Introducing Devin Sheehan, an Apprentice who has become a Freedom Mentor. In this enlightening interview, you'll discover his story, his success as a real estate agent while also being a world class creative real estate investor, the interesting way he found Freedom Mentor and then we'll dive deep into the subject of making money while you sleep with trophy rental properties. You're going to love this interview:
Successful Real Estate Agent
Phil: Devin, we have so much to dive into so let’s get started. Quickly, from the beginning, how did you find real estate?
Devin: I knew from a young age that real estate was something I wanted to do. I read books and watched YouTube videos on it. I was working in the restaurant industry over a decade ago, and I always liked being around people; I was a very social type of person. A gentleman who would always come into the restaurant said, “You know what? You would be good at real estate.” So long story short, that's how I got into it on the agency side.
Phil: So you start off as a real estate agent, you achieve success there, and then you start looking into becoming an investor. Why jump to that side?
Devin: Well, as an agent I knew that when I stopped working, when I stopped following up with my clients, that eventually my business would begin to taper off. And I wanted to build an income that paid me even when I was not working, that would give me more control over that. As an agent, you can make a great income, hundreds of thousands of dollars a year, even in the seven figures. So the income as you build an agency business is excellent. However, I knew at one point I wanted to get off that treadmill and move into a long-term passive income approach.
Phil: Right. And so you start looking to learn more. How did you find Freedom Mentor?
Devin: So what's interesting is I stumbled across the mentor that mentored you in real estate. He was doing a deal in my local town, and he had asked me for my opinion because he had heard that based on my experience that I would be a good resource. So he wanted to know, should I condoize the units that I bought? Should I keep it multifamily? Should I turn it into single family? And he ended up introducing us to Freedom Mentor because I saw his lifestyle. I was like, man, how is this guy able to travel whenever he wants, wherever he wants and work from anywhere in the world? And I began to ask questions and ultimately that's how he led me to you.
Phil: So you found Freedom Mentor from my mentor by seeing his lifestyle. Obviously one big part of Freedom Mentor is teaching people how to create money through creative real estate investing and flipping houses. And that's a little bit different from building money while you sleep from rental property. But tell us where did that fit into your entire business strategy and plan to do creative real estate and flipping houses?
Successful Creative Real Estate Investor
Devin: Well, one, I knew I could create a lot more velocity per deal. I was able to make a lot more income by structuring creative financing deals, finding distressed properties, and fixing them up. And I maintained my license because who better to sell it than myself? That's how I felt about it. I was already doing it for my clients. So by adding that skillset to my tool belt, I was able to create a lot more income in addition to my agency role with clients.
Phil: So in other words, being able to add more fuel to the fire of building long-term wealth?
Devin: Yeah, absolutely. And I was in control of my time because I control my time a lot better.
Phil: So as a creative real estate investor, there is a lot more control there. You're not necessarily at the beck and call of a client, although there's still plenty of active work involved; you need to meet with sellers and structure the deal. So there's still plenty of active work and you mentioned about the fact that they work in tandem. Tell us a little bit more of why even to this day you maintain a successful agency practice, while being a creative real estate investor.
Devin: In the market that I'm in the price points are significantly higher. Which means I can be more selective with the clients that I work with. Plus, I've been in the business for a fair amount of time so my clientele, my referrals, and my relationships are constantly building on top of one another. I mean, you develop the skillset, you're just wearing different hats. So it made sense to keep continuing to hold my license and work with clients that are buying larger scale properties on the retail side and when there's opportunities with distressed properties or options for creative financing, I wear the investor hat. Both work and compliment one another.
Rental Property Opportunities in Today's Market
Phil: Let's shift now to that wonderful topic of acquiring trophy rental properties. Warren Buffett said, "If you don’t find a way to make money while you sleep, you will work until you die." So tell us, where do you see the best opportunities in owning trophy rental property, right now?
Multifamily vs Single Family Rentals
Devin: I'm bullish on multifamily because people need a roof over their head regardless of how bad the economic situation gets.
Phil: An example I suppose, would be what we're currently seeing with WeWork filing bankruptcy. They provide flex office space, but it turns out people don't really need flex office space, instead what you're saying is that they need a roof over their head. Tell us a little bit more about the different opportunities that you see within that category of providing housing. What about single family homes versus, you had mentioned, multifamily?
Devin: When you look at single family rentals and what happened in Covid, a lot of single family investors were in trouble when their tenants stopped paying. Whereas owning multiple units in one location begins to offset your risk. I mean, you think about Airbnb, right? I've owned a couple of them too as well, and you can have a profitable Airbnb that gets shut down because the laws are changing. I would much rather invest in something that's zoned for what its intended use is because I know they're not going to come after a multiunit. And in addition, even ADU units, those are great additional spaces that you can have on your property to begin to offset your cost of living. So very bullish on places that people need to live.
Phil: And you brought up a great example with Airbnb. It happened in your local market or at least one of your properties where they just shut them all down. And you mentioned this idea of their intended use. That's such a big deal because so often we see where people, they don't have the right help and they'll buy a triplex only to discover it's zoned for two units. Yeah, you bring up a great point, but getting back to this housing. So why is housing so important right now?
Devin: Well, it's extremely important because it's not only a necessity, but because of our current environment. When you look at people coming out of college and young people, with the debt that they have, it's very difficult for them to just buy and get ahead. I can't tell you how many buyers are saying that they're going to wait on the sidelines. They're going to wait for rates come down and what do they need to do in the meantime? They need to rent.
Phil: Yeah, it's such a great point. I've read statistics that there will be less homeowners’ percentage wise in the next generation than in any previous generation in American history. You're right, people are going to rent the rest of their lives and they need a place to rent. I have also seen where there's just a complete lack of inventory in anything that basically fits into the category of duplexes, triplexes quads, five units, 10 units, there's very few of them. In fact, I can't remember the last time I drove past anyone building smaller multifamily properties. They're only building large class A properties. And I just love what you're sharing there.
Devin: Yeah, it’s a great opportunity, especially if you're building long-term wealth, to focus on asset classes that people need to live in.
Short Term Rentals Decline
Phil: You mentioned Airbnb's or short-term vacation rentals. Where do you see that in the next 1-5 years?
Devin: I really see Airbnb declining. There will be specific markets and certain locations within those markets, whether it's a lottery system, whether it's commercially zoned and it's approved. I mean, it will exist, but they will restrict licensing and it will decline. Also, it's hard to scale that business and it’s a very active business. You need to be consistent and your reviews matter. There’s a lot of maintenance: you need to make sure the couch is not broken, the beds aren't broken, and that they didn't put a hole in the tv. It's not as passive as getting into multiple rental units and building wealth in that fashion.
Phil: What great points, and I think so many that are watching this either already own Airbnb’s and agree with what you are saying, or they don't want to hear it. But it's so true. The level of management, even when you hire management, is so much higher. For example, I just got a message from one of my management companies, that we need updated pictures. There's always a new decision, but I bought those at the perfect time. I'm cash flowing like a freight train and I'm happy with them. However, I'm exactly where you're at and that is providing affordable housing. That is where you're going to get the greatest freedom. And again, that is what we've been talking about here. It's not just about owning trophy rental properties, but how do you set it and forget it? And there's just such less you're dealing with.
Accessory Dwelling Units (ADUs)
Phil: So we talked about multifamily, and then we touched on this idea of Additional Dwelling Units (ADUs). Tell us a little bit more about why that's an opportunity as well.
Devin: Well, I think right now in my marketplace and across the country, towns are much more lenient on allowing these to be established. And what a great way to offset your cost of living. I mean, your cost of living, being a mortgage, is usually one of the biggest costs that families have, and it is a liability. So by reducing your cost of living, that's what allows you to excel and get ahead.
Phil: And you bring it from the perspective of the person that owns a home, that's their primary residence. Why not add an ADU if you can? If you're in one of those cities where they're pushing for it, it can help offset costs. But adding another unit is also a benefit to investors that have a single-family rental. And I love your point. While Airbnb’s are being shut down by the thousands, cities are begging for more units and they're allowing for ADUs. So even the law is supporting the push toward investors providing more housing. That's a great call.
Off Market Deals
Phil: So this all sounds great, but when the rubber meets the road Devin, it's still difficult to find a cash flowing duplex or eight unit or six unit. What are some of the fundamentals to being able to do trophy rental property deals and not get into deals that are lousy where you end up frustrated and three years later, you're getting rid of it?
Devin: I think you need to be an expert deal evaluator and understand how to evaluate these properties. You need to understand what CapEx improvements you can make, what the current rental market allows you to get. You need to be able base your numbers on that, but also base your numbers on that by adding management to it as well because that’s how you begin to scale. Not being distracted by the small details with the tenant. Let your manager deal with that and you focus on getting more deals done.
Phil: So much you shared there just brilliant, the idea that if you're going to really do this right, you need to do deals that cash flows so well that you are not the manager. So often people want to be their own managers. And if you're really going to scale, you've need to get out of that mindset. You've got to do deals that allow for management and still cash flow well. But that still means off-market. This isn't on-market conversations, right?
Devin: You want to focus off-market to get the best deals. Working directly with the seller allows you to structure the best creative financing. It allows you to get the best deals done. See, most people when they talk about real estate, they talk about the appreciation of real estate. And the way we look at it is, appreciation is really the bonus to the asset, especially when we get into cash flowing assets. So understanding how to evaluate the deal and underwrite it is so critical, so that the day you close, you understand where it can be improved or where the appreciation can be forced, and how well it can cash flow. Rather than buying something and suddenly, it's just breaking even. That's not why we're buying real estate.
Apprentice Devin Becomes Mentor
Phil: I could talk about this all day, but I think some others would like to know how you made the transition from being a part of our program as an apprentice and having tremendous success, to now becoming part of the team. So tell us what led you to want to become a part of the Freedom Mentor team?
Devin: Well, for one thing, I saw what it did for me financially. I mean, I was making income and generating checks that I have never seen in my life before. And I did not grow up with money. My family didn't come from money, my parents didn't own any real estate. And when I saw what we were teaching, I wanted to be a part of it because I do have a passion for helping people. I love helping my retail clients buy and sell their real estate. I love being able to change people's financial situations. I’m very involved in my church and I love serving people. In addition, I could scale my business much faster by sharing in the profits that we make by showing people on how to make profits. So for me, I saw it as an additional income stream that I could scale without always having to do the deal myself.
Phil: And for everyone, to put that in perspective, what he's sharing is that in the Freedom Mentor Apprentice Program, we share in the profits with our Apprentices. It's exciting for both parties because we create such value. A phrase we like to use is “50% of something is a whole lot more than a 100% percent of nothing”. And so when we share in the profits with our Apprentices, our mentoring team shares in our half. What Devin is saying is that part of what he looked at, was not only his passion for helping others, but also the fact that he could gain financially from a lot of deals across America. This is one of the things that was so exciting about Devin. Devin was just so smart, so sharp, and that's who I try to surround myself with, the best and the brightest. And he was one of those that came out of our program that we were thrilled to have the opportunity to have on our team.
Freedom Mentor Devin
Phil: And it brings us to this question now, and that is why share your wisdom, not just within those in our program, but to our entire general audience?
Devin: Well, because for one thing, I think for a lot of people, there's so much information out there that they don't know what their first step is. We put our students in an implementation environment where they're knowing how to market for deals, they're meeting with sellers, they're understanding how to structure the deals, and that's ultimately what leads to profits. I was tired of seeing all the information out there, the lack of wisdom that is not helping people close on real estate.
Phil: And that's what’s so exciting too, is to know that you share that same passion of wanting the truth, the signal, the wisdom of what really works in the real world. This is not regurgitation, but this is how it really works. This doesn't come from AI, it doesn't come from a blog post written by someone who's just a writer, but it's in the real trenches of how real estate works. And we're so thankful that you are going to add this to your already busy plate and provide tremendous wisdom to our audience. What are some topics that you are thinking of covering here in the next several weeks?
Devin: Some topics are how to make big money with small multifamily deals. There's big money to be made in small multifamily deals if you know how to buy it. How to buy your first multifamily deal. Really helping the audience understand how to get from active linear income to creating a rental portfolio that eventually allows them to accomplish whatever goals they have, whether it be a tax shelter, passive income, more time with their family, or building a rental portfolio at scale.
Phil: We're going to love those. That is thrilling. Well, Devin, it's been such a pleasure to have you here. Do you have any other last words of wisdom for our audience?
Devin: I think there's two areas that I would say that are wisdom. When I looked at the statistics of real estate, 90% of all safe self-made millionaires have been done through real estate. When I saw that statistic, there was no other business that I wanted to approach. The second thing that was kind of a “aha moment” for me was the three things that you gain from real estate that no other business can accomplish: depreciation, appreciation, and cash flow. I have not seen another business that can accomplish all three.
Every Successful Creative Real Estate Investor Has a Mentor
Devin got his start investing in real estate in our Freedom Mentor Apprentice Program. As a result of our mentorship, he is now a world-class real estate investor and mentor in his own right. You too can become a market-leading professional creative real estate investor as well with the right help. That's how every successful investor got their start, with a mentor. Get your mentor here: Freedom Mentor Apprentice Program.