BiggerPockets Real Estate Podcast

BiggerPockets Podcast 180: 58 Deals by Age Twenty-Three with Devan McClish

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What were you doing at 23 years old? Probably not building 17 houses like today’s guest! That’s right — our guest today on the BiggerPockets Podcast is Devan McClish, a real estate investor from Nashville who’s done nearly 60 deals in just the past couple years — using almost no money of his own. You’ll learn how Devan finds deals, raises money, works with contractors, and so much more. This show will go down as one of the greatest in BiggerPockets history — so don’t miss a second of it!  

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This Show Sponsored By

We just waRealtySharesnted to give a shout out to our podcast sponsor on today’s show: RealtyShares. RealtyShares is a crowdfunding platform that allows you to invest in professionally managed properties without leaving your living room!

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In This Episode We Cover:

  • How Devan got started learning real estate when he was 18
  • How he convinced a mentor to teach him
  • His first deal 3 years later
  • How to avoid the shiny object syndrome
  • How he landed deals through direct mail
  • How he initially funded his deals
  • Living on $15,000 for a year
  • How to deal with peer pressure when you’re “going cheap”
  • The worst mistake he’s made so far
  • The biggest challenge in the beginning
  • Why finding the deal is harder than finding the money
  • How Devan finds deals
  • Tips on driving for dollars
  • His future goals
  • And SO much more!

Links from the Show

Books Mentioned in this Show

Tweetable Topics:

  • “While my friends are out drinking, I stay at home and try to find the next deal.” (Tweet This!)
  • “Instead of spending $300/month on a brand new car, I’d rather spend that to get another 300 yellow letters out.” (Tweet This!)
  • “Whenever they say you can’t do this, I say watch me do it.” (Tweet This!)

Connect with Devan

Real strategies that work for real people seeking to build wealth through real estate investments. Co-hosted by Brandon Turner and David Greene, this podcast provides actionable advice from investo...
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    Dustin Cecil from Richland, Washington
    Replied about 4 years ago
    This guy’s got heart I like him. He’ll go far
    Isaiah Figueroa from Gibsonton , Florida
    Replied about 4 years ago
    Devan, thank you for your inspiration! What a great story… I just left Nashville and moved to Dallas less than a week ago, so I am pretty familiar with the city. What part of the city do you do most of your new construction in? I’m guessing sylvan park? Do you use yellow letters for all of your marketing? I’ve heard most investors find great success after 4-6 mailing campaigns. Did you find this to be true as well? Lastly, how has the hyper pricing of the Nashville real estate market effected you, if at all. Keep rocking Devan, Cheers….
    Earl Minnis from Santa Barbara, California
    Replied about 4 years ago
    Dustin, hope you keep your eye on quality and not only quantity, when I was 23 I was buying at 50 to 60 percent of value. That’s when you could do that. Bought over2500 houses over a 40 plus year career. Keep as many of the good ones as you can and put them on 15 year loans. A magical thing happens at the end of 15 years, no more payments. Good luck, Earl Minnis
    Marie Singleton Investor from Randallstown, Maryland
    Replied about 4 years ago
    Great information and advice from an honest businessman who understands the ups and downs of getting started without a large amount of capital initially. The best advice on this Podcast was to stay consistent (make 1 offer a day, do a mailing(s) every month, target a list, etc.) and to focus on 1 marketing strategy initially. It is great to branch out eventually after you have a team together but attempting to do everything right out of the gate will cause a newbie to burn out very fast. Also this business gets discouraging when deals aren’t coming through. Big kudos for keeping it pushing while sacrificing to be successful.
    Avi
    Replied about 4 years ago
    This was amazing. I need to start investing. Question for Devan McClish you are very into sending mail where do you get your list from? Thank you
    Devan Mcclish Investor from Nashville, Tennessee
    Replied about 4 years ago
    Isaiah, Most of my new builds are in east Nashville. I have 4 off of west end as well, and we are starting to shift over to north Nashville and south Nashville. I like transitional areas for my investing. I have not gone to sylvan park, margins are too slim for me. I use yellow letters, zip letters, postcards, professional. I’ve found postcards are not very successful in my market. Too flooded and it looks cheap. I use yellowletters.com for my source to market. I usually do not stop mailing. People say stop after 6, I say no. I got a deal in January on the 12th letter!!!! Now that is driving for dollars leads, so I know the house is crappy, I’m not letting them go until they sell to me 🙂 I stay out of trying to push the market. You have to look at the numbers and stay true to the numbers. Nashville is experiencing unprecedented growth right now, and I still think it has a lot of room to grow. I have seen sub markets start to flatten out and even decline a little. It’s supply catching the demand right now. I’m glad that is happening. But because I buy it so right, I am not getting hurt by a plateauing sub market
    Isaiah Figueroa from Gibsonton , Florida
    Replied about 4 years ago
    Thanks for your insight Devan. There are a ton of transitional areas in Nashville. Yea, I agree on the not stopping the mailing until they ask to be taken off of the list or they sell. Yes, Nashville is growing at a ridiculous rate. How much do you personally use your real estate license with your investing? One last question- did you have any negotiation skills or experience before starting to invest? I know as a wholesaler you most likely have to negotiate on price with many people. How did you overcome this? Did you practice of just dive in?
    Devan Mcclish Investor from Nashville, Tennessee
    Replied about 4 years ago
    I use it all the time. I can pull accurate comps, and I love having access to the CRS DATA. I can pull tax cards, see lot dimensions, flood maps, etc. The other upside I see to it is you can list your own properties. Now, I understand being an agent might not be what you want to do, and eventually I will step completely away from it. I do it because I want to hear first hand from buyers and realtors why someone either bought the house, or why they did not buy the house. I keep a running list of every NO i ever got from a retail buyer. I did not. Selling printers at officemax did help me sell to strangers. When you’re negotiating with sellers, try to find the root of their problem and just present facts. You cannot argue with facts. If a seller wants me to pay 200k for their lot that is 10 doors down from the one I just bought for 170k, they cannot argue that my lot is now a comp for their lot. For the most part though I did not have any experience with sellers or even buyers, it’s great to listen to podcasts and get tips from people within your circle on how to overcome objections
    Isaiah Figueroa from Gibsonton , Florida
    Replied about 4 years ago
    Thanks Devan!
    Devan Mcclish Investor from Nashville, Tennessee
    Replied about 4 years ago
    AVI, As a realtor I have access to the CRS data ( court house retrieval system). I have half of my list is driving for dollars (2,500 names) and the other half is people who bought the house 15 years ago that own a house that is 1,300 sf or less. That allows me to have multiple exit strategies. I can tear it down and rebuild or rehab and provide an affordable product on the backend. And I cross reference the time they bought it to any mortgage placed on it. Always use an equity list
    Andy Cross Wholesaler from Culver City, California
    Replied about 4 years ago
    Great Podcast Devan! Thank you so much for sharing your experience with us. A lot of us are struggling, and you have made this work for you in your market. I do have a question for you…you mention making on offer a day to stay in this business. Where are these leads coming from? Are you at least getting one call a day, hits to your website, are you making offers from the MLS? Help me understand how you are able to make one offer a day? I can tell you, I don’t have the inflow of leads to make that many offers.
    Devan Mcclish Investor from Nashville, Tennessee
    Replied about 4 years ago
    Andy, You don’t have the inflow of leads because you’re not going out to find the leads. I make an offer a day from realtors I know that may have pocket listings, a call from my marketing, a follow up lead from previous mailings, I call wholesalers and ask if they have anything for me to offer on, if you still don’t have enough from that which most of that is hustle, door knock and make an offer to someone, or craigslist. There are leads everywhere
    Abdul Rahman from Yuba City, California
    Replied about 4 years ago
    Hey Devan, incredibly inspiring story at such a young ago. I am on 17 years old and was wondering how I can get started because I absolutely love real estate and know this will most likely be my future. I know you have mentioned working for other investors at a young age but I have tried to get in touch with other investors in my area but none seem to get back to me. Any advise would be highly appreciated.
    Devan Mcclish Investor from Nashville, Tennessee
    Replied about 4 years ago
    Abdul, You should work for another investor. What I mean by that is be their deal finder. Or offer to work at a low wage for them. You have to give before you can take in any business. And the key here is persistence!!! There was a developer I really looked up to in my market since I got started. I sent her 6 emails, linkedin messages, facebook messages, and she still had not responded. I went to the REIA I knew she would be at. I showed up early and I introduced myself and asked her to lunch. She eventually sat down with me and changed my business forever. So don’t give up on people. Another mentor of mine did not take my phone calls at first. I brought him a deal that made him over 40k, and now he is not only a mentor, he’s a good friend, and partners with me on deals today. He has been an amazing resource to me. You cannot expect a mentor that is successful in this business to give the time of day to just anyone. If you want someone to be your mentor, do anything and everything you can do in order to make that happen
    Jefferson Gan from Matawan, New Jersey
    Replied about 4 years ago
    Devan, you are a true inspiration! I hope all the teenagers or those in college is like you. You have a great future ahead of you. Worth 1 hour listening to this podcast! I learned some good ideas.Thank you BP, keep up the good work. Question when you do rebuild do you still follow the 70% rule , just wanted to know if that is enough margin to do rebuild?
    Devan Mcclish Investor from Nashville, Tennessee
    Replied about 4 years ago
    I usually follow the 70% rule on a REHAB. But I also follow a 40,000 profit margin. If the deal is not going to make 40k I am not even going to touch it, I would rather wholesale that deal and move on. Too much risk involved On a rebuild, I look to buy the land for 20% of what the new construction is going to sell for
    Yasmine Bisumber Realtor/Investor from Miramar, FL
    Replied about 4 years ago
    If a new construction will sell for 100K you’d buy the land for no more than 20K? Just wanting to know if I understand your formula.
    Oyama Lewis from Charlotte, Nc
    Replied about 4 years ago
    Hey Devan, Awesome tip about partnering on marketing.This would allow investors to leverage the resources that they have no matter how little it may be.Inspirational show guys>
    Evan Thoma Real Estate Investor from Chicago, Illinois
    Replied about 4 years ago
    Devan, this info is incredibly helpful. Keep up the hustle and you’re going to make a difference in the world. I have a quick question for you. When you go in with a partner (the money) who is financing all or most of the deal are you still buying the house in your/your company name? Do you get to say you have a cash offer when your partner is involved or is it still considered financing from the seller’s perspective? Thanks again and keep pushing!
    Devan Mcclish Investor from Nashville, Tennessee
    Replied about 4 years ago
    I don’t have a company name for tax reasons in my state, so I go on title with my investor. It protects both of us in case anything happened. I can prove I was apart of the deal and had an interest in it. And banks do not care as long as the person applying for the loan is on title or is on a partnership agreement with me. Yes I do for a couple of reasons. Most of the time, we pay cash for the lots and then finance the construction after. Hard money is cash. I am not going to say to a seller “I am having my hard money guy finance this.” They won’t understand. And if I ever use bank financing, I do not disclose that either: 1. It’s going to appraise because I always buy right 2. most importantly, the seller gets all cash at closing anyway. As long as they get paid when I say they will get paid, they have never cared how I find the money.
    Luka Milicevic Rental Property Investor from Nashville, TN
    Replied about 4 years ago
    One of my favorite podcasts-I might be biased because I know Devan personally 🙂 He has helped me a ton in my real estate career. I have to say the biggest thing I learned from this podcast and speaking to Devan is the importance of finding deals and hustling your tail off. I have completely changed my goals and my business plan as a result.
    Yasmine Bisumber Realtor/Investor from Miramar, FL
    Replied about 4 years ago
    One of my favorites so far. Listened to for the second time for notes!
    Chris Doyle Contractor from Chester, New York
    Replied about 4 years ago
    Hi Devan, Very inspirational pod cast I , had some questions on the new build s , I don’t know if you can break down the numbers real quick approximately , i think you said the profit was aprox. 130 k and the land is 20% of the sale price? what would the cost of construction apart from the land be, and the final sale price? do you have a standard formula for beds /bths and sq. ft. you are shooting for ? Also because you are buying small houses and tearing them down first , are you getting a better deal on the land compared to builders who are just buying vacant lots. also where are you getting the financing for these I understand you said if the deal is good enough the money is easy to get but how do you know who to approach or present the deal to
    Walter W. Investor from Seattle, Washington
    Replied about 4 years ago
    Devin, Well done! Very inspiring! Have you read The Snowball (https://www.amazon.com/Snowball-Warren-Buffett-Business-Life/dp/0553384619)? If you liked The Intelligent Investor, I think you will like Snowball. Best wishes, Walter
    Ramsey Howard Investor from Warner Robins, Georgia
    Replied about 4 years ago
    Can’t stop listening to this podcast, amazing inspirations Devan! One question i can’t wrap my mind around the statement you made about checking the property tax maps to see where people are paying cash for stuff. What about that am I not understanding, how do you know how they are paying for the properties.
    Julie Marquez Investor from Seattle, WA
    Replied about 4 years ago
    Hi Devan: I just listened to your podcast and I’m inspired! I want to be like you when I’m 23! 🙂 I love your confidence and your determination to go after what you want. You are persistent, and that trait wins. Congrats on all your successes and that for being available to share your knowledge and help others!
    Nick Callea Real Estate Investor from Nashville, Tennessee
    Replied about 4 years ago
    Devan, Heard the podcast this morning. You’re a special guy with a very bright future. Assuming that you don’t have a cash buyer, and that your buyer is someone you do not have a working relationship with – How do you handle closings on your wholesale deals? Also, how do you protect yourself from the potential buyer going direct to the seller and cutting you out? What lenders / title companies in Nashville are comfortable with assignment deals? thanks!
    Devan Mcclish Investor from Nashville, Tennessee
    Replied about 4 years ago
    My protection is the contract. They cannot go around with that. The downside is dealing with a buyer that might back out. I always ask a MINIMUM 2,000 nonrefundable earnest money deposit, no contingencies, close with my title company. If they don’t accept those terms, I say next nashville title
    Antonio Coleman Specialist from Sibley, LA
    Replied about 4 years ago
    Devan, doing that many deals by the age of 23 will change some people for the worse. Seems like it made you a better investor that’s humble and willing to share your story. Keep up the good work bro
    Dan Sifuentes Investor from Nashville, Tennessee
    Replied over 1 year ago
    I invested in 3 deals with Devan McClish. He managed to lose me $45,000 on those deals combined. Not one of the deals made money. And this is a common story with many of his other investors. All of the his other deals that I know of lost money as well. To top it all off, he won’t take any personal responsibility for the failure of the projects. He blames everyone but himself. He doesn’t care about his investor’s money at all. Don’t invest with this guy unless you want to lose your money.