How Derrick Deese Built a 40 Unit Portfolio To Spend More Time With Family

In this Investor Stories episode, co-founder of West Irving Capital and Stessa power-user, Derrick Deese shares his investment journey. From strategy, operations, and portfolio growth, Derrick shares a wealth of information for investors. We also cover how Derrick uses Stessa for asset management, to simplify his process for procuring lenders, completing taxes and keep a finger on the pulse of his portfolio performance.  WestIrvingCapital.com --- Transcript Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Michael: Hey, everybody, welcome to another episode of The Remote Real Estate Investor. I'm Michael Albaum. And today with us, we have a very special guest, Derrick Deese out of the Pacific Northwest. He's an investor that started small on Rootstock and is now up to 40 plus units with his partner, we're going to talk to him about how he scaled, what tips he has for newer investors and what programs he uses to manage a portfolio that size. So let's get into it.   Awesome, Derrick. Well, thanks so much for taking the time to hang out with us today. Really appreciate it, man.   Derrick: Thanks, Michael. Appreciate it. And happy to be here. And thanks for inviting me and look forward to chatting.   Michael: Yeah, absolutely. So I want to hear about your background. But before we do, I'm curious to know, what was like your worst day ever since becoming a real estate investor?   Derrick: Oh, well, I will, I will let you now. So the worst day I think was actually someone called and said that there was poop and I’ll use poop versus the other word coming out of your toilet. It was about 11:30. At night, I actually had just had my second child, my daughter, Evelyn and I was holding her about 11:30 I get a call saying that there's poop come out of toilet. What do we do? And so I had to deal with that. And it was just one of those things, we sort of have to sort of say s.h.i.t happens. And it's sort of one of those forescout moments.   But right that that was pretty, that was pretty funny at the time, I'd look back, but it's sort of one of the things where like, you know, you sort of deal with the good and bad with it. But that was probably one of the worst areas. And really, you know, we had to end up cleaning a pipe inside one of the buildings and following the plumbing stack was off or something. But it comes with territory. So   Michael: It comes it comes with the business. When they said what do we do? Did you tell them like, well put the poop back in the toilet, that's belongs, it's kind of a no brainer.   Derrick: Basically, I said, you know, just get a plunger and just call the day. I can’t come out there. You know, figure it out. Just put it back in there. It's probably your poop anyway. So Michael: Yea better than someone else's poop.   Derrick: Exactly. So yeah, yeah, but that was probably the worst. But then in terms of and then in terms of this background, right. I mean, I, I can give you just a quick background for myself in terms of sort of where I how I got to where I am.   So I actually started off. I've had a career in a variety of different different functional areas. I started off after college, in investment banking, and did that for several years. And I actually covered real estate investment trusts when I was doing that, that's when I first started to learn about just real estate in general different asset classes across real estate and understanding how the business works there.   And then from you know, after banking, went to grad school, came out, I did strategy for a little bit. And now I actually work in the tech industry, and really the sales and business development function. And I've been doing that for the past seven years. And I really started getting into real estate, honestly, three years ago, and it was what the birth the birth of my first child a room. And I sort of said, You know, I got to figure out a way to diversify a little bit, but also just figure out a way to own my own time and spend some more time with my kids because I realized that I wasn't spending lot of time with him because he wakes up, I want him to work, I come back from work he was sleeping.   So that's really the the impetus behind me starting to invest was was really family related. And then as I've continued, you know, it sort of has expanded into writing different things which I can get into. But that's really why I started investing in the first place really, for my son, and now my daughter as as as well, and also my wife as well just disappear. We'll have more time to own ourselves.   Michael: Yeah, absolutely. So I'm curious what I mean, if it was the birth of your first child, that would truly was the wake up call. Because you were involved, we can say in the space and you knew about it. But why didn't you feel like it was for you? or Why didn't you take the time to invest back then? wasn't just Oh, it's for somebody else? I don't need to do that. Or just curious what your where the where your mind was at back then?   Derrick: Yeah, honestly, I think that that was one of the things where it's a it seemed almost unattainable. When I first started thinking about it. And again, working in banking, I learned about investing in general. So I had invested in the public markets and sort of was very comfortable there. It was very accessible. You could just go to, you know, fidelity and just buy and sell stocks. It was easy. And I and I knew it. And the people with whom I worked on a real estate side, you know, when I when I covered them, you know, they were all they owned 1000s of units and had tons of space.   And so I just it just wasn't clear to me that you could start off buying a single family or duplex and that wasn't something that I just realized. But then as I started doing more research into sort of Ever friends and people, I sort of realized that you have to start somewhere. And taking your first step is important. And you're not going to start off buying, you know, a 1000s for, you know, 1000 units ready to start off with just one.   And so really, it was just sort of a, I guess, a mis misalignment in my mind of what was like feasible to start versus what versus what I have seen that that was the biggest barrier for me. And once I sort of overcame that barrier, it just became much more easier.   Michael: Awesome. And so what was it that allowed you to actually take that leap to go from zero to one to make that first purchase? And I'm curious to know, if you remember, any, were you just scared out of your mind? Or would you think we confident because you'd seen it? And you you'd seen but it was possible, it was possible? Talk us through that? Yeah. So it's kind of funny.   Derrick: So it's kind of serendipitous that, you know, both Stessa and Roofstock are now one of the same because my first purchase was actually the Roofstock.   Michael: Okay, yeah.   Derrick: And, and I, I was looking at, I said, I don't, I said, I, I knew how the process of buying homes, I'd done it before my primary residence, I did not know, for investment home. So it was kind of daunting to figure out how to find an agent and find a property manager and all this stuff over time. And I ended up doing it. But when I first started, it was just daunting. So I, I literally looked up, like how to buy properties online, I googled it. And, you know, Roofstock came up, and then also, another company came up, I happen to start browsing through stock, love the UI, found a property in Ohio, and wants you to process the Roofstock. And literally, I bought it and I you know, you sort of expect like, you know, some Gong in the sky to like, you know, well, yeah, I'm just like, Okay, done. Like, here's your property. And I said, Okay, that that was it. Right. And after that, it just you started to just start moving forward. But my first property was actually bought the Roofstock. So   Michael: Oh, that's awesome. That's awesome. It was funny. I was chatting with another member, who's who's from rootstock Academy. And I asked him, he closed on this property. And I said, so what did you think? And he goes, honestly, Michael, it was so anticlimactic. And I said, it's because you did all the legwork up front. It should be anticlimactic. It should be boring. Investing should be boring a lot of the time. So I love that. That's   Derrick: Exactly, Exactly.   Michael: So So you got that single family home? Was that a single family? Yes. Okay, so that was your first single family, your your first investment property single family out in Ohio. Talk to us a little bit about what your portfolio looks like today.   Derrick: Yeah, so the portfolio has grown. Over the past three years, now it's close to 40, or somebody units, I think, mostly in Ohio. And I primarily do my investing through a business partnership really is called West Irving Capital Partners, you can go to the website and check it out. It's just westirvingcapital.com. And it's really myself and two other partners who primarily do a mix of call it two to four units, and also some five plus units. So we have around 40 split up between duplexes and a couple of actual, you know, public apartment buildings in the world, but they're under 10 units. And so that's what a portfolio looks like. Now.   You know, we primarily invest in Ohio, just because, you know, we like the market, we think there's a lot of upside in that particular area. And again, our whole strategy is sort of focused on finding properties that we think are undervalued or mismanaged. We've we've seen that there is a lack of supply of housing that is, you know, high quality and also decently priced. That's where our niches, we focus on rents that are around 800 to $1200. We put in some capital expenses, some some ESM, some capex upfront. And that's what we do. And we've been doing that for the past three years.   Michael: I love that strategy. And so I want to come back to this strategy as a whole. But you mentioned targeting properties that are mismanaged. And I want to hear a little bit more about that from because I think a lot of people when they're looking for investment properties, if they see something that appears mismanage they run the other way. But what you're saying is they're running towards it. So what what do you mean by mismanagement? And what, at the risk of giving away the secret sauce? What kind of risk management things are you looking for?   Derrick: Sure, no, I try to give as much information, Michael, just because, you know, the market is so vast, everyone can win. You know, it's not like I'm, you know, I have the only manufacturer of widgets on the country, right, everybody can buy real estate, so I will give as much as I can.   It's sort of funny, as I look at listings, or even talk of talking to people on the ground, I think that I've realized that you can that when you look at the marketing of a property listing, I sort of tend to take with a grain of salt because it's like oh, like you know, some updates have been made to me that means nothing has been updated. So the bare minimum right now like you know, it says like, you know, newer water heater or something Um, like that probably means it's like 10 years old, right?   So it's like any things that I've seen over time, I sort of said look like people don't put in the capital and it is capital intensive, I get that. But people haven't put in the capital that's needed to sort of keep them up to date. And you can sort of see it through MLS listings, or even talking to people who are just around the neighborhoods and seeing houses, right. So some properties that we bought off market, for example, sort of fit the criteria, but it was talking to people and sort of seeing what the condition of the properties were in.   And, you know, most of the times, Michael, there's, I say, mismanaged, and there's mismanagement where it's like, the roofs falling in, or it's like, the, the house is just a little bit dated, and needs a couple of, you know, cosmetic updates, and some mechanicals, we sort of go towards that, you know, the ladder, like we don't want the roof caving in. But it's like, Look, if we need to replace a couple mechanicals, if we need to update some of the fixtures, and they could let you know, more more modern, we're going to do that because our time horizon is, you know, extremely long term. And we don't have any intention on selling anything. And so for us, putting the capital in upfront to start is, you know, an upfront expense, but ultimately, it will pay off down the long run for us.   And that's what we focus on. And so that's what we mean by mismanage is like deferred maintenance. People who, who don't really want to be a, you know, a property owner and want to sort of get out. You know, and obviously, there's there's things that there's other things that go into that whether it is, you know, not wanting to deal with, you know, poopy toilets not wanting to do a lot of things. That's we look for, and again, like, it's, it's worked for us. And that's what we continue to do.   Michael: Yeah. That's great. And so are you utilizing property management? Or are you self managing? So I know you got the empty toilet call? So is that talked about how you're structuring that?   Derrick: Yeah, so it's so it's so it is a mix. So so so the vast majority of the portfolio is through West Irving Capital Partners, but I do have some that I manage myself, and then I have through the partnership, so that would be that was one that I own myself. So that's, that's, that's why there, but I guess we do property management, based in Ohio, great to work with, they do all the leasing the rent collection, things of that nature. And this is sort of funny, like, this is one thing that I didn't know, as an initial, you know, investor, you hear property management, eager asset management, I thought that they were the same thing. They're not I realized, finally, I, you know, I was today years old when I realized that right?   You know, like property management, you know, rent collection, marketing, the property insurance, that it's sort of, like up to standards, great. Asset Management is sort of like, okay, what's the property look like? What are the aesthetics? What, how do I make it modern? How do I position this, you know, as within a portfolio, so that's sort of another piece of that we also do, and ensure that our properties, again, are in the highest and best quality shape, we can make them. So that way, our property manager can make their job easier, right, rent them easily, you know, get the top of the line rents, and get high quality tenants.   Michael: Yeah. Awesome. So I know. And we're kind of gonna shift gears here, since you brought up into asset management, talk to us a little bit about how you do manage your assets.   Derrick: We, we want our assets to be in the best shape that we can have them want to make sure that they're updated to the best quality that that they can be. And we tried to position ourselves as basically like the best landlords, if you will, in the market, in which we operate. And so for us, that means, you know, we could go towards, you know, basic basic fixtures, or we can go sort of like a little bit to higher up to make sure that they're sort of like, you know, nice and are going to last so that's, that's one thing that we choose to do.   Yeah, we can have many houses have sort of old, sort of like aluminum windows, like we try to get vinyl to make sure that, you know, we can maintain, you know, heat, moisture, etc. And it'll also like reduce utility bills down down down the line, we also ensure, you know, we want to focus on the actual property for the tenants, and, you know, the uses of that property is something that we're providing, but anything outside of that, whether it's utilities, water, etc, you know, we believe, you know, should be borne by the tenants are using that. So, we try to submitter all of our properties, such that, you know, the actual utility payments are coming from the tenant.   And again, when I say sort of like, mismanaged assets, right, many properly bought has not been submitted, and the prior owner was paying all the water and water bills is can can get expensive. I have, I have no bearing on water usage, but I can absolutely dictate what the property looks like. So that's sort of our strategy in terms of, from utility standpoint, from from from the asset as well.   And that's what we're really focused on, we're really focused on, on on, on ensuring that it's high quality, and then in terms of how we position our portfolio, you know, we want to make sure that that our assets are, are smartly leveraged, right. So we don't want to over leverage in the market, we try to make sure that we're around 65 to 70% LTV at purchase, we think that we can add we can then force appreciation to some updates that we talked about. So that way our LTV is Can, you know drop a little bit a little bit more such that we can then look to refinance over call a two, three year period and take a capital and then allocated somewhere else?   So that's sort of our approach to asset management. Yeah.   Michael: Oh my gosh. I love that, Derek. And for those of you listening to the episode, not checking us out on YouTube, when Derek talking about submetering, I got this ear to ear grin. And part of the reason I love being a co host on this show is that it's so self serving, and we get to ask our guests all kinds of interesting questions. A lot of them come from our own brain. So I'm very curious, because I have several buildings actually, that I've been looking to sub meter. They're they're smaller multi families, you know, in that five unit range, and I just haven't found an economical company or resource to do that with but it sounds like you have.   Derrick: Yeah, I mean, it really depends on it really depends on what like market you're in. So So may I ask you a question? Like, you know, what, what markets? Are you in Michael?   Michael: So I'm in Cincinnati, and Northern Kentucky.   Derrick: Okay, so those are my two main markets. So, okay, so it's a close, close, close ish. area, and I've been looking for something for ad Cincinnati as well. So So really, within within the area, again, like, there has been, um, spectra energy, which is one, and also, you know, Guardian, Guardian Water and Power has been our main provider, but they, I think that they've been shifting towards less, sort of, like, quote, unquote, smaller units. But I think that if you have five plus units, that actually would be a good one. I think that they're charging 20 bucks per per unit, to on an ongoing on an ongoing basis.   But then there's this the the setup fees, are the capital expense, right, and then it's the cost of the actual submeter, the cost of the installation, etc. That's where it gets a little pricey. But again, I think about it as an upfront investment, it's gonna pay off down the road, because the submetering will ultimately reduce your utility bills on the road.   Michael: Yeah, totally.   Derrick: So I would check out either Yeah, you know, either guardian and or spectrum energy. Especially since they may actually be available in either Cincinnati or Northern Kentucky. Again, I'm not sure if they serve those those markets. But since in Ohio, it's worth a shot.   Michael: Totally. And I'm just writing that down. Now. This is awesome. So for those of you that might not be familiar with, with Derek and I are talking about. So submetering is basically when you have a property that has contains multiple units, so that can make you flesh out like squat, any number of units, there's a different there are several different ways to meter, the energy usage of that property of the utility. So water meter, electricity and gas, if it has it. So if it's something is called master meter, you're going to have one single meter coming into the building that feeds all of the units. And in that instance, it's really difficult to say, Okay, well unit one use this much energy unit to use this much. So they send out bills accordingly. So that's an instance where the landlord typically pays all of the utilities, because there's no way to measure how much is being used by each individual unit, versus installing some metering like what Derrick is talking about is every unit will actually then go get its own separate utility meter installed.   So we can tell how much do you how much water or electricity or gas unit one use, and send them in appropriate bill, and so on, and so forth. So this is an instance I've got a five unit building, it's master metered. The water bill can fluctuate from like 100 bucks a month to like 1000 bucks a month. And we charge a flat bill back for the tenants. And so every month, I lose that on the months where the water bill is really big, I really lose. And that folks are incentivized to tell you if their toilets are leaking or their showers that he because they don't care. They're not paying the bill. So this is a really, really, really great strategy for folks that have multiple units in the same building that have a master meter in place. I love that man.   Derrick: That's a great summary. That's a great summary.   Michael: Awesome. So talk to us about some of the software that you use to help manage your 40 plus units. I mean, I know that you're you're a Stessa user, so I'm curious to get your thoughts on on the program.   Derrick: Yeah, Stessa has been pretty tremendous for us. I mean, honestly, we we do all of our at westerbeke. We do all of our accounting, tax preparation, analysis for the properties, all this. So it's been pretty instrumental, honestly, in managing our business. You know, we're outside investors. And so you know, we're not on the ground. So being able to look at the data, there's data to be able to understand what's happening at a portfolio level, but also at a unit level is great. That's our main source, right? I mean, so so we link all of our accounts. So we see all the rents that come in, we see all the expenses that come out, you know, we're able to track our ltds we're able to track our, you know, stress test scenarios, depending on what happens. That's great for COVID obviously, right, like there's a lot of stress in the market overall.   We use it to look at our overall balance sheet to see sort of where we stand. We use it to have a quick download to get information to lenders who need it when we're looking for additional financing. So it's it's it's, it's great. I mean, it's it is much tremendous tool. We've been using it since we first started and anybody who does not have you know, a system To manage your properties, I highly recommend it. Because it's been great for us, I probably would categorize myself as a power user. I mean, I'm probably in stessa. At least, if not once a day, once every other day, to met to manage it, but truly a tremendous tool and any and a powerful data visualization tool as well just as sort of see trends and be able to address things for the properties in the future.   Michael: Love it. And I'm sure everybody listening is gonna be very curious. Derrick, how much did we pay you for this demo? PSA?   Derrick: Negative $1? Yeah, no, I mean, it's I mean, there's Yeah, there's, it just so happens that this, you know, this podcast is on this. So but I've been using Stesa for the past three years. And it's been pretty incredible. And there's more features that come out all the time. With any product, right, there's obviously obviously things that can can be addressed and things that will come down the pipeline, but it's been great. And again, like literally anything that you need for your properties, whether it's tax preparation, understanding how your assets are performing, looking at the income statement, looking at cash flow, looking at balance sheet, looking at ledger being like anything, it's all there. So it's kind of like, why why you something.   Michael: Why go anywhere else? No, that's great. That's great. That's just me. What would you say your one fit your favorite feature is?   Derrick: I would probably say, I'll, I'll give, I'll give two. So what I what I will say is a dashboard, it's like really cool to see the visualization, that like the opening dashboard is to showcase like this snapshot, what's happened to properties where they stand, what's your cash flow estimates look like? etc, that's probably the one. The second I actually think, which I think is pretty cool. And this is probably a nerdy one is just the rent roll, because you can just download it and sort of see like, it's sort of like a, like a snapshot of your properties. And you can just send it to a lender to say, like, Look, here's our portfolio. Here's our LTV. Here's our estimated cash flow across properties. It has, you know, taxes, insurance, and they're etc. I think that was a pretty powerful one. Because like, we've used it so often, just to say like, is every lender asked same thing? What's your rent roll? Where's your income statement? What's your trailing 12 months? Give me I mean, so literally, you know, there's so many times I just feel like I'm sitting on our computer doing this on stuff like this, like downloading. Like, okay, rent roll, okay, here. So, the rent roll one, I think is a good one to take as I use it so often.   Michael: Yeah, it's such a good point, too, that all lenders, almost every single lender is gonna ask for the same stuff. So if you're using your own program, you know, have a folder of using Stessa. It's all kind of contained in one place. So I'm curious to get your thoughts too, because I know, I've heard that one of the qualms about is, oh, I gotta take time and set this all up and input all the information, all that kind of stuff. From your perspective, now that you've grown your portfolio? And I think you know the answer, but I have to ask it anyhow. Was it worth it? Was the time set up on the front end worth it?   Derrick: Absolutely. It's no different than capital expense for your property. The same thing, you just have these set up once and then after that just pays off. So like, thinking about it is like putting in a new HVAC system. It's like, Oh, my God, I have to buy a new furnace. It's like, well, you got to buy it. And once you buy it, you under bought, you don't have to pay for another one for like, 20 years. It's the same thing. You just do it once it takes so long, it takes like an hour. It's not like it takes 10 days. It's like it takes an hour to like, sign up your account and then put in your you know, your stuff. It's like an hour, so it's not totally worth it. I would do it again in a second. Take an hour. Yeah.   Michael: Awesome. Awesome. That's great stuff, man. So yeah, I want to wind back the clock a little bit. And have you talked to some of our newer investors. So when you after you bought that first property, what allowed you to go step two, and three and four, and really snowball into this massive portfolio that unit partners have been able to accumulate?   Derrick: Yeah, I mean, I really think that that part of it is just taking action. I mean, taking action is such a huge thing that I would say to anybody who's getting into it is that it's so easy to overanalyze, and to create blockers for yourself to say, well, this doesn't fit my numbers, like your first deal is never going to be the best deal. Let's be honest, it's gonna be okay.   Michael: Whhhat?   Derrick: Yeah exactly. Oh my god, it's not a homerun. Maybe you get maybe not even a single maybe you like bunt, and then like they pay you out at first. It's not gonna be the greatest, right? So set expectations, right? But taking action is the biggest thing, right? You have to take action. I think you have to make a conscious choice to say, look, I want to be I want to invest in real estate, I want to be a real estate investor. You have to start somewhere. And I think that getting something under your belt, learning from it, and then applying that to the next one, I think is what I would recommend. That's what I've done. I started off with Roofstock right, they sort of it sort of did everything for me it sort of got the property manager it got the lender, it sort of set it up.   So I said okay, like, they're, they're doing this so I can do it too. And again, it wasn't time investment for myself to do it upfront, right? For myself, my partners that West Irving, right, but now we have agents. We have property managers, we lenders, it's upfront investment. But it was the action that first started. So to me the action is really the biggest thing and being able to get comfortable with being uncomfortable, because it will never not be uncomfortable buying something that you may not necessarily see. That cost a lot of money. It's not it's not comfortable, but like you have to take action and get comfortable being uncomfortable as a as a baseline for stuff that sort of, I would say, is a very, very big baseline.   Michael: That's great. And I'm curious to know what some of your big takeaways were from that very first deal.   Derrick: Again, your first deal is not going to be on running. It's just not that's the takeaway. Yeah, the property and I still track it. And that's, that's what's still on there. So I still see it. But I'd that property had a tenant that didn't pay for seven months. I think at one point time, I had you know, then it then had to do a pretty extensive rehab, but it was cosmetic rehab, that was a decent amount of money. Yeah, now tend to now it's tenanted again.   But again, you never expect that you sort of see like, oh, if you buy property, and then everything is rosy, it's like no, it takes years to reposition an asset. And there's always lumps in terms of like, you know, using a spreadsheet to analyze properties, I've kind of I'm like, I'm a finance guy. So I understand why the like, the spreadsheets are never going to tell you the truth. You can make it say whatever you want to say, oh, cash 10% cash on cash return and like, my, that's not gonna happen. But someone may not pay rent, you have to replace a furnace, you have to replace a roof, you have to get a city ordinance. I mean, it's all kinds of stuff.   So it's, you have to just take a leap a little bit, the comfort with risk. And take a step right. So again, not gonna be a home run.   And then the second thing, I think, is to sort of like expect the unexpected, right? I think it's setting expectations. Were your first property, you just don't know what you don't know. But you should expect like, hey, at any point in time, right, I may, I may have some expense on are expecting something may break, a window may break, a tenant could leave. So having cash buffer is sort of like the metapoint because there's always something that may happen, and it usually does. So be prepared for that. Right? It's kind of no different than some of the conversations of people having expenses saved up for themselves. from a personal standpoint.   Same thing for reserves, because inevitably, something will happen. And you do not want to be caught off guard when it does, because it can spiral very quickly.   Michael: That's such a great point. And yeah, I've never heard anyone make that connection that bridge between Well, hey, you have an emergency reserve for your personal life. So why wouldn't you have one for your rental property? That just makes so much sense to me.   So, so what I'm just curious to get your personal thoughts. If when you look at a turnkey provider, and they say, Oh, the property is brand new, they have $0 for capex and $0 for repair and maintenance and their pro forma, what are your first thoughts?   Derrick: I take with a grain of salt. I say even brand new properties have issues. I mean, especially new bills today, I've had people who bought new who bought new bills for their primary. And this The stairs are thinking that things things go wrong. And again, like this is no particular homebuilder. I'm not saying this, but like, in today's environment, home go up very quickly, the materials are iffy at best. And it's kind of quick for reason is I will say so I would say I'd still save because realistically, something can happen even in new builds, especially when you know when something's new newly constructed, you know, flooring is shifting around because it's expanding, like, you know, like this thing's on your walls that could happen like the baseboards could turn yellow because they didn't paint they forgot to paint.   I mean, just all kinds of stuff. So I just say I'll add 5% for halfbacks and 10% for maintenance this to start because something's gonna happen. Yeah, even a new build. It doesn't matter. Even if a new build.   Michael: IF it is not today it'll probably be tomorrow.   Derrick: Not today, tomorrow. So I say, turn turnkey, is is is is I'll say turnkey. I'll call it like 180 degree turnkey now 360 because something will happen.   Michael: That's great. That's awesome. All right. And so I'm curious to know, Derrick, for all the new investors out there, especially folks that are part of our Roofock Academy are interested in joining the restock Academy or who are in their education phase, let's call it How would you articulate to them or what would you say to them in how do you know when you've had enough information? How do you know when you're ready to take that leap? Because, like any of us, I'm sure we've also come to analysis paralysis. I need to read one more book. I need to take it to one more seminar one more podcast before I'm ready. How do you how do you know and then how did you know?   Derrick: What I would say is I would make I would make an analogy for those who have significant others, boyfriends, girlfriends wives. It's like how do you know when you're ready? To get married, like, you don't really know, you kind of just kind of have a feeling. And you're like, there's gonna be some lumps. But you kind of have, it's kind of in your gut, right? I think intuition is a very powerful tool that we as humans have, that we sometimes go against.   Intuitively, you know, when that person is right for you, in two, I would make an analogy, like, intuitively you're like, Okay, I'm probably 80% of the way there, I've read this book, I've taken the Roofstock Academy, I've talked to people, I've got all my stuff and in process, the other 20%, the incremental value of that is pretty minimal. I would say, again, once you have 80% of the way there, you know, you want to be an investor, you've taken that step, you've gone through these things like Roofstock Academy, etc. You've gotten comfortable with understanding how the numbers work, right? You won't actually really learn to do it, but getting comfortable with understanding how things work, then taking the leap, because ultimately, otherwise, getting from 80 to 100. It's just gonna take forever, and at that point, you might as well just say, I'm just gonna stop.   That's what I would say, right? Like you, you take that leap from, you know, going from, you know, single on taxes to married filing jointly, like you don't really like, no, you're just like this person, is it? There's going to be some bumps, but this is it, I will make that analogy. It's no different than property investing because you kind of like you kind of there and you're like, wishy washy when we read that wishy washy point of like, I need this disc go. Because if you need that other thing, it's gonna keep prolonging it.   Michael: Ah, dude, I love that. I mean, your isms. Two for two on the episode, you're batting 1000 a day. That's so good. That is so good. Oh, I love it. I love it. I love it.   Derrick: Thanks, man. Thanks. I try to make I try to make try to make analogies things. Because otherwise, I mean, it's easier to comprehend those things personally for me. And people did the same thing when I was asking about these things, too. And it's, you know, people have analogies, I think resonate. And for me, at least, having those comparisons that are personal help make it a little bit easier, right? Especially in investing because it's never going to be easy. I think 80% and you have to make a call.   Michael: Totally, totally. Well, I'm gonna let you get out of here in just a minute. But before I let you go, I want to know where your portfolio's headed from here. What's next on the docket? What do you got your sights on?   Derrick: Yeah, sure. So again, check us out WestirvingCapital.com we're looking to continue to expand in your area, you know, just similar to you, Michael, right, Cincinnati, and Northern Kentucky, that sort of those sort of like, you know, markets, I think are ones that have upside. There are a lot of positive economic indicators. For those areas. It's affordable. With the work from home trend, people may look for places that are more affordable than coastal cities, that will continue to go right, we will continue to look to invest in those areas, again, looking for mismatch or mismanaged properties, both on market or off market.   And again, sticking to that niche, right to the 19 units is sort of where we want to stay like we don't need, we don't see the need to have 100 unit apartment building. For us, we think that there's going to be a great demand for high quality, multifamily housing. And that's what we'll say. I think from there, right, we, you know, our buy partners are always looking for other opportunities in terms of our business. So, you know, thinking about ways that we can also help other investors, right, whether that's through real estate services, real estate, back end services, things like that, is something that we're looking to expand into.   Yeah, nothing on the horizon yet. But again, we're thinking of ways that we can continue to help investors like us, you know, who who are smallish, want to continue to grow. So again, like trying to figure out ways that we can, you know, expand into real estate services is probably the other option, right? So we'd have an investing arm, and then the services arm is sort of where we're looking to trend probably over the next two to three years.   Michael: That's really exciting. That's what it is. And it seems like it's the next logical progression. Because you've got kind of your baseline built at the physical properties. Now going and supporting yourselves. You hear so much about property manager businesses, like I started out of necessity to manage their own stuff, and like, Oh, well, we'll help that that friend or that family member. That's really exciting. I can't wait to see where you take it from here.   Derrick: Yeah. Thanks. Thanks a lot.   Michael: And so if people want to reach out to you have additional questions is the best place check out wwestirvingcapital.com? Or do you want to share?   Derrick: WestIrvingCapital.com is our website, there's a Contact Us form there, which is really great. And again, our main email is [email protected]. So you can either submit a submit on the site for contact us, or submit an email to info and one of us will respond back and again, we're happy to help out any way we can. We won’t have all the answers But again, we were sort of in many of the same shoes as many investors out there. Just you know, we started only recently, so we're still new to it as well. And we're still learning so happy to share, share, to share the advice.   Michael: That's great. And just so anybody out there I mean, my personal opinion, it sounds like you probably share it as well there. If anybody says they have all the answers run don't walk the other way. Because they're, they're full, they're full of that comes out of poopy toilets.   Derrick: Full of what comes out of poopy toilets. Yes, yes, exactly.   Michael: Man. Well, this. This was great. Derrick, thank you so much for coming on and sharing your story and tidbits of advice. There's a lot of golden nuggets in there. I definitely look forward to touching base with you again shortly.   Derrick: Thanks so much Michael. And thanks for the time and again those those those those who are looking to invest Rofstock Academy is going to be great for you and again, using Stessa to help manage, it's gonna be awesome too. So Best of luck to all those out there who are just getting started.   Michael: Right on. Talk to you soon, man.   Okay, everybody, that was our episode a big big, big thank you to Derek after the recording of this. He and I were chatting we definitely want to have him back on. He has a wealth of knowledge. I highly recommend you go back and listen to this episode again. As always, if you'd like the episode, feel free to give us a rating or review wherever it is using your podcasts. If you're checking us out on YouTube, hit the like and subscribe button below us we can continue bringing you content like this. We look forward to seeing on the next one and happy investing.