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Show Summary
In this conversation, Derrick Seymour discusses his approach to real estate investing, focusing on building a portfolio of buy and hold properties for passive income while also engaging in fix and flips for capital gains. He emphasizes the importance of evaluating properties based on location, cash flow potential, and tax implications to make informed investment decisions.
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Investor Fuel Show Transcript:
Derrick Seymour (00:00)
So again, I got in around 2005. You know, that’s when we had the big crash. So properties was really cheap. So I didn’t start like a lot of real estate investors with fixing flips or wholesales. I actually started purchasing rentals first because they were so cheap. know, I mean, I purchased the rental as cheap as $5,000. So yeah, I started off purchasing rentals and that’s how I kind of learned my way.Kristen (00:08)
Yeah.Wow.
Derrick Seymour (00:30)
hiring contractors and people to come fix the rental up. And once I got it fixed, then I started renting them out and it kind of went from there.Kristen (02:10)
Welcome back to the Real Estate Pros podcast. I’m Kristen and I’m here with Derrick Seymour. He is an investor who has fix and flips, flying holds, and he’s out of Northwest Indiana in Chicago. So thanks for being here, Derrick.Derrick Seymour (02:17)
Thankyou. I appreciate the opportunity.
Kristen (02:25)
Amazing. Well, how about you kind of tell us how you got into this industry in the first place, how you got started.Derrick Seymour (02:32)
So I guess started in the industry back in 2005. I had a couple people around me that was already investing and involved in real estate. And I always had a niche for real estate since I was around the age of 18. I knew there was money involved in real estate and I always wanted to own property. I’ve always been someone who liked to take things and fix them up and make them look nice.Kristen (03:01)
Great.Derrick Seymour (03:01)
takesomething that don’t look nice and make it look nice. So that’s what attracted to me. And I was listening to Robert Kiyosaki and other moguls like that. And I started studying and just decided to dive in one property at a time.
Kristen (03:16)
Amazing.Yeah, exactly. That’s awesome. So talk about kind of when you actually took the jump. Did that feel scary or you felt like you were kind of prepared from some of your research?
Derrick Seymour (03:31)
So again, I got in around 2005. You know, that’s when we had the big market crash. So properties was really cheap. So I didn’t start like a lot of real estate investors with fixing flips or wholesales. I actually started purchasing rentals first because they were so cheap. know, I mean, I purchased the rental as cheap as $5,000. So yeah, I started off purchasing rentals and that’s how I kind of learned my way.Kristen (03:40)
Yeah.Wow.
Derrick Seymour (04:01)
hiring contractors and people to come fix the rental up. And once I got it fixed, then I started renting them out and it kind of went from there.Kristen (04:10)
Yeah, it’s really great to, mean the great part about real estate and know, flips and all of that is just the tangible aspect of it. As you said, you know, making something better. It’s just so gratifying because you’re seeing the progressDerrick Seymour (04:20)
huh. huh. ⁓ huh.Kristen (04:25)
So, know, hiring contractors is a really hard part of the job. Finding the right people to work with, knowing how, you know, probably set up your systems. How did you navigate that?Derrick Seymour (04:37)
Through trial and error, I’ve had some bad, I’ve had some bad contractors and I’ve had some good ones, but what I learned to do was start interviewing contractors, maybe even going out to some of the sites, you know, looking at their work, taking a look at their portfolio and kind of starting them off small and allowing them to grow to bigger things. But I like to start them off on smallprojects and see how they do with that first and being, you know, let them advance.
bigger projects based off of their performance.
Kristen (05:58)
Yeah, I think that’s a good way to go about it, like not jumping all in right away. ⁓ What are the metrics you use for success working with contractors? What are kind of red flags that you see that should alarm someone to get rid of somebody?Derrick Seymour (06:16)
⁓ So how they show up at the work sites, if they are coming every day, if they’re on time, if they’re showing up early, making sure they’re not late. Just making sure they’re doing their work, making sure they’re keeping in contact with you, letting you know, making sure they’re not asking for money all the time and not getting work done. So I like to split it up in different draws. So I usually do about three phases.with the money so I can make sure I’m not overpaying. And yeah, just keeping in contact with them and making sure they’re doing what they’re supposed to do. Because one of the big problems I’ve had in the past is contractors taking the job and moving on, taking too many jobs. And now they’re going slow with you because they got so many jobs. So they’re good at doing that. So you just monitor, make sure.
Kristen (06:53)
Yeah.Right.
Derrick Seymour (07:11)
you know, find out how much manpower they have and look for the contractors that’s looking to get in and get out and get to the next project.Kristen (07:20)
Yeah, absolutely. I do feel like there’s some people that really love getting jobs but not necessarily doing the job. So I think that that’s, it’s to kind of tiptoe around, like be very cautious on how you bring in people. And you, at this point, you probably have a really nice system in place where you continue to acquire more properties. Yeah.Derrick Seymour (07:26)
⁓ absolutely. Absolutely.Yes, absolutely. And I’m
constantly working to, you know, make that better. But I do have a system in place, but, you know, you’re always tweaking to make it better. I can fully back back all my time. That’s the goal.
Kristen (07:52)
Yeah, absolutely.Yeah, yes. And so you have a combination of fix and flips and buy and holds. I would love for you to talk about kind of the opportunity with both. What makes you, know, when do the numbers make sense for a buy and hold? When do they make sense for a fix and flip? How do you navigate that?
Derrick Seymour (08:13)
So I just base it off the deal. know, the deal tells me what I want to do with the property. My end goal is to build a portfolio of buy and hold properties just so I could have that, you know, large amount of passive residual income coming in monthly and the cash flow. And I look towards doing fix and flips when I’m looking to just earn capital gains and get…big lump sums of money. So a lot of times if the deal, if like I see a property and the taxes is high and it’s something I’m thinking I don’t want to hold, you know, due to the taxes or maybe it’s an area that I don’t want to have to go back and forth to, that may cause me to want to just get in and get out. But if it’s a nice area, I like the property, I think it’ll cashflow pretty good and the numbers.
look good and it’s a big enough spread between the mortgage and what I could charge for rent and that would tell me to hold the property. Also, depending on the the burn method, I don’t know if you’re familiar with the the buy, rehab, rent and what is It’s buy, renovate, rent and redo. So.
Kristen (09:17)
Yeah.Mm-hmm.
Derrick Seymour (09:35)
According to the numbers with that, you know, I’ll do that and just turn into a buy and hold also. So it’s all about the numbers. The numbers pretty much tell you everything. If it’s something that make more sense for you to sell and you will make more numbers selling it, then I’ll go that way. But if it’s a good deal and it looked like I could get some money back by refinancing, then I’ll go ahead and hold it.Kristen (09:42)
Yeah.Derrick Seymour (10:33)
Yeah, that’s what it is. Not redo, refinance. Right. Yeah.Kristen (10:33)
Yeah.Yeah, absolutely.
think that makes a lot of sense. you’re in Northwest Indiana and Chicago. Talk about those markets and what’s appealing to them, like about them and kind of what you’ve been able to do in those areas.
Derrick Seymour (10:52)
So again, Northwest Indiana is really good for the buy and hold method because of course the taxes are pretty low and you still find pretty good prices for the the homes, although they are rising because you know the Northwest Indiana market is becoming a pretty hard market. A hot market for everyone all over the United States. A lot of investors are coming out there to invest, but you know the numbers are pretty good, especially for buy and hold and you could.You could do flips out there also. Illinois is the same thing. know, ⁓ section 8 pays really well in Illinois if you find a good property and you can do good with the fixing flips in Illinois because the market, the numbers are still pretty high. A little bit you asked me as far as the market is taking a little longer to sell right now because we in a buyer’s market. But again, if you find the right deal, the right property.
There’s a there’s a good amount of money that could be made ⁓ using the fix and flip or a buy and hold, so you can kind of go both ways in both markets. But I look towards Northwest Indiana more for buy and hold market, but it just kind of depends where you where you at. But you can do both in both areas.
Kristen (12:11)
Yeah, absolutely. I think it’s, I mean, it’s a good point that also different markets have different strengths and have different, you know, the market is, cause I think a lot of people right now are talking about the state of the industry and the market and people are a little…Derrick Seymour (12:19)
Mm-hmm.Kristen (12:29)
cautious to enter it, but the reality is there’s so many pockets. I would love for you to talk about that in general. what do you see for the industry in general and what would you say to someone who’s a little bit cautious to enter the market right now?Derrick Seymour (12:33)
Mm-hmm.I would say just first educate yourself and education is the most important part. You’ve got to know what you’re doing and you always will be nervous with your first deal but you just kind of once you educate yourself you have to take the risk and get in. There’s no other way to get in. You got to take the risk.
Kristen (13:05)
Yeah.Derrick Seymour (13:05)
And as far as the market for the future, think I think the numbers will come down. You know, we we we’re in the part of the market where we pretty high up. So, you know, eventually the market will come down. So I think we’re getting to that point where where it will come down. So I think you just got to stay in and follow the trends and and do the research and and just play the game. Yeah, yeah.Kristen (13:32)
Yeah, absolutely. Yeah,I think getting into it’s never really a bad idea to get into real estate. You just have to be very thoughtful about it and be educated. And then you have the people on the other end who spend so much time educating themselves that they never actually do it and they don’t actually hop in. So there’s that side of it too.
Derrick Seymour (13:42)
Mm-hmm. Mm-hmm.Right, right. Right.
Absolutely, yeah, you know you definitely have those people that will educate they self to death, but the truth is if you never take action, you can have all the education in the world. It won’t do you no good, so you have to have education and you also have to take action.
Kristen (14:11)
Absolutely. Andyou know, I’d love for you to talk about when you were getting started kind of acquiring these properties. You know, I think someone might look at your portfolio and be very impressed by that and aspire to that. What have been some mistakes along the way that you’ve really learned from?
Derrick Seymour (14:30)
Well, some of the mistakes will happen when you run into numbers, doing miscalculations, course, ⁓ getting bad appraisals, you you expecting something to appraise for something to make the numbers work and then the appraisal come back different. Dealing with lenders and high interest rates and high rates. So those are some of the hiccups I’ve came across when I was expecting.a property to appraise for something and it didn’t and then you had to dispute the appraisal or maybe you didn’t want to dispute the appraisal.
High appraisal cost is another one of them. So that’s pretty much it. After that, ⁓ it’s just a numbers game, you know? But for the most part, that stems some of the hiccups that I’ve ran into.
Kristen (15:51)
Yeah.Yeah, and have you found that networking and maybe having a mentor, do you feel like that’s important to, you growing?
Derrick Seymour (16:08)
Absolutely,absolutely, very important. So I have ⁓ two or three people that I talk to and ⁓ we converse on a regular basis to make sure we up on the latest trends and things like that. Of course, my real estate community, Renatus and Nysia that I talked about earlier, we constantly.
meet up and having meetups and events to discuss the way the market and industry is going. So you have to stay on point and try to stay ahead of the trends if you want to be successful in this market. So absolutely.
Kristen (16:47)
Yeah.Yeah. And how did you kind of seek out those groups and opportunities?
Derrick Seymour (16:55)
Just going to different events and different seminars and webinars and after a while you start getting so many emails for so many different things and now with social network with these algorithms, once they know you’re interested in something, they gonna send you so much stuff. It’s really easy these days but back when I first joined the group, I was actually at a seminar and someone was there from theKristen (17:13)
Yeah, exactly.Derrick Seymour (17:25)
community and they just walked up to me and invited me out and I’m always open to opportunity. SoDerrick Seymour (17:32)
been involved ever since. Yeah.Kristen (17:35)
Yeah, I think that it’s an industry where collaboration is really important and learning from other people’s mistakes and kind of getting some guidance, it saves you a lot of money.Derrick Seymour (17:46)
yeah, yeah, definitely. I tell people all the time, a mentor can save you thousands of dollars in mistakes. Yeah.Kristen (17:51)
Yeah, absolutely.So I think you’ve given some good practical advice for people getting into this industry. To kind of wrap it up, what would be a piece of advice that you wish you learned earlier in your career that you can share with us today?
Derrick Seymour (18:09)
I wish I would have just started studying and educating myself on real estate earlier than I did and just taking action earlier than I did. actually started about age 25. I wish I would have started at the age of 18 and I would have been that much further ahead. Again, mentorship is the key though, see? It’s all about your influence and your mentorship. If you get the right mentorship at the right age, then you will start early.So I started off working nine to five jobs and I just told myself this is not the way. This is not the way to being financially free. I have to figure it out. And that’s when my itch for real estate came. So yeah, I worked it out.
Kristen (19:02)
I love that.That’s great advice. Yeah, so anyone kind of debating it, just do it. Partner with the right people and just do it.
Derrick Seymour (19:11)
Absolutely.Yeah. My first, my first fix and flip was a joint venture with, another lady who I’m currently still doing deals with. actually have a ⁓ joint company and, we just came to the point and we just said, you know, let’s just do it. Yeah.
Kristen (19:16)
Okay.Yeah, that’s
amazing, I didn’t hear that. So tell everybody where to find you and kind of how to reach you, how to work with you.
Derrick Seymour (19:37)
You can find me everywhere. You can find me at derrickseymour.com. That’s my website. You can find me on my company website at brilliantblocks.com. You also could find me on Facebook at those same names. I’m Instagram, tiktok. I’m all over the place. Just Google me. Look my name up. Yep. AndKristen (19:54)
Amazing. Yeah, amazing. That’s awesomeyou’re active on so many platforms.
Derrick Seymour (20:01)
Yes, and soon to come I’ll have a curriculum coming out to help people and guide people in real estate. ⁓ I’m preparing some classes. I’ll be doing some mentoring and coaching myself. And also I’m a licensed realtor as well, so my company, which is Brilliant Blocks, will be a one stop shop soon, sooner than later. It’ll be a one stop shop. It’ll be a brokerage. It’ll be a real estate investing company. It will teach and educate andKristen (20:14)
That’s important.Derrick Seymour (20:31)
Sooner than later, it’ll also be a lending company as well. So I’m working to be a one stop shop, that’s the goal.Kristen (20:35)
Wow, that’s amazing.Yeah, it’s really, it’s challenging to vertically integrate like that. That’s very impressive.
Derrick Seymour (20:45)
yeah, yeah, yeah, absolutely.Kristen (20:47)
Incredible. Well, Ireally encourage everyone to reach out to Derrick and, you know, take advantage of the resources that he’s providing and, you know, the coaching sounds amazing. So thank you so much for being here, Derrick.
Derrick Seymour (20:59)
Thank you. Thank you for the opportunity.Kristen (21:01)
Amazing, and thank you everybody for listening. Hope you learned a lot, got some inspiration for your own business, and we’ll see you back next time. Bye.
