367: From Air Traffic Controller to Over $50M in Real Estate, How Shawn DiMartile Built Financial Freedom

Show Notes

Shawn grew up in Louisville, KY sharing a bunk bed with his brother all the way til he went to college.  He started working at 16 and never stopped paying his way through college.  He was introduced to an air traffic controller by his mom that worked for TSA.  He found out that almost everyone in the tower was ex-military.  He decided to join the Navy and learn to be an air traffic controller in San Diego.  When he got out, he went to work in commercial basically being in charge of the air traffic for Orange County, CA.

He was making good money in what he thought was his dream job working 6-day weeks.  But he missed out on a lot of things and realized it wasn’t the life he wanted.  A friend introduced him to real estate and he became a student listening to podcasts and reading everything he could find.  He and few friends decided to get into multi-family.  They liquidated their 401k’s and bought a 32-unit complex in Indianapolis.  They figured it out and ultimately succeed.  Nowadays, the portfolio has grown to over 300 units and Shawn was able to quit his job and live off his passive income.

What is the investment type that you focus on and why do you feel it is the best?

Shawn focuses on multi-family (apartment complexes) because of economies of scale.

You can have vacancies and still pay for the property.

The more units you have the easier it is.

Multi-family also gives better pricing – think of it like buying a Costco in bulk vs. the grocery store.

Shawn raises money from investors to buy the properties and pays them a nice return.

Take us through your process of finding a property, how you invest in it, deal structure, etc.

Shawn goes through this at 11 min mark and it is best to listen.

He looks for “value add” or ADU properties.  Value add is an older property that is sold lower because it needs some work.  ADUs add properties to existing properties.

They will raise money through investors and close on the property.

They then renovate the units and freshen the property up which then allows them to raise rents.

They also add amenities like dog parks, playgrounds, improving curb appeal, etc.

Commercial real estate is evaluated off the income it produces.  As they increase the income, the property is worth more.

A typical return to an investor is 15% annualized.

What are some of the secrets to finding the best deals?

There are tools, but one of the best ways is through brokers representing the properties.

You should network with brokers in markets you want to buy in.

Shawn uses a platform called CoStar that is a data analytics platform.

Shawn looks for properties that are not operated very efficiently.

Ever have a property go wrong?

Yes, the first property ultimately was exited for 3x return, but they had a ton of problems they had to fix because they didn’t do goo due diligence.

They had to get an investor to help fix things so they could finish it and end up selling it.

You should always pay extra in diligence to scope the sewer lines with a camera.

Have the inspector check every HVAC and get an estimate of useful life.

How do you manage your properties and ensure they are being run well?

They hire 3rd party property managers.

Shawn’s job is to manage the property managers and run things by what the numbers are showing.

How do you find your investors?

People invest with who they know like and trust.

It takes time to build that up.

Start putting out content or a though leadership platform to get yourself out there and demonstrate your knowledge.

Shawn does all the free content that he can and loves doing podcasts.

As people get comfortable and see him more and more out there, they see that he knows his stuff.

Top books you recommend for people interested in real estate?

The Best Ever Syndication Book by Joe Ferris.

The Book on Rental Property Investing by Brandon Turner

Raising Private Capital for Real Estate by Hunter Thompson

Where do you see the real estate market going?

Shawn shares a number of things on this at the 33 min mark.

The US needs 6 million homes/units, so the law of supply and demand is going to keep the need for housing steady to strong.

Best advice for someone looking to make the leap from employee to entrepreneur?

You are going to have wear a lot of hats from the beginning to build out the business, so accept it and keep your end goal in mind until you can hire out the help.

As soon as you can, hire out the help so you can focus on the most important things.

Use technology to make your life easier, automate, and remove repetitive tasks.

Segment your day with your calendar and apps.

Use Toggle with your calendar to track your time.

Miro is a great tool to help create systems.

Notion helps with assigning tasks and holding them accountable.

What is something you wish you knew sooner as an entrepreneur?

Having more liquidity.

The more liquidity you have the less stress you will get early on.