Derek Horn, an explosive ordinance disposal expert in the Air Force, shares how he accidentally got into real estate investing by purchasing his first home. He grew his portfolio through a family deal, and eventually invested passively by partnering with a syndicator. Derek provides unique insights into considerations military members face when investing remotely, utilizing property managers, and thinking long-term about financial freedom.

Timestamps

[00:00] Introduction to Derek Horn's background

[07:35] Buying his first investment property by accident

[08:53] Growing his portfolio through a family deal

[13:15] Partnering with a syndicator for passive investing

[23:19] Dealing with evictions as a remote investor

[27:57] Managing property managers as a remote investor

[34:14] Hosting a group for military passive investors

Key Takeaways

• Derek started investing by accident when he purchased a home to remodel and rent out. This led to buying more properties in different locations during military moves.
• Partnering with family on a property deal allowed Derek to quickly scale up his portfolio. Family deals can provide opportunities not available on the open market.
• Investing remotely from overseas locations like Japan limits options for finding deals, leading Derek to partner with a syndicator for passive investing opportunities.
• As a remote investor, hiring property managers is helpful but does not make investing completely passive. Managing the managers is an ongoing task.
• Derek hosts a group for military members interested in passive investing. This provides invaluable networking and the ability to discuss military-specific investing considerations.

Resources & Social Media

• Active Duty Passive Income Group: https://www.facebook.com/ActiveDutyPassiveIncome

Follow Us on Social Media

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TikTok: @trulypassiveincome

Instagram: @truly_passive_income

Facebook: Truly Passive

Twitter: @trulypassive

Download Our FREE Passive Investor Toolkit

Everything you need to get started in passive investing

https://trulypassiveincome.com/toolkit/

Mentioned in this episode:

Sponsored by Nomad Capital

Looking to invest in self-storage? Nomad Capital converts vacant big-box retail spaces across the Southeast into climate-controlled storage, with a target of 20% annual returns. Our fund combines low leverage and high depreciation for strong growth and valuable tax benefits. By buying properties at deep discounts, we often achieve break-even at just 40% occupancy. Join a proven model in a resilient asset class that continues to deliver, even in today’s market. Learn more at nomadcapital.us/tpi. Accredited investors only.

In today's episode of truly passive income, we speak

with Derek Horn, an active military member who invests in real estate from

Japan, alongside his wife, Jennifer.

Derek shares, how he accidentally got into real estate investing by purchasing

and remodeling his first home, growing his portfolio through a family deal

and eventually investing passively by partnering with a syndicator.

He provides insights into unique considerations, military members face

when investing remotely, utilizing property managers and thinking

long-term about financial freedom.

Welcome to the Truly Passive Income Podcast.

I'm Neil.

And I'm Clint.

Today's guest on the Truly Passive Income Podcast is Derek Horn.

Derek and his wife Jennifer are active military, passive investors.

Uh, Derek, this is, today's episode is unique for quite a few reasons.

Number one, this is our first international episode.

Uh, Derek is, is coming to us today from Japan.

Uh, he is an explosive ordinance disposal expert in the Air Force.

Derek, how are you today?

Good, Clint.

How are you this morning?

I'm doing well, or should I say yesterday?

I think you're you're talking to me from 11 p.

m.

Last night while it's 10 a.

m.

The next day on my time

No, I think it's what what's the date today Derek

we we are still on the uh, the same date So it's the 17th here.

Um, and if this goes, uh about an hour or so, I will be in the future

So he's, he's, he's 13 hours ahead of us, Clint.

Got it.

I'm living in the past.

My mistake.

Typical.

Well, Derek, I appreciate you making time for us, especially.

I know you got a full schedule during the day.

Obviously it's nighttime for you.

You have family commitments as well.

So I want to make sure to tell you, thank you very much for being here.

I really appreciate that.

Thank you guys for the invite.

It's my pleasure.

Absolutely.

Tell us a little bit about yourself, your background, your first steps into

real estate a little bit about your military journey, and then your first

steps into passive real estate investing.

Sure.

So I am, hold on, I'm 37 years old now, been in the military 17 years this year.

Started investing kind of by accident.

Wife and I were renting houses everywhere that we had PCS'd.

Decided after living in Goldsboro, North Carolina, which I think is just down the

road from you guys That we wanted to buy a house So we we got with a realtor and we

picked out a an old house with character And it had some trees in the backyard

Turned out that our realtor was not very good The house had a lot of problems.

And so I did a lot of a lot of remodeling almost ended in a divorce because I

had pretty much destroyed the house and, uh, and then, uh, finished, uh,

finished all the remodeling that, that, you know, I could afford at the time.

And the wife was like, you know, this, this isn't really what I wanted.

So we bought another house in the area.

Rented that first house out.

Um, and that was about seven, seven years ago, I think.

and then from that point, we talked to her mom, um, Jennifer's mom who had a couple

of rentals from when she had, um, been, been managing properties years ago, but

she didn't want to deal with them anymore.

Her property managers weren't very good.

And so we worked out a deal to basically buy her out of her

two properties that she had.

so we went from one door to, to three.

Kind of overnight, it was a family deal.

So we got a nice sweet deal on that.

And then from there we just kind of continued it.

We moved, uh, we moved to Texas, we bought some more properties, and yeah,

and then, uh, got introduced to you on, on Facebook and, uh, worked out pretty

well because I was about to head to Japan where, uh, we're quite limited

in what we can and can't do over here just because of the time difference.

Um, it allowed me to, to get a little more passive and not have to,

not have to search for deals every day on, on MLSs and brokers and

Facebook forums and everything else.

Gotcha.

Yeah.

So you really did get into it pretty much by accident, by necessity of

needing another house for yourself.

Yes, sir.

How, how has that experience been?

You know, are you actively managing your own property still?

Do you have property managers?

So we have a property managers.

We have Two property managers in Georgia, and then we have

a property manager in Texas.

mainly, we've, the wife and I have gone back and forth us

managing the property or not.

And unfortunately, what it comes down to right now for us is I don't

want to be receiving phone calls from tenants at two o'clock in the morning.

Derek, how many units are you up to now?

Right now we have, seven properties and

I think it's 12 doors total.

And that's spread across North Carolina, Texas, and Georgia?

Uh, just Georgia and Texas.

So we sold the properties in North Carolina last year.

And so we sold one last year and then one, I think, the beginning of this year.

we just got really lucky with those that gave us some capital to

buy a, uh, quadplex and Savannah.

and that has more than made up for, for what we were making

with those two properties.

Savannah's an amazing area.

when did you buy the one in Savannah?

Oh, we closed on that one, when did we close?

I want to say 2019 or 2020.

I'd have to go back and look.

but we got, we got so lucky, honestly, with that one, was a, was a owner that,

didn't necessarily know what he had.

Um, he was a firefighter that just didn't have time to manage his properties.

Didn't, it, it wasn't really well run.

He had a poor property manager that was, they just weren't seeing eye to eye.

And he was basically fed up for it, fed up with it.

and we scored, I mean, we scored a quadplex.

it's about a mile from the base in Savannah.

rents out now for about $1,400 a unit, and we paid $385,000 for it.

Excellent.

Good for you.

That's fantastic.

That's really almost 2% rule there.

I've seen I've seen the same story play out quite a bit.

A lot of times, especially with active military guys that as you move around,

they're kind of collecting properties in different places, depending on

where you've been stationed or, and you guys have access to some

really good financing as well.

So you, you buy a property and then kind of move on to another area and a lot

of times keep those properties before.

and then we also see the other side of this that happens in civilian

life is where people start picking up single family homes and then

realize the margins of multifamily.

And a lot of times get into, you know, the duplexes, triplexes, quadplexes,

and a lot of times that eventually leads to a small apartment building

and eventually into bigger projects and things like that, especially when you

understand the power that comes with, the increase in ratio between number of,

Rental units and sets of fixed overhead versus like one property that can have

one mortgage, one set of taxes, one city utilities, but it's a quadplex and

it's got four units bringing capital in.

And if one or two of them are vacant, it's not the end of the world.

Creates a lot of stability there.

So we've seen that over time and that natural progression.

Usually continues on, especially with people that are good at it,

which I know you and Jennifer are.

Eventually, those people start making a transition, a lot of

times, from being active investors to being more passive investors.

And I'm curious to know where you stand on that and what your opinion

on things is because, because of your deployment, you were really Pushed

into a passive investing strategy.

So from the, the deals that you've done with Nomad Capital and the Self Storage

Syndication, Has that shaped it all the way that, that you guys invested?

How you felt about those?

Did those fit in well with, with what your timeline is?

And, and um, you know, What was that like with your experience

that really came out of necessity?

Honestly, we, we stumbled upon Nomad, completely by accident.

I don't, I don't remember if I ever, ever told you the story.

But I've got bigger, bigger pockets.

Facebook group is on, on my Facebook page.

I was scrolling through and I saw I think you had done a story or, or typed

up a, a post about, uh, I think it was a Kmart that you guys had converted.

And I, I'd reached out to a couple of other I guess syndicators.

I think that's, I don't know if that'd be the right word or whatnot.

In the past, trying to learn it, understand you know, all the terms and

whatnot with regards to syndication and being a limited partner.

And had kind of just got my feet wet when, when I stumbled upon that post.

And honestly, y'all's business plan with you know, buying old warehouses

and turning them into Climate controlled self storage just made sense.

It also happened to line up really well with us because I had at the

time a fair amount of money sitting in the bank and I couldn't, I couldn't

find deals fast enough to, to get the capital and utilize it effectively.

So I was just, I was sitting on a whole bunch of cash that

we needed to do something with.

And at the time we were pretty much relegated to utilizing

the MLS with our agent.

Again, we've never been local to any of our properties.

That we've that we currently have, so it was, it was all word of mouth to

find our team, MLS listings, or, you know, whatever we were able to be given

through, through our network, and the timing just lined up for everything, to

be honest with you and then we had the conversation, I think I was actually,

uh, It was about this time last year, I think, is when we, when we first talked.

I was actually in Korea on a, uh, on another TDY doing, uh,

doing an exercise out there.

And, uh, that was the first time we had a conversation.

And honestly, you guys, you just impressed me with what you guys What

you guys were doing, it made sense financially on our side of the house.

And obviously that gave us, gave us a bit of diversity with, uh, both

where we were investing and asset class while also getting us passive.

I mean, I, um, I, it seemed like it's like a triple win, I guess, for us.

I, I'm just thankful that we were, we were able.

To do it at that time and that we had the, the means to, to make that

happen, but it just, it just made sense.

Let me ask you this.

A lot of times we talk about the importance of diversifying and you, and

you brought up several levels across asset class, across geography, across

operators and individual managers.

But also across time and time is something you brought up a couple

of times, which I think is from my experience with the active military

investors that we have, that comes up a lot because you guys have all, you're

in a line of work where you think about your career and what's coming up next.

You've been doing this for 17 years, you've got, you know, option for.

Retirement coming up around the corner sounds like.

I don't know what your plans are there.

I'd love to hear about them if you're willing to share.

But you guys, a lot of times because of your deployments and things like

that, you don't think about things in terms of months or one or two

years like a lot of younger investors that are just getting started do.

You guys are typically more seasoned.

You've got high character.

You're put in high pressure situations.

And you think on a bigger scale.

I think a lot of that just comes with the territory of being trained that way.

And you guys typically think in years and chunks of time.

So when we talk to someone like you of, Hey, this is a,

this is a five year project.

Um, or it's a five year hold, refinance, double your money in five years, but

a 10 year project, each project is going to be a little bit different.

But that doesn't seem to ruffle any feathers at all when we

talk to the military guys.

So, in terms of looking at your timeline, and now you really are

diversified across asset class, geography, operator, and time.

What is the rest of your career look like?

What is your investing career look like?

And, uh, you know, how is this, is passive investing something that's going

to have a place in that from now on?

Or are you using this as a way to get capital that you can invest actively?

Those are, those are really awesome questions to be honest with you.

And, and you're right a lot of military individuals, we, I

mean, the magic number is 20.

Right for, for military 20, 20 years in the military and you can retire.

That's known to anybody that's coming in the military.

That's an upfront number.

So I think just, just having that knowledge up front automatically makes

people think further down the road.

Um, especially when you start getting over that, that 10 year mark.

A lot of guys will have, will sit down and have that discussion kind of

with themselves or their families or wives or whoever's important to them.

And that's kind of the tipping point, right?

If you've been over 10 years.

Then it's okay.

Well, I've done 10 years.

Let's do 10 more and get those benefits.

But because of that, it puts you in that mindset to, to, to think that long term.

But I think one of the other reasons that, that, that's a, I guess, a unique

feature of, I guess people in the military is, we have a relatively stable job.

I mean, short of somebody shooting us or, or anything that might happen

with regards to combat, the, the job itself is relatively stable.

Um, which you don't necessarily get that a lot from, from

the private sector right now.

The only time that I've ever worried about a paycheck.

Honestly is, um, when Congress can't do budget and decide that they

want to pay us and we might have to wait for a paycheck for a couple of

weeks at the beginning of the year.

But short of that, I've known, hey, on the 1st and the 15th,

I'm going to get this paycheck.

I know I've got medical care.

I know I've got a house over my head.

I know my wife's taken care of.

I know my family's taken care of.

So, I think those things tied together makes it very easy to, to think long

term, to, to, to make those plans like, hey, what am I going to do after this?

What, what am I going to do, you know, 15 years down the road possibly?

And like I mentioned earlier we, we got introduced to each other

last year, which put me just about four years from retirement.

And the first deal that we did together happened to be a I

think it was a five year return.

Which lines up, lined up perfectly almost with retirement, right?

So that gives me a year to, to get back, maybe rent a house figure out what I'm

going to do with regards to, you know, either job or, or investing, or if I

want to start a business or whatnot, get those tax returns if I need them,

get proof of income and stuff like that.

And then I've got my return coming in and hey...

Hey, babe, let's go, let's go buy that house that we've wanted to buy, you

know, we've been planning for the 10 years, you know, let's go, let's go

have that life that, you know, we want to have because I made that choice with

you a year ago and the, the freedom that you get from also having the

20 year retirement on top of that.

Allows us to kind of take those risks as well.

So, did that answer everything for you?

Yeah, just, I understand how the timeline kind of lines up with

With where you're at five years from now, I guess the question is, um, six years

from now, you know, like you said, what is your, what does your life look like?

Are you, are you full time active investing or has this shaped at

all your strategy having you're one of few investors out there

at a young age that have active investments and passive investments?

Typically what we see is, the way I stumbled into self storage specifically

is because I was looking around realizing that all of my assets are

on one island that at one point got hit by four hurricanes in three years.

I had 14 Airbnb properties and a business that managed another 75 listings, and

I realized it could all get shut down and taken away from me very quickly.

So, I was pushed into that position mainly because my own, I was too

narrow minded in my investment strategy, but I found out what worked

and what worked for me really well.

I was willing to take that increased risk for a short period of time.

Hoping to generate enough capital that I can invest someplace else.

And when it was time to invest that capital someplace else, what I

did is I looked around and I said, Okay, who are the older, successful

real estate guys that I look up to?

That are doing it right, that aren't working very hard, and

and they can do what they want to do and go where they want to go.

And ultimately it came down to three strategies.

And it was self storage, mobile homes, And hard money lending and note lending.

Like guys that were lending money to house flippers and things like that.

I didn't have capital to lend to anybody.

And I had no interest in getting into mobile home parks.

And so that left self storage and I understand the power of multifamily

and there's a lot of overlap there with self storage except that

the expense ratio is a lot less.

So you, one person can manage 500 units.

You can't do that with apartments.

So that is kind of why I started focusing on that strategy as a young.

You're ish guy because I was forced to because of the high

risk that I had put myself in from the other side of my portfolio.

And you are doing this because you got pushed into this at a young age

because of the geography of where you're living right now, right?

Then the reality of being across the world and not being able to actively invest.

So I guess when you get back six years from now, you know, 10 years from now.

What does that look like?

Is investing something that's always going to be important to you and Jennifer?

Or not.

And if so, you know, is passive investing something that you feel like fits in

well with you or with other military people, or do you feel like it's worth it

for y'all to go out there and test your mettle and do the best you can to build

something actively and then maybe make that transition back later on in life?

Gotcha.

So, honestly, a combination of active and passing, basically what

we're doing now and expanding is...

Is where I foresee myself and Jennifer going once I'm, I'm able to retire

I don't want to, I don't want to get rid of what we have cause it, it's

kind of like a nice solid base for us and I'll have a retirement check.

You know, that'll, that'll pay the bills, take care of

whatever we need to take care of.

And honestly, the investing that we're doing right now, both with you and then

on the active side with, with our own units is, is basically a second retirement

check which also resonated very well when, when you and I spoke and you kind

of, Gave me the background on why you guys chose Nomad Capital as your name.

So I used to joke with people, and this was before I even

invested, so we're talking.

10, 15 years ago, and guys like, Hey, what are you going to do when you retire?

And my response was, was always the same.

I'm never going to wear pants again in my life.

And they looked at me, they looked at me like, what are

you, what are you talking about?

You're crazy, right?

And I gave them a little bit of, little bit of a backstory.

And basically what it came down to is, so we're going to retire in a place

called Fernandina Beach, Florida.

I don't know if you're familiar with it or not, but my dad's family

is pretty much all from there.

And there's this bar down there that's right at the end of one of the main roads.

There's a, there's a, uh, traffic circle right there.

And then it, it opens up directly to the beach and it's a two star,

two story bar slash restaurant.

And I'm like, I'm going to be a bartender.

I'm going to wear flip flops and shorts and work on the bar and collect a, collect

a retirement check from the government.

And.

That's gonna, that's where I'm going to be.

Well, then I had a family and I had a kid, right.

And I want to be able to travel and see things and do things with them.

And, and, you know, if the kid wants to go to Disney world or, or we want to go

to, to Italy and see the wife's family or.

Or go down to the Virgin Islands and sit on a boat for three weeks.

I want that freedom for them.

So for us, the investing, both the passive and active was the means to

the ends to, to get us to that point.

So while I want to continue investing and expand on this I do think.

It'll be more towards the passive side and if we are doing more hands

on stuff, it'll be like, we'll probably have property managers.

And, and people that can run it so that, you know, Hey, I want to go,

you know, I'm gone for three weeks, you know, unless the world is on fire.

Don't, don't reach out to me.

And the freedom of knowing that I'm making a paycheck while I'm sleeping and I'm

doing nothing more than realistically sending emails is, is amazing, honestly.

So I'm not super sure as far as.

You know, a direct or direct plan on, on what it's going to look like, you know,

in, in three and a half years now, I guess, two and a half years when I come

back to the States and, uh, and hang up my, my uniform but I, I do expect

it'll be more of a mix or, or more, sorry a mix of both active and passive.

And just expanding, reinvesting the, the, uh, returns that we're receiving

from, from you guys, maybe trying to, to change some of our single

family residents into multi families and just, and just go from there.

So you've got seven properties, 12 doors in Georgia and Texas,

all handled by a, a property manager.

But in my experience, I've got some single family rentals and they're handled by

a property manager, but there's still, there's still some work involved for me.

And it usually involves, you know, my biggest headache I would

say right now is dealing with the, the insurance every year.

And, and a little bit with the taxes and then occasionally with the, you

know, sort of getting on the property manager to Managing the property

manager, I'd say that, and then dealing with the occasional evictions.

Have you had, across those 12 doors, have you had any

evictions at any point in time?

Or have you just been extraordinarily fortunate?

Uh, no, actually, I've had, uh, two evictions on the same

unit within the last six months.

So actually we just we just evicted, um, one of our guys or

one of our tenants last Wednesday.

Prior to that, the unit was vacant for five months.

We ended up firing the property manager, um, that was managing it for that.

And the tenant that was in there beforehand, we evicted as well.

So I, I feel like I've been relatively lucky.

Even, even though I, you know, I just highlighted probably a

pretty negative, uh, recent.

But overall, I, I think we've been, you know, lucky with our tenants, lucky with

our property managers for the most part.

But I was kind of laughing when you, when you talked about having to kind

of manage the property managers.

Cause when I talked to, um, so I actually host a 80 PI group over here.

So 80 PI is a active duty, passive income.

If you want me to go into that a little bit later, I will.

But when I talk to the guys about managing property and owning real

estate and the topic of a property manager comes with like, Oh,

yeah, I'll get a property manager.

They'll handle it.

You know, they'll just send me a you know, my tax forms at the end of the year.

I'll get my statements.

I'll get a check.

I'll be good to go.

I was like, yes, but it never works out that way.

I've, I've had property managers that have paid me the wrong amounts.

And the only reason that they caught it is because I looked at my statement

was like, You took out, you know, 1, 000 extra for some reason this year.

I've had 1099s that show the completely incorrect rent income for the year

because they're, they're calculating something incorrectly and I've had to

call them back and get corrected 1099s.

The, the property manager that we ended up firing towards the end of last year,

When we had the vacant unit, we reached out to her and we're like, Hey, why is

this thing, why is this thing vacant?

You know, we were following up.

And, you know, we took a look at the pictures.

We were actually in Italy when we listed the unit and we'd had

nothing but nothing but good things so far from that property manager.

So we just, Hey, we need to get the place rented out.

Can you guys take care of it?

And we came back and it had been about, 75 or 80 days, I

think it was, and I followed up.

I was like, Hey, what's going on with this thing?

Like, why is this thing not rented?

Took a look at the pictures and it looked like somebody had taken a

picture with like an iPhone one.

And I was like, no wonder you guys aren't getting this thing rented.

This, this, this is horrendous.

And.

And you guys are realtors as well?

Like, how do you, how do you not know that in this day and age, everything is

driven by that first, you know, visual of, of whatever it is that you're, you're

trying to get rented and you're trying to sell, you know, anything, right?

And I was like, Hey, y'all have got to get over there and redo these pictures.

And so to, to, to, to answer your question is as nice as it is to have property

managers to where I'm not taking those maintenance phone calls at, you know,

two, three o'clock in the morning my time.

We are still having to, you know, stay up sometimes still 11 o'clock at night, get

up early, five o'clock in the morning.

To call the property managers and follow up, you know, Hey,

did this AC get replaced?

Hey, is this, why is this unit not getting rented out?

Hey, why didn't, you know, you guys lower the rent after, uh, you know, 10

days on the market and no, no action?

We try to handle most of that through email for, for obvious reasons.

But it is not, it is not as hands off as I would, Prefer it to be but I don't know

that it would I don't know if you could get it super hands off Unless you just

had a really really good property manager and you guys were were in sync and, you

know, they knew what to expect from you and you guys have worked together and

the big thing that I had learned is or that we have learned over these years is

communication is huge so finding somebody that communicates in the same manner that

you want to be communicated Is vital.

And if you can find that, I think you can get probably as hands off as you're ever

going to get, unless you transition to just completely passive investing, but

it's still making phone calls and emails.

I can certainly speak to life experiences that have been negative

with different property managers.

The way that that typically works is if you're lucky enough to find a great

property manager that does a really good job managing your properties, the problem

that I've run into in the few times that I've found that is that it usually

doesn't stay that way for very long.

And there's a couple of different reasons.

A lot of times I started off with my Investing career started off with nine

single family homes, uh, and they weren't Section 8, but they weren't much better.

And I had property managers taking care of those.

And I started off being very quick to hire because, Oh, I sounded exactly like the

guys you're talking to in your ADPI group.

I was like, Oh, I'll just hire a property manager.

This is going to be easy.

That's what they do.

The reality is they're very lackluster.

A lot of times the ones that are really good If they're just starting out

and they're really good and they're hungry and they start out and they're

amazing, but if they're really good, usually one of two things happen.

They get really busy because they're really good and people spread the word

and they take on a lot of properties.

And then they either get really good and start making decent money and

start buying their own properties and their own properties start taking

precedent over your properties.

Or they're really good so they get really busy and they start

getting really, really burned out.

And it's a, it's a job that's very difficult.

To scale, and if they don't handle the ability to scale very well, then a lot

of times they get burned out, run down, and you start getting subpar management

again, I started off personally being very quick to hire and slow to fire

and trying to be very forgiving and understanding with people because

I was like, I don't want to do it.

The reality is I had to switch and become.

Very slow to hire and quick to fire.

In fact, as we made the jump from long term property management or

long term investments into short term, when we moved to the beach and

started buying Airbnb properties, we reached out to multiple properties.

After we built a small portfolio, my idea was to hand them off to

somebody and yeah, give up some money, but let them take care of it.

We could not find anybody to run them the way that they needed to be run.

And the only way for us to make it a quote unquote passive investment.

We had to build a company and it took about two years to build out a

property management company to make sure that it was done the right way.

And I can tell you this, brother, there ain't nothing passive about that.

Now, at this point in time, people look at it and they say, Oh, well, that's,

that's a passive investment because Clint doesn't have to do anything anymore.

The company operates and he's got operating partners.

But the reality is that's not passive income.

It's residual income.

from a lot of work that was front loaded and put in and unfortunately

with long term investments, especially single family homes, there's

always going to be that struggle.

It's, you know, people call it passive income and I would

argue that it's, it's not.

If you have a great property manager and they're taking really, really good

care of it for a period of time of your life, when everything is going right.

It can feel or look passive.

The reality is you did a lot of the work upfront of choosing the right

person, establishing the communication pathway that you talked about, and so

it's residual, but again, with single families, that's easy come, easy go.

Once you get into multifamily properties, the most passive that

also comes with a higher level of risk and exposure is multifamily Apartment

complexes above about 50 to 60 units.

Because that is when you get enough units so you can afford

to have an on site manager.

If you're 20, 30 units, it's usually too small to have someone on site managing it.

So you still have to have, have to have a property manager doing that.

And you're dealing with the same thing we're talking about right

now, just on a little bit larger scale and a few more headaches.

Once you get into the larger asset classes, then you typically can afford

to put a property manager on site.

And that can make it a little bit easier, but even then, you're always

going to be managing the managers.

And that's why, for me, the move into syndication was easier

because it's a partnership, right?

The people doing the operation are not managers that you're hiring,

they're partners in the deal.

And everybody's return, everybody's got skin in the game.

But at the end of the day, yeah, those investments that you have, the idea is

to have them look and feel as passive as you possibly can, but one way or the

other, you're going to have to manage the managers and stay on top of that.

And, you know, we talk about, Neil talks about a lot of times that your capital,

your money is a store of life energy.

Uh, like you spent time away from your family and in your situation in different

countries, investing your life into dealing with explosive ordinance and

things like that to build up this capital, to be able to invest it into something.

And when you think about it that way, like the money, life is not

about money and money can't buy happiness, but you do have to have it.

And it does provide a certain level of freedom.

And whether you're Making some or losing some, if you think about it

in terms of life energy that you spend a lot of time and effort away

from your loved ones to get, it gives it a little bit more of importance.

And I think that that's something that your property manager is not going to be

thinking about that when they're making or losing you a couple hundred dollars

or a couple thousand dollars a year.

So with that, I'm really glad that your guys...

In your investment group have the opportunity to hear you say things

like that, because that's, that's a negative aspect of investing that not

everybody, people gloss over that, right?

But you, you've lived that and you've had some of those struggles.

I do want to circle back if, if you're willing to talk about it, tell

us about the, the ADPI group, the Active Duty Passive Investor group.

I know there's multiple groups, there's Asia Pacific and a couple

of different groups out there.

Tell us a little bit about that and what you do.

Sure, uh, so ADPI, Active Duty Passive Income realistically

they're global at this point, just because the military is global I am

a host up here at Masawa Air Force Base, but in addition to that I partner

with other hosts in the Pacific area.

So the Asia Pacific group that you mentioned we actually do we meet up, we

have a a Facebook messenger group that we, we discuss stuff offline as, as the host,

and then we also put on events as well.

I'm actually the.

The host for those.

So actually we're hosting one or I'm hosting one this Saturday where we have

one of the other hosts where she, she has purchased, I think, eight properties

while she's been stationed overseas.

So the entire topic of, of this, this week's, this, this quarters event is

how to purchase property while stationed overseas whether that's, you know, having

to stay up and make those, you know, midnight phone calls, having to fly back

to the States to handle the, you know, the big decisions that, You have to be

in person for even things as simple as where do I go to get a contract notarized?

Seems very simple when you're in the States and you can go to,

you know, anywhere, pretty much.

Have, have Grandma Sue from the neighborhood down the road come down who's

a notary and take care of everything for you or mobile notaries or anything else.

But how do you get a notary when you're not even in the States?

That's recognized in the States.

So she's discussing kind of those trials and tribulations on you know, how

to, how to, how to work through those those roadblocks that she's ran into

and, and how to keep progressing you know, while being stationed overseas.

And that's just the event that we're doing.

Like I said, this quarter I've hosted three other ones.

Uh, we started about this time last year, actually, and we did

kind of a three part series.

Where we, we've hosted a event every quarter and it's how to, I think we

did a, how to analyze a property.

We did a, how to protect a property.

So insurance, LLCs, um, and then we did a, another topic on financing

properties, like how, what, what the types of financing are, who's,

who you can go through and whatnot.

So it's been the thing that I've learned and I didn't know this when

I first started investing in and even when I'd been investing for, for five.

For six years, I don't necessarily think it clicked.

The amazing thing about ADPI is the networking, right?

To some of the guys at work that, you know, just want to get started investing.

I'm the person they look up to, right?

But for me, I'm over here, like, okay, cool.

I've got a couple of houses.

I've, I've invested some money with, with Nomad.

You know, I'm, I'm okay, but there's somebody down the road that's,

you know, got a million dollar portfolio, 2 million, 3 million.

You know, they're doing 50 unit apartment complexes, whatever it may be.

And being able to get in the same room with those individuals so freely and

having the commonality of, hey, we're.

We either are or are, were all military which also allows us to

discuss some of the uniqueness that you run into with military investing.

So one of the things that typically comes up is, um, so capital gains.

exclusion rule for a primary residence, right?

So, but there's special rules for the military where we can extend that.

There's special rules that we don't have to stay in our primary residence

for two years, two out of five.

So last year, I claimed two primary residence where I only stayed in one

of them for six months, but I was able to fully write off all of the capital

gains because, you know, I'm military.

I was, I was required to move, but those types of things aren't

necessarily common, you know, amongst just normal investors because.

You know, the military in the US, the military represents, you know,

less than 1% of the population.

And then you think how many of those people are active investors

and you're talking probably less than half a percent of the entire

population, probably well under that.

So to have a group that you can, you can ask.

Military specific questions while they're also trying to, you know, build you up

and further you and, and get you that networking piece is, is invaluable,

quite frankly it got me, it got me out of my shell a little bit as well.

I've never really hosted anything on Zoom, so I got the opportunity to do

that, and, you know, that opened some doors for me as well, so, yeah, it's

been awesome, to be honest with you.

Derek that, that specifically resonates with me.

The power of networking is, you know, we host a meet up here and I've

always tried to, I think that's how we connected is post about what we're

doing and, and how we're doing it is because everybody knows something I

don't, and that networking is usually.

The most powerful you run into at any kind of real estate meetup or

workshop or anything like that.

It's the conversations in the hallways that mean more than anything.

So I'm sure those guys appreciate having someone like you to

answer those questions for them.

I didn't know that about the primary residence rule.

So, so that's very interesting.

I, I commend you for doing that.

I hope you keep doing it.

I'd love to continue watching your journey for now.

We're up against it.

So I think we're going to end there.

I know it's late, late at night for you in Japan.

So I want to say, Derek first of all, thank you very much for.

Taking the time and secondly, for your trust in the Nomad team

and investing passively into some of our syndication deals.

Look forward to continue watching your journey and, uh,

thank you for your service.

Clint and Neil, thank you for your, uh, time and having

me on your, uh, on your podcast.

Thank you so much for listening and watching the

truly passive income podcast.

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