arguing with me and. And I said, ethan, you're banging your head against the wall. And he looked at me and he's like, it's like, what? And I said, do you know what that expression means? And I had to explain it to him. So I love that you're, you know, hey, why don't you just grab a hammer? I don't know if I want my son to grab a hammer when he's arguing, but it definitely made me laugh a little bit when I thought about that.

Yeah, yeah, it's. It's for sure. Again, I need to work on my analogies, Chris. This is not working out well for me right now, but I'm loving them.

I'm loving them. These are. These are really good. So, so one.

One thing I wanted to add to. To the conversation here and see if there's a similarity between us on this, is that my wife is very much the visionary. I'm an integrator. I'm a details person by training, by education, and just by nature. And so I love to look at things and put things together, dissect things, put it back together and do all that. And this is one of the things where my wife is like, you are wasting your time. You need to delegate that. Right. And these are the things that I was doing. I'm trying to build these systems and processes where I could go onto Fiverr. And so I encourage everyone out there on the podcast right now. I challenge you to go to Fiverr right now and find something to outsource, even if you don't think you can, because I will guarantee you that you.

Could find something on Fiverr.

Right? And so once I found that, like, my whole world towards delegation shifted. But, Chris, I gotta be honest with you, man. I would still be doing things myself if it wasn't for my wife noticing that I was getting stuck. And so she's there to. And this is just the roles we fell. Fallen into is that she's there to help, like, set the vision right and set where we should be going and what makes sense and what fits and what doesn't fit with our personalities. And so business. I have a business. I'm integrator in both, and she's visionary in both. And it's just an incredible way to work together and bond with your spouse.

Now, I think, again, you bring up. You bring up a great point, and I think this is applicable in business or relationships, and especially so if you are in business with someone you are in an intimate relationship with, especially if you're married. My wife and I went through a coaching program over 10 years ago, and we work with a coach, and he had us go through, like, a personality test, strengths test. And what he explained was, he said, you guys have a good fit. Most people that I work with that are partners, they either are very similar or they are complementary opposites. And it turns out that my wife and I are very much like yours, Derek. Although I'm more of the visionary of the strategic planner. She's more of the implementer, the details person. She's an architect. I joke. I said, my. My advisor in college pulled me aside. He's like, chris, he's like, you're not smart enough to be an engineer, and you're too funny, so you're gonna have to go find something else to do. So I went to sales. So I was like, all right, I guess I'll have to go. Go do something else. But I did fast. I did pass the pe, though.

Hey, congratulations, man. That's farther than. That's farther than me. I took the pe, so that's. That's awesome.

You can have mine because I've never used it. Nobody wants me to be an engineer, but. No, but I. Again, I think the big thing is, Derek, and you understand this. You know, engineers are taught to think a certain way. And I was just on another podcast. We were talking about, you know, the process of how to Kind of short circuit some of the issues that we have as humans. And I was telling how like I can't have ice cream in the house because I will just eat the entire pint of Ben and Jerry's. My wife says I have no self control, which I say I don't buy it at the store. That's a lot of self control.

Right. There you go.

A great book idea to Execution, which talks about how to optimize, how to automate, and then how to outsource. So again, to stack onto what you were saying. Derek, if you're listening and you're struggling with something that you know you shouldn't be doing, and when I was a sales manager, I called these like $10 tasks. Now, I think with inflation, it's 15 or $20 tasks. But if you're doing something and you're making $100,000 a year or more, if you could pay somebody $10 to $20 an hour to do that, you need to find a way to do that, figure out how to optimize it, figure out how you can systematize it and hand it off to somebody and then automate. Automate and then ultimately outsource it. I think that's. Oh, that's such a great, that's such a great tip.

It is incredible. And I think here's the tip that most people don't realize they can do. If you find someone that you can have as a virtual assistant or as in general, you don't even have to build the processes yourself, have them build the process for you. You expect, you take a result and you say, hey, this, but I expect to see. And then if it comes out great. I mean, obviously you have to understand that when you're working with people, there's a give and take and it's going to take some time for you to get the result that you want. But once you do, it's repeatable, it's scalable. Because if you have another person to hire. Right. That maybe this person moves on, maybe they're, they find another opportunity or they're not the right fit. Well, at least they've documented everything that they've done so that you can just pop in the next person to do that. And I think that that's a really big, big thing. And you know, one other thing I wanted to mention. I'm sorry, Chris, I know you wanted to say something there.

Oh, you're making my job easy today.

Yeah. Is that, is that another book I want to recommend on top of the one that you just Mentioned is called Atomic Habits by James Clear. Yeah, really and incredible book. Like, I wanted to mention this early on, but we moved on in the podcast. But it was, let's say that you want to build a habit to go to the gym, right? Well, the thing is you've got to wake up early, right? So why not get over that initial inertia by putting your gym clothes, having it folded, or having your gym bag right next to your door in your bedroom. So that way when you leave, all you gotta do is pick up. You're making it easy so you don't have to like go through the inertia of packing up your gym clothes the morning of not feeling good and then going to it. It's all about being very mindful and aware of what patterns hold you up and how to overcome them. And then stacking, putting things on top of each other so that, you know, for instance, we work out in the morning every day and that's a habit. And what we decided to do is put meditation on top of that. So instead of doing, trying to find a time to meditate, we just stack it right in the middle or right on top of the, the exercising right after that's done.

That's so good. Yeah, I used to do that when I was racing bicycles. Like, I get up, I put my cycling clothes on, and if I was sitting there drinking coffee, looking at Facebook, my wife would be like, what are you doing sitting around in your bike shorts? So I'd be like, I'm just going to get on the bike. I don't want her to chide me for doing this. But no. Yeah, James Clear, that's such a great book. I've used so many of his tips over the years for things. So you wrote a book and I want to talk about, did you use any of these tips that we've given out today? Any of these habits, any, anything that you use to get that done? Because I know I wrote a book. When I first started out to do it, it was very overwhelming. So if anybody's out there listening, thinking like, man, that sounds great, I have an idea for a book. What can you share with the audience on that? Derek?

Yeah, I would say for me, one of the things that I know myself well on is I'm very disciplined person. So that served me well that time. Blocking technique is what worked for me. So the audience might be surprised to know that I wrote a 180 page book in 30 days. And I did it myself. Didn't do ghost writing. I did everything on my Own and how I did that was I use what's called self publishing school. There's a company that Chandler Bolt set up and highly recommend that if you're going to do a self publishing route. But basically it was creating a mind map and then going from mind map to building an output for all the chapters of the book and then figuring out how much proportion each chapter gets right. So then you take that and you put it into a spreadsheet and you take your reward goal that you're going to get and break it up into 30 days and just bust out writing in 30 days. And for those aspiring writers that are there, you know that target be somewhere around 1,000 words per day if it's going to be a 30,000 word book. And if it's a thousand words a day, um, you basically just check your, your account every single day you get up and you have a set time that you work on this. It could be during your time block your one hour, right. For a month or two and you just sit there and write. Key is to write. Don't hit backspace ever. Don't do it because as soon as you hit backspace for one sentence, you're going to get writer's block. It doesn't matter if you're repetitive. It doesn't matter, um, if you keep hammering a point home that people already understand and they get, because your editor is going to take that out anyway and you're going to have to add stuff in the second draft. So the first draft is the biggest hurdle. And that's kind of my advice that I can give for that. But that's how we did it. We did it in 30 days. Yep.

Well, no, I think in that process can be applied to so many things. So if you're listening and you say, wow, where do I start on my journey towards financial independence? You start with a vision, then you work backwards from there and you figure out what you need to do, whether it's on a daily basis, a weekly basis, a monthly basis, quarterly, annually. And you put that in place. I think it can be applied to so many things.

Yes. And one thing I was going to add, I'm sorry, is that everyone has a book in them. Everyone does. It doesn't have to be 150 pages. It can be 30 pages, it can be 40 pages. And I would highly suggest that someone that does this because when you talk with people and you're trying to explain who you are, what you do, what you've done, if you're able to say that you're an author and you hand people your book at a job interview or at a networking event or something. That is next level, right? That is something that people don't think of. And it doesn't have to be complicated. You can sit down and write a book in two or three days if you're focused enough. Like on a flight to, you know, if you live in Miami and you're flying to Seattle, right. You can, you could write a book literally in seven hours if you have a clear enough vision and you know your content well enough. And by doing that, that is your business. Business cards are kind of gone these days. Like, people take business cards and then throw them out.

You don't even meet face to face hardly anymore. Shaking.

That's right.

Crazy.

That's right. But tell me someone who has thrown away a book. Doesn't happen, right? People, they hand the book off to others. They pass along. It's like an embodiment of you and your personality. And so I just highly encourage anyone to find something that they want to write about that they're an expert in and just do it. It doesn't have to be long and it has to be you. That's all.

It's amazing. You've. Man, this has been. This has been such an amazing episode. Cause we've gotten to talk about one of my favorite things, which is really mindset. But Derek, I want, I want to give you a chance now to talk a little bit more about your company, who you work with. The best way for audience to find out more and even learn how to work with you if they're interested.

Yeah. Thank you, Chris. Really brief here, but basically everyone can find me@elevateequity.org we have videos, podcasts, we've got the book, obviously, and we have a ton of educational materials. And also on Facebook, we've got a live mastermind that takes place every Wednesday where people come in and just ask questions about getting started either on the active or the passive side of real estate investing. And we've grown our portfolio exponentially over the last six months. And we're trying to document everything and be organic and as open as we can so that people who want to follow in our footsteps can do that. So just go to the website and you'll see everything there.

That sounds awesome. So what specific properties are you guys focused on?

Yeah, we're mostly focused on B and C class value add properties in Indianapolis and we also some stuff in Austin, in San Antonio as well. So we place some capital out there with some great. Yeah. With some great investor operator partners. But for the most part, we're focusing on those tertiary markets because I'll be honest with you, man, I think that those markets are going to explode just because there's so much value, you know, and the Internet is kind of flattening everything. People are able to work from anywhere and want more space, more amenities for the price. And so these tertiary markets just do really well. So that's what we like to do.

I love it. Derek Clifford, this has been a lot of fun. It's great to connect with you, and hopefully we see you here as you hop around the country and even the world on your Airbnb journey.

Yes. Thank you so much, Chris. Really appreciate it. This was a blast.

Hey, Chris, here again. I hope you found this episode valuable. Now, I have one more thing to gift you. We have a page for my coaching clients where you can get a free copy of my book as well as much more from previous guests on the show. Just check out nextlevelincome.com coaching to get a free copy of my book, audiobook and much more. I'll send you a copy of my book and cover all the shipping costs as a thank you for listening to the podcast. Also, please like share and take just 90 seconds to give us a rating on Apple Podcasts.