Derrick Acuff (02:39):
And that was a very pivotal age, I think I was 17 at the time, and it just changed my outlook on life. But the main takeaway from that four-day trip was, I need to be around people that think like this because nobody in my hometown where I was from, other than my friend’s dad, really owned anything. So it just changed my whole perspective. So when I was 19, I saved up money from that trip until I was able to move, I moved to Houston. And still, at that point, the whole idea was to get into oil and gas, I just realized that’s where the money was. In Texas, it’s very prevalent, easy to get a job. You could start out making six figures.

Derrick Acuff (03:17):
So my goal was to go to school, because I was in college at the time, and become a petroleum engineer. And then eventually I just assumed in my late 30s or mid-30s, whenever I would start buying real estate. We just give ourselves these unrealistic timelines. And whenever I was in college, I always did okay at college, I just… I hated school. But what is learned since getting into real estate is, I don’t hate learning, I just hated what they were teaching. And I was finishing up my associate’s degree and I remember I heard this quote that was, “You’ll never learn to make a million dollars from somebody who makes $70,000 a year.” And around that time I had gone to one of these seminars and found out about real estate and wholesaling.

Derrick Acuff (04:00):
So it was just this perfect storm of me finishing my associate’s degree, going to the seminar, hearing this quote and just realizing, “If I ever wanted to do something different with my life, that was the time,” because I didn’t have any student loan debt. I had been paying my way through college and I knew I was about to take on student loans to finish, to get my bachelor’s degree. And I had learned about this thing called wholesaling and I just took a gamble. And I was like, “I’m going to try this for two years and see where it takes me.” And here we are almost six years later and I haven’t looked back. Not to say that it’s been an easy journey, but that’s just how I got into real estate.

Robert Leonard (04:39):
What you mentioned about not listening or not taking advice from somebody that makes $70,000 a year when you want to make a million dollars a year, is probably one of the most impactful things that I’ve ever learned. It’s the same idea of not following or learning from somebody that hasn’t done what you want to do. Because for a lot of people, when you grow up, you just listen to your parents, you listen to your friends, et cetera. But then you just sit back and realize, “They’re not actually doing what I want to be doing. So why would I be taking advice from these people?” And it’s intuitive. Why would you listen to them if they’re not doing what you want to do? And why wouldn’t you listen to somebody that is? But for me, it was really a big thing to learn, even though it was somewhat intuitive, but it still really opened my mind. It was mind-blowing to me.

Robert Leonard (05:21):
And it’s hard. For me, I really, really respect my dad. He’s really successful in his own light, but he’s not successful in the areas of life that I want to be successful, in real estate, et cetera. So even though I respect him and what he does, it’s really hard to tell him, “Hey, I’m not going to take your advice on all these other things because you haven’t done what I want to do.” Have you found that to be an issue in any of your parts of life?

Derrick Acuff (05:44):
Yeah. Since I moved out of my hometown, it’s been a lone wolf journey. I feel it isn’t really until now, six years in, that I’m starting to build this solid group of people around me. I always call it separation season. You have to go through this point in your life where you have to realize, “It’s about me,” you have to be selfish. And when I moved out of my hometown, when you move 16 hours away, you realize who your real friends are and the people that stay in contact with you. So I’m just like a burn the bridge type of person. Also, I grew up an only child, so I spent a lot of time by myself with a single mom, always working. I had to get comfortable with being by myself.

Derrick Acuff (06:26):
And even though I was very comfortable when you live 16 hours away and you don’t know anyone, it’s still very scary, but that was the best time of my life, as hard as it was. Because like I said, I realized who was there for me. I also realized, “This is going to be a lot harder than I imagined.” And also, the people that were speaking into my life, not that making $70,000 a year is a bad thing, like you said, success looks different to everyone. I just realized that’s not what I wanted out of life, I wanted freedom. And when you meet somebody that’s a hundred millionaire and you see how they live their life and their day-to-day and just being able to do whatever they want, that’s what I wanted. And unfortunately, to get a lot of those things, you have to have a lot of money and not that money is bad or good, it’s just a tool.

Derrick Acuff (07:11):
And I just realized those people that I wanted to be around and that I thought were successful to me, that’s what they were doing. And I couldn’t necessarily hang around the people that I… It’s like, what got you here will not get you there. So it’s like the people that I had hung around, they were cool, but we were all making the same amount of money. Whereas now, most of my friends are millionaires or very successful people. And I’m a small fish, but that’s good because they’re trying to pull me up and I’m working really hard and I’m also pulling people up as well. So it’s a beautiful cycle, but you definitely have to separate yourself from bad energy, I’ll just say in general, because bad things are going to happen, especially in what we do, in real estate, that’s a guarantee. So if I can limit what affects me from the outside, that’s what I want to do.

Robert Leonard (07:58):
Have you read Rich Dad, Poor Dad?

Derrick Acuff (08:01):
Yeah. Multiple times. My son, we were just talking before we got on, my son is 10 and he’s probably been through, listened to, and read it, I think six or seven times already now because I learned it at 20 something. If he can learn that at 10, I’d already be a millionaire.

Robert Leonard (08:21):
Yeah, I figured you had read it. You were telling me your story about your friend’s dad with the Domino’s. That was the first thing that popped in my head was Rich Dad, Poor Dad. Do you think that was a similar situation? Had you given that any thought?

Derrick Acuff (08:33):
Yeah. It’s funny because you always… I saw a quote this morning, I think my partner posted it. You connect the dots when you look back in life. You don’t know what’s going to happen when you’re looking forward, but when you look back, it all makes sense. And for me, I definitely feel that I lived Rich Dad, Poor Dad because even though my friend’s dad, wasn’t super-wealthy, it just gave me a whole new perspective. And then I had my mom who worked really hard, but a lot of times as a high school student, I had to work at Domino’s to help cover the mortgage because she wasn’t able to… she was working really hard, but she didn’t own anything. And I realized working hard is not just the key to it, you got to work smarter and harder.

Derrick Acuff (09:14):
And when I read Rich Dad, Poor Dad, I was like, “Holy crap. This is kind of my life that I lived through.” But I’m so thankful for that because it definitely just gave me a whole new perspective on life. And at a critical age, from 12 to 18, that’s such a pivotal point, especially in a teenager’s life. So get this new understanding of money and what it looks like, it was definitely very pivotal for me.

Robert Leonard (09:38):
Did you end up going directly into real estate full-time or did you do something after college in between as a job, while you did real estate on the side? What did that transition look like?

Derrick Acuff (09:49):
Since I’ve been at [inaudible 00:09:50] in college, I’ve waited tables, which was, it’s funny that because when I talked to people and they’re like, “So that must not have translated very well, waiting tables to real estate.” And I’m like, “Honestly, I can’t think of something better that you could do before getting into real estate based on the problem solving, having to talk to people really nice when they’re not nice to you.” There are just so many issues that we deal with in real estate that relate. So I was waiting tables and going to college. And then like I said, I finished and I received my associate’s degree and I was supposed to go to the University of Houston and become this petroleum engineer. And I was like, “I’m just going to take some time off, dive into this, do this for two years and see where it takes me.”

Derrick Acuff (10:30):
So I was still working obviously, 40 hours a week, but all my free time was going into studying. But I had analysis paralysis for eight months. So even after I finished school, there were still six or seven months that I just, I knew everything, I listened to every BiggerPockets episode, every podcast, YouTube video, but I never took action. And then one day my girl was in a bad mood and she was just like, “Hey look…” Because every day I’m just listening to podcasts, she’s just at her wit’s end. And she was like, “You know, I love you, but you either need to take action or just shut the F up about real estate. One or the other, I don’t care what you do. But we’ve been doing all this, you put in all this work, but you haven’t actually taken any action.”

Derrick Acuff (11:14):
And that next week I sent out some mailers and got a lead, and we can get into that, what the first deal looked like. But that was another one of those pivotal moments. Sometimes you just need a kick in the butt to take action because we think it’s so hard, but then once you do it, you’re like, “Oh, okay. This is…” It makes it real.

Robert Leonard (11:33):
That sounds like the kind of woman that you need in your life.

Derrick Acuff (11:36):
Yeah. That’s one of many kick in the butts that she’s given me over the last, almost nine years that we’ve been together.

Robert Leonard (11:44):
How did you transition from working and doing real estate on the side to just real estate full-time? How’d you know you were ready? When did you make that jump? What did that look like?

Derrick Acuff (11:56):
Honestly, it’s another one of those things, I hate it, I’ve always hated working for someone else. I’ve never been good with authority because once again, I was an only child, I grew up in the country. I had way too much freedom as a kid. Things that adults were doing, I was doing, so I’ve just never been good with authority. So at my last job, I remember we got a new manager at the restaurant and they just changed everything. We weren’t able to have big sections, so we couldn’t make any money really. On top of that, they were micromanaging. So I hated going to work, I physically hated it. Then I remember I got my first deal on my birthday when I was 24. And then I think I locked up two more deals, and I was like, “Yeah, I’m done with my job. This is it.”

Derrick Acuff (12:41):
And I was still contemplating quitting, and one weekend they just really screwed me over. And they didn’t put it on the schedule, but made me come in three hours early after I had just closed. So I had no sleep, then I was supposed to work at double. And the first weekend they did it, I was like, “Okay, it’s a mistake, whatever.” But then they did it the second weekend. And then I was just like, “Hey, this is going to be my last day.” And I just quit, man. And once again, I just burned the bridges. Not everybody should operate like that, but for me, I do better under pressure. And after that, I definitely went broke several times. And I tried figuring it out in those first two years, but it puts pressure on me. And luckily my girl had a good job at the time. Like I said, she’s super supportive. She knew the vision and I had a mentor at the time, so I had people around me that were doing the business. It was just, I had a lot to figure out those first couple of years.

Robert Leonard (13:32):
What did you do as your first strategy? I know you’re flipping today. Did you jump right into flipping? Is that what you’ve done mostly or your whole time? And what did your first deal look like?

Derrick Acuff (13:40):
So my first deal, it was a probate deal. This family had inherited a house, I think it was a son of this lady. And my first deal was actually very easy, and I took a lot of rejection. It took me six months after, because taking it back, after my girl gave me that kick in the butt, that was in November. So I was like, in January of that year, I think it was 2016, “I’m going to commit all my extra time. I’m going to go 100% in on real estate. Stop dabbling, just listening. I’m actually going to take consistent action every day till I get a deal.” And it took me six months and I went on a lot of appointments, but I was mainly focusing on wholesaling. I realized that’s another reason I have paralysis analysis is, I was learning all these strategies, but I wasn’t doing anything.

Derrick Acuff (14:23):
And I heard a BiggerPockets episode one day, it was like, “Just pick something and go.” And I was like, “It’s going to be wholesaling.” I just started where I was. I didn’t have a lot of money and I knew if I could find really good deals, that’s the key to every real estate transaction. Is if you can find really good deals, everybody said you would figure the rest out. So that’s what I focused on. I started with direct mail like I said. Did that for six months. And then my first deal was relatively easy even though I was at my breaking point the week. And then two days later I go on an appointment and then on my 24th birthday, I got my first deal. And honestly, I just took my mentor on the appointment and he was like, “Yeah, this is a deal.”

Derrick Acuff (15:00):
And then he called me back a few days later, on my birthday. I remember being at the gym and everything. He’s like, “Hey, happy birthday. We got your first deal. We made $8,000, we split it evenly.” And honestly, it was too easy because he did a majority of the work. But obviously, I’d put in the work up until that point. So I just wholesaled. And I did that for the first two years, whether that was by myself or JV-ing with people, I wholesaled for probably two and a half years. And then I bought a rental and then after that, me and my partner got into flips. And then that’s just over the last couple of years, just taken off into its own thing. And now we flip wholesale, we’re building an Airbnb portfolio.

Derrick Acuff (15:43):
I just closed on some land. We’re about to do a four-town home development on top of, like I said, I think we have 12 or 13 flips going on. I’m about to buy a couple more. It’s just all this started though from focusing on just getting really good at wholesaling. I’ve got really good at finding off-market deeply discounted properties.

Robert Leonard (16:03):
What is wholesaling? And why could you start it without a lot of money?

Derrick Acuff (16:07):
Wholesaling is… everybody should start there. Because honestly, so many people crap on wholesalers, and it is honestly the hardest part of this business. If you got really good at wholesaling, you can do anything in this business. But wholesaling to me, I try to simplify everything to a third-grade level. So it’s an A, B, C transaction. A, you have a motivated seller, they have a reason to sell the property. For me, that was a person who inherited a home that they didn’t want. They had a lot of memories and it needed work, it’s always going to need some improvements. So that’s your, A person. B is the wholesaler. I am the middleman and I am basically going to bring in a cash investor, your C person, your cash buyer, who is going to then close on the transaction. And at closing, which you don’t even have to attend, you will get a check of that portion. And you just are providing a service from A to C. And just like Kroger buys products and they have a wholesale person in between, you’re doing the same but with houses.

Derrick Acuff (17:08):
And I know wholesaling has become so popular. I think there’s definitely a right way and a wrong way to do that, that’s why certain states are starting to crackdown. I like to teach people how to do it the right way though because I think that’s how you’ll last in this business.

Robert Leonard (17:22):
How do you do a JV when wholesaling?

Derrick Acuff (17:25):
So you can do it a couple of different ways. But for me, I try to keep it simple. I want it to be 50-50 because I feel both people were bringing value. Not everybody works like that, I’ve taken less. But if somebody brings me a deal, I just let them know, “Hey, if we JV on this deal, number one, I need exclusivity. You’re not sending us the eight other wholesalers. It’s just me and you working on this deal. And give me at least three to five days to sell. If I don’t have any interest, I don’t want to waste your time or the sellers.” So we’ll then partner on that. I’ll bring in the buyer, they’ll bring in the seller. I’ll handle the paperwork, that way I know I’m not getting left out of the deal. And then I’ll be in communication with a title. And once, same thing, the transaction closes, they’ll split that assignment fee on the HUD or closing statement. And yeah, it’s pretty simple.

Derrick Acuff (18:12):
And when I went broke one of the times, that’s actually how I got myself out of a rug was I would just sell everybody’s deals. And that’s actually how I met my business partner too. But JV strategy can be very powerful if you have no money and a lot of hustle. You do have to still provide value, but it can be done.

Robert Leonard (18:31):
And for anyone who doesn’t know, JV just stands for Joint Venture. So you’re basically just partnering with somebody on a deal. Why isn’t inheritance a potentially good opportunity?

Derrick Acuff (18:41):
I think probates… and we still do probates to this day, I think it’s very powerful because other than a referral lead, it’s one of the top motivations. Typically, it’s mom or dad’s house, they grew up there. So it’s already on a personal level, a very sticky situation. They remember swinging in the backyard, playing ball in the house. On top of that, these homes, elderly people have lived there. A lot of times they still take care of the house is in great condition. It’s just very outdated to today’s standards. So we want to open up some walls or add some granite, just all this stuff people see on HGTV. But it’s very powerful because they usually need to sell, they don’t want anything to do with the house. Now, typically they’ve already been through the probate process, which takes usually six months to a year.

Derrick Acuff (19:29):
So not only have they had to deal with the death, the burial, all these other things that go into bringing the family together, there are family issues. Then you have this asset that everybody wants a part of, it’s just a big burden on the family. And if you can come in and make it about them and focus on the people and their problems, you can usually… as wholesalers, that’s mainly what we do is exchange convenience for equity. And that’s what you can do with inheritance and probate properties.

Robert Leonard (19:59):
Anytime I talk about wholesale, especially to people who aren’t in real estate yet, they’re looking to get started, pretty much, no one believes that you can get a property like that, that’s under market value. Because they always wonder, “Why would they go under contract with you on that property when they could just call a real estate agent and have an agent list it for them, and get what it’s actually worth?” So talk to us a little bit about how these opportunities are real and how they actually happen.

Derrick Acuff (20:23):
Yeah, absolutely. And it’s funny to me because it blows realtors’ minds the things that we can do. Because the thing I love about investing is pretty much how I’ve lived my life, like I told you, I get so much freedom. There’s obviously a right and a wrong way to do it. But if done correctly, people just don’t want to deal with a realtor, they don’t want to deal with people showing it. All the things they’re going to tell of a traditional sell, they just don’t want to deal with, they need convenience. Then the thing that I want to point out to people is the homes that we get though are always in terrible condition. Some of the homes that I’ve bought recently, they’re not in a terrible condition, they just have situations. So I’m going to give you a key example of the biggest wholesale deal we ever did.

Derrick Acuff (21:07):
It was a $50,000 deal. And there were two people, it was Pam and Jim, they live in Dallas. And once again, my partner and I just went in and had a conversation. And this is exactly why someone would sell their house for so little. They had a house through Corona, they had been working in Dallas, they were driving back and forth, but they just wanted to live out of their camper, take all the equity that they had earned in their house, which was two or 300 grand and just live in their mobile home. Simple, wanted to live in Dallas. [inaudible 00:21:40] construction and project management, that’s just how they wanted to live their life and retire. Now, when we went on the appointment and we actually just sat down and talked to them for an hour and a half, not even about the house, just started talking to them.

Derrick Acuff (21:54):
He was from Tennessee, I’m from Tennessee, so we built a great rapport. What we found out is the house was a very sensitive subject because when their son, I think when he was in high school, I think he was 18 or 17, he overdosed on opioids, which I’m very familiar with in Tennessee, it’s a bad problem. But once again, I just genuinely went in and talked to these people and understood their problem. Now, when we got the lead, the home was worth close to 430. They had a number that they wanted. And to them, once we talked, at the end, I was just like, “Hey, I’m…” This is the same line I tell everybody. “I’m not here to beat you up on numbers, which is totally true. I just need to know what your number is and I’ll see if I can make it to it.”

Derrick Acuff (22:34):
And for them, their number was 325. In my mind, I was at 350 worst case, but they wanted 325. And I was like, “Hey, look, I’ll give you 330,” because that way it’s still a win for them, they’re getting 5,000 more. But the house wasn’t in terrible condition. And then I turned around and I sold that house to a realtor, her and her husband were flippers and they bought the house for… we got it for 330, they bought it for 380. So we made $50,000 in three weeks. But the main point in that is, everybody got what they wanted out of the situation. But it was because we genuinely went in and understood their situation. They also needed time to get things out. They needed a little bit of money to move all this stuff that they were keeping a Dallas.

Derrick Acuff (23:21):
There was a couple of things that they wanted to leave in their house, that was their sons. So it was just a bunch of touchy subjects. But by being a good person and just going in and listening to them and their situation, they had a number they wanted, they had an idea of what they wanted to happen and we just put all those pieces together. And for that, they were willing to give up some of their equity. So that’s a simple form of wholesaling. We exchange convenience for equity. And some of the things that I’ve done for sellers is ridiculous. We’re about to move a seller right now in a house from Houston to North Carolina. And his wife has to come… there are so many moving pieces that go into wholesaling. And that’s why I always say, “If you can figure out wholesaling, you can figure out any aspect of this business.”

Robert Leonard (24:07):
I know there’s going to be a lot of people that hear that example, and they’re just like, “That’s a one-off, it doesn’t happen. People aren’t going to give up $50,000 just so they don’t have to deal with a real estate agent.” And in a sense, I think they’re right. This is probably what… tell me the numbers, about one in 100 people maybe, one in 100 leads you get? Two in 100 maybe? I don’t know what the numbers look like, but it’s not everybody that this is going to happen for, but it is possible.

Derrick Acuff (24:30):
Yeah. You take a lot of rejection, and that’s fine, I’m not for everybody. But that’s any business. You run through numbers, you find those people that you trust and want to do business with you. And it’s just not as crazy. Sometimes we focus on, “Why would someone do that?” That’s not for you to understand. If you just had a pain in your side and you wanted to get rid of it, sometimes I’ll pay extra money just to get out of that pain right now because my time is more valuable. Like you said, that’s one in 100, and we don’t wholesale as much. But our average wholesale fee is 15 to 20,000 depending. But like I said, that was our biggest deal. But I just wanted to give that example because that house was actually in great condition. And those people, that was an ideal situation of everything that was going on. But it is possible.

Robert Leonard (25:21):
We talk about probate, inherited properties. What are some of the other options that are out there to find deals? Not necessarily the actual strategies, how you get those leads, we’ll talk about that in just a second. What are some of the other situations that people are going through, like probate, that you have found popular for finding good deals?

Derrick Acuff (25:39):
I think you just need to think about life situations, really. What would make someone want to sell their house? And that’s just motivation. So what does motivation look like? It looks different to everybody. But for me, I would think, if somebody had a house and they had really bad tenants and they just went through an eviction, they probably might think about selling, just to get rid of that pain. Or if somebody owned a house and they didn’t live there, and I realized that the water has been shut off for six months. Why has the water been shut off? So they’re getting notes from the city because their grass is overgrown because nobody lives there. So these are all the things you can think about. Probates, code violations, evictions, water shut off. They have lists for all the fire-damaged houses in the city. Divorce, pre-foreclosure, inheritance, just really, life situations.

Derrick Acuff (26:31):
Tax default is big in Houston because if you don’t pay your taxes, they’re going to foreclose. So if somebody is going to lose their house, they would rather get something than nothing. So you’ve just got to figure out how to target these motivations and then problem solve and get these people the number that they’re asking.

Robert Leonard (26:47):
So we understand the different types of situations that might come up that could lead to a good opportunity for somebody like us as investors. How do we actually find those people? How do we find those deals? You mentioned direct mail. How does that work? What other strategies are you using?

Derrick Acuff (27:01):
So we actually haven’t done direct mail in probably two years, but we’re actually thinking about starting again next year, just to test a few things. But for us, right now we’re doing a lot of cold calling, a lot of texting. We do SEO, which is Search Engine Optimization. Those are really good leads because that’s people looking for you. Anytime you can have inbound versus outbound leads, that’s going to obviously be higher motivation. But we get a lot of deals from cold calling. And then this month, actually, most of our deals came from social media, just people seeing what me and my business partner do, we have a little bit of a following. And also just giving back, helping people. We help so many new investors close their first deal. And now that we’re buying, we can make deals, work more, pay them a little on the front, some on the back, just whatever we need to do to put the deal together.

Derrick Acuff (27:50):
But we get a lot of deals from social media. Pretty much most people have followed my journey from a server, five and a half years ago to now. I’m buying five, six houses at a time, sometimes a month or in a week. So I just share all that information and people reach out. But you have direct mail, RVM, one of those voicemails, direct mails with the letters, postcards, cold calling. You can do PPC, which is pay-per-click, the little ads on the side of Google, and stuff like that, so. However, you can pull lists and just target these people and re-target them over and over again because we’re all humans and we know how marketing works. It’s going to take six to 10 times before somebody even thinks about calling you.

Robert Leonard (28:37):
Speaking of new investors. In a recent video that you put out, you mentioned that you still get nervous from time to time when you’re closing a deal, even though you’ve done hundreds of them. How can new investors get over their fear of being nervous? How can they just push through that, despite being nervous?

Derrick Acuff (28:52):
Like Nike, just do it, man. For me, I do get nervous, mainly on cold calls. Even if you gave me a warm lead, I just hate over-the-phone interactions, you can’t read people’s body language. I do a lot better in person. So being able to read their language, read how they pushed back or pull in when I say certain things, I just do better in person. But I think just doing it, that muscle just gets stronger. Even though I hate it, I would still do it. There’s a lot of things that I hate that I still do. I don’t love working out, but I make myself do it. There comes a certain point when you want to learn a new skill that you have to look at yourself in the mirror and just really ask yourself, “Are you about it?” And maybe you’re not, that’s totally fine. But for me, my fear of not knowing what could happen… I risk everything to moved to Houston, so I can’t leave anything else on the table anymore.

Derrick Acuff (29:45):
Just because it makes me uncomfortable, I’ll just eventually hire somebody to do those things. Like my partner, he loves hopping on the phone. He’s one of the best communicators I’ve ever met in this world. But for me, I just would rather do it in person. I’m a red personality, I want to get to the point. So that’s why I focus on construction and dealing with other people rather than trying to close deals. I’m more of the driver, whereas getting things done, where he’s more like the smaller details and communicating with sellers and stuff like that. But I think just strengthening that muscle, just doing it. Forever I was nervous about doing stuff like this, podcasts, and speaking. I’m very illiterate, I’m from a small country town. It’s just that I have those insecurities, but I want to get better. I want to be a better communicator. I want to be a better dad. I want to be a better investor. So to do those and get better at those things, you’re going to have to do a lot of things you don’t want to do. That’s just life.

Robert Leonard (30:37):
You recently had a property where your windows got stolen and your contractor ended up leaving you high and dry. Talk us through what went on with that deal.

Derrick Acuff (30:47):
Man, flipping has taught me so much and contractors, as they’ve heard on BiggerPockets and your show, are the hardest thing. And that’s been my biggest lesson this year. So what happened was, we have these two projects, they’re going to be our first Airbnbs. We’re building an Airbnb portfolio, which we can talk about later, but in this very gentrifying area, with gentrifying areas comes gentrifying problems. And we’ve had a lot of theft and we lost our windows. I don’t know if the contractor himself stole them or somebody else did. That’s neither here nor there. The point is the windows got stolen. And then at the same time, there was an ice storm in Houston, which has not happened in so many years. So with that, we had all these other flips going on, some of them flooded.

Derrick Acuff (31:40):
So my contractor, still to this day, that specific one, I have not talked to since the storm, since the windows got stolen, and that’s just the… I just got to the point where I was like, “I’m not chasing around another grown man. I’ll just have to take that loss.” But contractors have been the hardest thing. And knock on wood, now I have an amazing GC who’s killing it, but I’ve probably been through easily 15 contractors this year. But also, all those lessons just taught me what to look for and how quick to spot the BS, and all the things that contractors will over promise and under deliver. I would much rather you underpromise and over-deliver, but most people don’t operate like that.

Robert Leonard (32:24):
You’ve mentioned that you have 3, 4, 5, 6 properties and projects going on at the same time, as well as trying to buy more. How do you manage so many projects at once?

Derrick Acuff (32:35):
It’s gotten easier mainly because I’ve learned systems and flows. Also, the deals that we’re doing, I’m a very lazy flipper. So we try to get deals that are going to be 30, $40,000 and under, just quick turnarounds, two or three weeks. But having a good GC and good money partners and people that just trust us, they do their part and they let us do our part. That’s been the most beneficial thing. Relationships have really taken us to the next level. Then like I said, just learning the flow of… like I said, I think we own 12 right now. Four or five of those are pending selling or just hit the market, three or four are actually under construction, two just finished. There are just different phases of it. But having a strong team around you is what makes the difference. And I haven’t always had that really, until the last six months. And as long as everybody stays on the boat we’re going to have a really great year. And we’re just going to keep growing and the amount of houses and people that we can impact and help.

Robert Leonard (33:36):
Partially, because I think a lot of people only talk about wins in real estate, and a lot of podcasts are just win after win, after win, which is… it’s motivating, you can learn a lot from it. But I think you can learn a lot from some of the negative things people have gone through. And also, I think it’s important for people that are listening to the show to realize real estate isn’t always sunshine and rainbows. So tell us a bit more about your horror stories that you’ve had in real estate.

Derrick Acuff (34:02):
Wow. I don’t know if… we could do a whole separate podcast. I always say and I made a post about this the other day, is like, “You’re going to take way more losses than you do wins, especially in real estate.” There’s a reason most people don’t last more than two years in this business. For me, I don’t have an option, this is my key to wealth. But I can tell you, we have a house right now that we’re flipping that we bought and the guy, he was just dumping kitty litter down the tub. So the pipes in the freeze obviously burst, they were full of cat poop. And the house had a leak wall. I went to check on the house before we closed on it, another pipe had burst. So when I pulled up, there was water spewing out of the house through the garage, everything. I’ve had a water heater burst in one of our new rentals a couple of weeks ago, flooded the kitchen.

Derrick Acuff (34:55):
My very first rental was probably the worst. That house caught on fire. I had crappy contractors and they threw rags in the toilet, so then it backlogged and flooded all over my new floors. I also had an explosion randomly happen on a chemical plant that blew out a window. Luckily where my house was placed, that was the only damage. Because some of those houses got completely blown off a foundation. Man, I could go on, I really have so many stores. Like I said, my contractor just leaving me high and dry or stealing from me. We’ve caught contractors doing heroin on our job sites. That house where the windows got stolen, I’m having to redo a majority of the work because we didn’t pass inspection because of crappy contractors. Have you noted most of these stories relate back to crappy contractors?

Derrick Acuff (35:44):
I got extorted one time for $3,000 from a contractor that my GC hired and did not pay. But he was very sketchy and he basically placed the mechanics lien on a house that we… I have so many, I could go on for days and days. But I say this to say don’t let it scare you. I’m so mute to good and bad things. Sometimes my wife is like, “How are you so sane?” Just because so many bad things happen. But it’s just like a muscle, it strengthens. You figure out how to solve it. And then you just start learning to work with smarter people. Pay a little bit more money for contractors, then you’ll have to worry less.

Robert Leonard (36:26):
For those who don’t know, what is a mechanics lien?

Derrick Acuff (36:29):
A mechanics lien is just a lien that you can place on a property. It’s kind of crazy, Texas has these weird laws. But if you lived here and I said I worked on your yard, I could just go file mechanics lane, anybody can do it to anybody. But it just says that, “I wasn’t paid for this job and now I’m putting a lien on your property. So if you ever go try to sell and somebody does a title search, which you should, if you’re buying a property, it’ll pull up that lien.” And I think it takes 10 plus or 20 something years to fall off, and then you still may have to fight it. It just depends on if the person’s still a business. But it’s just a lien someone can put on your house and it’s kind of crazy.

Robert Leonard (37:09):
So with all these issues that you’re finding with contractors, what are you seeing as a common characteristic amongst them, that you’re looking for as red flags for future contractors that you hire?

Derrick Acuff (37:21):
I just made a video on YouTube about finding good contractors, which is almost an oxymoron. But basically, I think the main thing is just realize… and this is as a life lesson, how you do anything is how you do everything. So if you call up a contractor to come bid out your house and they’re 20 minutes late, that’s a red flag for me. If they don’t even show up to the appointment because something came up, then you don’t value my time, that’s a red flag for me. Or if you’re walking the job and they’re not diligently writing things down, taking measurements, pointing out things that may become an issue in the future or have initiative, that’s a big thing just with dealing with people or contractors. A lot of contractors are lazy. My last contractor, he was a great guy. However, his workers did not pay attention to detail, and not even like I’m trying to be super micromanaging, but just like, “Hey, you guys remove wood over here, but you didn’t paint.”

Derrick Acuff (38:19):
So I just have this lumber piece that looks…it was on the wall and everything else is painted. Just being lazy and not taking initiative, not paying attention to detail, not showing up. I show up on the job and there’s only one person working, but I’m paying thousands of dollars. Never give anybody money upfront. Never give anybody money upfront. If they want money, just tell them you’ll pay for the materials the first week and you’ll provide them for the job. Ask them when they quote you, “Is that for labor and materials or just labor?” And if you just get a bad gut feeling, and it takes them eight days to get you a bid after they… Like my last guy, every time I try to still quote new contractors, I was already four days into the job by the time one of the guys got me that bid back, I just never responded. Because it’s like, “I’m already halfway through the job at this point. It was a small job.”

Robert Leonard (39:14):
We’ve talked a bit about your struggles, what can be hard in real estate. But on the flip side, what’s going well in your real estate business, what are you proud of that you’re succeeding at?

Derrick Acuff (39:25):
That’s a great question. My mental health is good, I think that’s a major one. I always say the most important real estate is between your two ears. So trying to manage all these flips, buying rentals with my partner, buying rentals for my personal portfolio, trying to be a dad. My son’s playing three sports right now, we have a toddler. But honestly, the thing that I’m most proud of is my willingness to keep going. I’m super excited about my life right now and where things are heading. For my life, when I think about when I lived in Tennessee, I’ve hit the peak. For me, as long as I made six figures and I was in real estate, that’s all I ever wanted out of life. So for me, I’ve already hit that peak, so everything else is extra. Not that I’m slowing down by any means, I’m hungrier than ever, but I’m for once content.

Derrick Acuff (40:13):
I don’t have things to worry about, like my lights getting shut off. My wife doesn’t have to work anymore. I was able to retire her about a year ago, which was great because she supported me for many years. Just being able to… like last week, we took a last-minute trip to Colorado to visit a friend and learn real estate. Just simple things I’m just trying. I’ve been in this total point of thankfulness, especially since COVID, it slowed us down and made us all realize what was important in life. And just having my daughter and just slowing down and spending a lot of time with them. It just made me realize, “Hey, I do need to go harder but also I’m very thankful to be at this position way before 30. Well, a year before 30.” But still, I try to distance it as much as I can. But my point being is, I’m doing better than most people my age, not to brag. But I’m also realized that I have a very long way to go, and for that, I’m very thankful.

Robert Leonard (41:09):
What impact has social media had on your real estate investing and just your business as a whole? Do you think it’s worth spending the time and money for a new investor to build a personal brand on social media to help their real estate investing if they’re just getting started?

Derrick Acuff (41:25):
100%. I’m a big proponent of social media. Social media has taken my business to so many different levels. On top of that, it’s just my own documentary that I get to look back and just see the transformation. Because the thing that I try to relate to with most people… because social media is a lot of fluff too, is the reality of a regular guy who was waiting tables, was a broke college kid, can get into this business and really start building wealth. And yeah, it’s going to take longer than you think. But social media has just snowballed that, where I’ve been able to meet awesome people like you and everybody in the mastermind. Getting on podcasts like this, just people learning me. Because I think exposure equals expansion.

Derrick Acuff (42:09):
So that’s my whole thing with doing it is, if you see somebody that looks you and you hear their story and you were late with that, know that it’s possible. Because there are the fake gurus and all this stuff, but I’m a regular guy, drive a cash car, I’m just trying to buy assets for my family. I’m not rich by any means. I actually live broker than most people who would be in my position because all my money gets reinvested. I want people to see that it’s possible. And for me, I get to see other people that we’ve helped. There’s a guy on our market that he struggled in real estate for a year and a half, and then he started working with us. And now we just locked up I think our sixth property that we’re going to buy from him.

Derrick Acuff (42:54):
To just see his journey, and that’s just one of the many people that we’ve been able to impact. It’s just beautiful. And then, like I said, I just get to document the whole thing and help more and more people and meet cooler people, it just makes the world smaller. And for that, I’m very thankful. And you need to find your tribe when you’re doing something like this. I don’t know about you, but I’m definitely the wealthiest person in my family. And I’m literally branching out to a whole new generation of people that I realize that money is possible, wealth is attainable. For generations, I’ll be that one person that did something different for our family and our legacy. And that’s not going to be easy, but that’s why I just try to share my journey on social media because people need to see that it’s possible.

Robert Leonard (43:41):
For new investors that are listening to the episode, whether they’ve done no deals or just a couple of deals, where do you see the best opportunities for them?

Derrick Acuff (43:49):
Getting really good at finding off-market, deeply discounted properties. It’s crazy to me that people still say, “I’ve been doing this almost six years, that you can’t find deals.” And it’s like, I just bought a 170 to $180,000 house for $55,000. The fact that people say that that’s not possible, it’s definitely possible. So if you just got really good at that one skill of finding deeply discounted properties, preferably off-market, everything else will take care of itself. Whether you wanted to keep it as a rental or flip it or partner with somebody or wholesale it. If you got really good at that one skill, you’ll be ahead of everybody.

Robert Leonard (44:31):
So we’ve talked a bit about what new investors should do to get started and what you’re doing in your business now, what are you going to do next? What is your end goal?

Derrick Acuff (44:41):
For me, obviously bigger deals. I’m really fascinated with self-storage and mobile home parks, just growing up in Tennessee. And it was something that always as a kid made sense, and it looked that’d be the only viable long-term business there. And now that I get older and I’m actually in real estate, I realized it’s one of the best asset classes. Obviously, it’s a hot thing right now, but it’s something I’ve been looking at for a few years. So bigger deals, like I said, we’re about to do this development deal that we just closed on yesterday. So that’s going to, like [Brandon 00:45:11] always says, just add another tool to our tool belt. We’ve done some creative deals as well.

Derrick Acuff (45:15):
So just really doing bigger deals, more deals. I want to keep growing the social media. And just keep living life, traveling with my family, just doing more dope stuff really and enjoying life and buying a lot of real estate and starting other businesses. I’m an entrepreneur at heart, so real estate is just the key to get me going and we will forever be a part of my life. But I have a few other businesses that I definitely want to get involved in and just have multiple streams of income. And yeah, man, just get wealthy and do that with my family and just enjoy it.

Robert Leonard (45:48):
We have a segment at the end of our show, it’s called the action plan, where I ask every guest three questions that give everybody listening three steps to take when they’re done with this episode. So the first question is, what is a habit or principle that you follow in your life that you think has had a big impact on your success, but not enough people do, but people listening to the show should?

Derrick Acuff (46:09):
I will say, working out or taking care of your body. And when I say working out, I don’t mean just going to the gym. That’s great, I do it mainly for my mental health. But that mental health, focusing on, making sure you’re good. Checking on your friends, but also having someone to talk to and relating, and finding your tribe that people understand what you’re going through. Because sometimes it can sound like you’re complaining if you’re just talking to people that aren’t on the same journey as you, or it may sound like bragging just because your problems are different. I have friends that are millionaires that complain about how expensive it is for their Ferrari to get changed. I know they’re not bragging, that’s just their reality. So just keeping your mental health on track and good people around you.

Robert Leonard (46:53):
I’ve been asked that question before and fitness, health is always my answer, too. So I really like that answer.

Derrick Acuff (47:00):
Yeah. It sucks, man. I’d say I love fitness, I love how it makes me feel. But nobody enjoys just beating themselves up, but you feel great afterward. It’s like the total, how life works, you have to do it.

Robert Leonard (47:16):
Yeah. I think I really do like it though. I really think it’s something I love. I don’t know why.

Derrick Acuff (47:21):
It’s good. It’s easier for you then.

Robert Leonard (47:24):
What has been the most influential book in your life? I don’t necessarily mean your favorite, but more so had the biggest impact?

Derrick Acuff (47:33):
Yeah, it’s funny because I gave this one [inaudible 00:47:35], I’ll give it here too, the other day. It’s The Slight Edge by Jeff Olson. That book is… It’s just like when I first started entrepreneurship and real estate, it’s really just a bunch of small stories in one big book, but they all relate and they’re all told differently. And there are just three or four stories that stick out about being consistent and how hard it’s going to be. And I just recommended that book to someone else and they were telling me how much they loved it. And I was on another podcast and they said that book was very impactful for them. So The Slight Edge by Jeff Olson.

Robert Leonard (48:07):
I have actually never heard that one before. I’ve never even heard of it. So I’m going to pull it up here on my Amazon and add it to my list. Probably added to my shopping cart.

Derrick Acuff (48:15):
Nice. Yeah, it’s a very easy read. Like I said, it’s probably 20 small stories in one book, but they’re all great. Quick reads, easier read for sure.

Robert Leonard (48:23):
When this episode is over, before the listener jumps to their next podcast episode that they have queued up, what’s one action they should take that can help improve their life, career, or business?

Derrick Acuff (48:35):
Follow me on Instagram and see. And I don’t say that egotistically. I say that as, I really do the business. Whether you want to do real estate or not, I think everybody should buy some form of real estate for tax benefits and retirement. But I can show you guys how to do that and not really have a lot of money out of pocket. It’s going to take a lot of work, but you can see what it’s like. And like I said, I’m a normal guy. I feel I’m pretty relatable because there’s nothing really too special about me, I’m just a very hard worker. So yeah. Follow me for sure @flippingahouse, one word.

Robert Leonard (49:09):
Before we give a hand-off to other places that people can find you, I like to wrap up the show by turning the tables and letting the guests ask me a question. So Derek, what question do you have for me?

Derrick Acuff (49:21):
What does real estate mean to you and how big of an impact has it been on your life?

Robert Leonard (49:26):
What real estate means to me is freedom. I think if I had to summarize it all in one word it would be freedom. And that’s for a couple of reasons. Freedom in the sense that you get to choose what you do, you decide, do you buy single family? Do you buy multifamily? Do you flip? Do you wholesale? Do you do Airbnb? You have the freedom to choose, there’s nobody that’s going to tell you what you have to do. So you get to choose. And then the other side of it, of course, is financial freedom. Depending on your strategy, you could have passive income, which could lead to great financial freedom in the future. So to me, that’s what it means. And in terms of the impact, it’s had on my life, it’s had a huge impact. It has impacted me financially, but more so from a mindset perspective, I think.

Robert Leonard (50:05):
If I’m thinking about the biggest impact is more from a mindset, because a lot of the bets that I’ve made in real estate so far have been super long-term. So I haven’t really reaped the fruit of those bets yet. So financially, it’s been okay, but it hasn’t been massive yet. But 20 years from now, it’s going to be massive and I’m going to look back and say, “When you were 25 and now you’re 45, you made some really good decisions that your past self really thanks you for it.” So financially it hasn’t been massive yet, but mindset is just huge. It’s really taught me that I can do anything, that you could do anything you want. And it makes you approach the world in a different way, business in a different way, you start to look at everything differently. And yeah, I think the mindset piece has been the most impactful for me.

Derrick Acuff (50:47):
I just want to add to that, man. Like you said and like I referenced earlier, you don’t buy a house and get rich tomorrow. I’ve bought two or three houses and I’ve gained a couple hundred thousand in equity, and I’m just now realizing that now. But I still can’t do anything with it. I can pull it out and use it, equity isn’t real until you use it. But I think me and my partner talk about this all the time, in 20 years we’re going to wish we could talk to ourselves today and just high-five ourselves like, “You did that, man. Thank you so much.” Because my life, like I said, I can afford a few different things, but for the most part I still live like I did when I was a server, all my money just gets reinvested or goes out. As soon as it comes in, it already has a designation of a new property.

Derrick Acuff (51:32):
So I think people need to realize that. And I’m on year six like I said, and I’m just now realizing a small gain. And it snowballs, that’s what it talks about in The Slight Edge. Don’t think though, just because it’s 10% now, it’s not going to jump to 70% one year. You just have to keep going. And most people don’t keep going.

Robert Leonard (51:51):
A lot of people, at least in my life see, and they’re like, “You’re buying rental properties to get 300 bucks a month, what is the point of that?” And I’m like, “Yeah, but I’m going to own, I don’t know, 50 units, 100 units at $300 a month, then it’s going to start to add up.” And the other piece that I think a lot of people miss is, even if I didn’t buy another piece of real estate from today on, I could retire on just what I own today. Not now, but in 20 years when everything is paid off, I’m going to have over a million dollars in real estate that’s completely paid off, that’s all mine. And people try to save up in their retirement accounts, in the stock market to save over a million dollars, I already have that in real estate because people are going to pay that off for me over the next 20 years.

Robert Leonard (52:29):
And so that’s the other piece is, right now, it’s not huge financially, but 15, 20, 30 years from now, it’s going to be big. So I guess that’s a key takeaway for everybody listening to this episode. Think long-term always, but especially in real estate. Derek, for everybody that’s enjoyed this episode, where is the best place to find you?

Derrick Acuff (52:49):
Yeah. I think the best is probably Instagram, but I’m also working on building my YouTube and TikTok, and it’s all @flippingahouse, one word. And yeah, just reach out. And I answer all my DMs. I try to put out daily content on TikTok, weekly content on YouTube, and daily content on Instagram. Just sharing my day-to-day and what it takes to become successful. And it’s not that exciting like you said. It’s the boring stuff, but for me, I love it because I know that it’s a proven method. Like you said, we’re going to thank ourselves. There’s a couple that we met that their son goes to school with us. They’ve been in real estate for 30 years and they’ve just bought a bunch of rentals and now they do commercial. And I know the formula works over and over again, and they live exactly how I want to live. And like you said, it’s just freedom, freedom of choice.

Robert Leonard (53:39):
I’ll be sure to put a link to your resources in the show notes below for anybody that’s interested in connecting with you, checking out what you’re working on. And you can go to my Instagram. I don’t follow a lot of people, but Derek is one of… I think I follow less than 50 people, Derek is one of those people in the 50, so you can also find him there if you didn’t catch his username. Just look at the people who I follow and you’ll be able to find him there. And my username is therobertleonard. Derek, thanks so much for your time. Really appreciate you joining me.

Derrick Acuff (54:06):
Absolutely. Thank you for having me.

Robert Leonard (54:08):
All right guys, that’s all I had for this week’s episode of Real Estate Investing. I’ll see you again next week.

Outro (54:15):
Thank you for listening to TIP. Make sure to subscribe to We Study Billionaires by The Investor’s Podcast Network. Every Wednesday we teach you about Bitcoin and every Saturday we study billionaires and the financial markets. To access our show notes, transcripts, or courses, go to theinvestorspodcast.com. This show is for entertainment purposes only, before making any decision consultant a professional. This show is copyrighted by The Investor’s Podcast Network. Written permission must be granted before syndication or rebroadcasting.