BiggerPockets Money Podcast — Episode Summary

Episode: 4 Ways to Make Passive Income from Real Estate (Don’t Quit Your 9-5!) w/Devon Kennard
Date: October 11, 2024
Hosts: Mindy Jensen and Scott Trench
Guest: Devon Kennard (Retired NFL linebacker, real estate investor, BiggerPockets author)

Overview: Episode Theme and Purpose

This episode dives deep into four main passive real estate strategies—single family/small multifamily rentals, syndications, private lending, and commercial triple-net leases—sharing practical frameworks and lessons for working professionals serious about building wealth and achieving financial independence (FIRE) without relinquishing their W2 incomes. Retired NFL player Devon Kennard brings firsthand experience, transparency, and a focus on making smart, scalable choices for investors at all stages, especially those with demanding day jobs.

Key Discussion Points & Insights

Devon Kennard’s NFL Background & Money Mindset

• Early financial literacy and delayed gratification:
  Devon shares that as a 5th-round pick, nothing was guaranteed for him in the NFL, so from day one, he asked, "How do I make my money last and propel me into my next chapter?"

  “For me, it was like, okay, I want to start to figure out what I'm going to do outside of football while I'm still in it. And I had that mindset from day one.” — Devon (02:07)

• Salary realism:
  NFL contracts look huge but, after taxes, agent fees, and short careers, actual take-home is far less than headlines suggest (03:14).

• Spending discipline:
  Drove his high school Kia for his first 4 years in the league, despite locker-room ribbing, to save and invest.

  “...But for me, it was the delayed gratification. …I always wanted to invest and then let that extra income provide some of those extra things that I wanted, like a car.” — Devon (07:02)

• Aggressive saving and living below means:
  Lived at home with parents during off-seasons, rented basic apartments, prioritized investments over lifestyle upgrades.

  “After I finished my third year in the NFL, I accumulated a million dollars net worth... it was just a testament to where, you know, in the offseason I went back home, but I stayed with my parents..." — Devon (08:12)

• Strategic career leverage:
  Saw contract increases as chances to double down, not splurge—teed up for bigger investing moves as earnings grew (11:20).

The Four Passive Real Estate Strategies

Devon’s real estate framework focuses on strategies that can be run in under 5 hours per week:

1. Single Family and Small Multifamily Rentals
2. Syndications (group investments in larger multifamily/commercial)
3. Private Lending
4. Commercial Triple Net Leases (future focus for Devon)

“...Within real estate specifically, I found four vehicles that work passively: investing in single family and smaller multifamily, syndications, private lending, and then eventually commercial at scale with triple net leases.” — Devon (25:19)
“My marker was: I have five hours a week in the season to focus... Every decision I made was: am I going to be able to do it within five hours or less?” (25:19)

Learning through “Base Hits” & Calculated Risk

• Start small and partner up:
  First investment: $86,000 property in Indiana, partnered, put $12k down—not a “home run,” but vital experience. (20:00–23:32)
• Calculated risk and patience:
  “I’m comfortable with this. And a lot of people aren’t okay with base hits. I’ve always had the mindset of: I’m okay with hitting singles… those are going to accumulate over time.” — Devon (22:14)

Deep Dive: Each Passive Strategy

1. Single Family / Small Multifamily Rentals

• Started with turnkey properties:
  Immediate cashflow, property management in place, minimized time/effort.
• 29 units owned currently, all conservatively leveraged to ~50% LTV.
  “I have good teams, good systems... I’d rather get to 50 doors with 50% LTV than have 150 with 80%.” — Devon (45:22)

2. Syndications

• Over 40 syndications—vetting is critical:
  Worked with an advisor whose entire business is evaluating syndications, learned how to underwrite alongside him.
• Advice: Gut matters as much as numbers:

  “There was one deal... I had a gut feeling he gave me a little arrogant feel… I didn’t love his personality... but you couldn’t deny his track record... I put $100,000 with him and that’s the one deal that’s for sure going bad.” (48:54–49:47)

• Current market caution:
  Big drops in value; recommends being cautious and skeptical, suggests most people should put only a small percentage (5-15%) of net worth into syndications (45:22–47:50).

3. Private Lending

• Built a lending company using personal and, soon, investor capital:
  $2.5M+ lent out, targeting $10–20M, lean operation.
• Returns:
  By going direct, earns 16–18% annualized (12% interest + 2 points per loan, average loan <1yr); funds typically pay investors ~10%—more passive, lower return.

  “You can make 16–18% if you do it yourself, or 10% in debt funds with no work.” (38:35–40:31)

• Tax implications:
  Private lending income is taxed as ordinary income. Use real estate depreciation and cost segregation to offset taxes (36:26–38:17).

4. Commercial Triple-Net Leases (Future Focus)

• Growth goal:
  1031-exchange up into large properties—think Starbucks, Walgreens, or Amazon triple-net tenants for ultra-stable, passive cash flow (54:47).

Key Frameworks & Lessons

Fast vs. Slow Money

• Fast Money: Capital you receive and can access in <1 year (i.e., paycheck, lending returns)
• Slow Money: Long-term investments (i.e., real estate appreciation, syndication returns, stock market)

  “When I retired, I needed to replace my ‘fast money’… my NFL salary… so now I lean more into private lending to cover living costs and use the rest for slow-money investing.” (28:14–30:49)

Capital as the Passive Investor’s “Edge”

• Active investing edge is time/knowledge; passive investor edge must be capital or capital-raising skill.

  “The elephant in the room is: you need to have capital. That’s your advantage as a passive investor.” (55:51)

Betting Small, Scaling Big

• Take “base hits,” get experience and familiarity, and only scale up as you gain competence and confidence.
• “You earn the right to take risks by building knowledge through conservative choices.” (24:19)

Notable Quotes & Memorable Moments

• Delayed gratification and practical humility:

  “DK pulling up in his Kia... It’s not that I’m not going to get it, I’m just delaying it... I thank myself now because I bought [my dream car] with passive income.” — Devon (07:13)

• On private lending returns:

  “If you’re investing your own money, you can earn 16 to 18%. Not pretty good—I would say 16 to 18% is a great return annualized on your money.” — Devon (40:05)

• On syndication risk and skepticism:

  “Track record is a huge thing, right? But you almost have to take track record from the last 10 years with a grain of salt... there was legitimately a 10-year run where if you started a syndication, you’re probably doing pretty well. Now the tide’s going back and you’re starting to see who was naked.” — Devon (48:54)

• On why gut feelings matter:

  “It taught me a valuable lesson to where numbers are numbers, but your gut feel really matters... if I have that [bad] feeling again, I’ll never do a deal with that person.” (49:27)

• On systemizing passive investing:

  “The secret sauce of the book is not only the four strategies but how to do them passively and the structures you need to put in place… systems you can put into place to streamline and make it efficient in each category.” (55:51–58:02)

Timestamps for Major Segments

• Devon’s Early NFL Money Mindset: 02:07–08:12
• Arriving at $1M net worth & Living Frugal: 08:12–10:49
• First Real Estate Investments: 20:00–23:32
• Devon’s Four-Pronged Passive Income Framework: 25:19–28:14
• Fast Money vs Slow Money: 28:14–30:49
• Private Lending Mechanics & Returns: 38:35–41:18
• Portfolio Overview (Units, Syndications, Lending): 40:31–43:32
• Syndication Market Cautions & Lessons: 43:32–49:47
• Commercial Triple-Net Vision: 54:47–55:41
• About the Book & Systemizing Passivity: 55:51–58:02

Final Takeaways

• Passive real estate is achievable with the right systems, expectations, and self-awareness.
• Start with small, manageable “base hits” before scaling; your risk tolerance and gut should always inform decisions.
• Passive investing requires capital—work to maximize the gap between income and expenses to build your “ammo.”
• Diversify, but don’t chase “home runs”—real wealth compounds from singles and diligent, intentional replication.
• Syndications can be valuable, but require supreme diligence and should be only a small part of a diversified portfolio.
• Aim for investments that fit your life—not the other way around. Devon’s benchmark: “Will this fit into five hours per week, or am I sacrificing career/family for an investment promise?”

For further reading, Devon’s new book, Real Estate Side Hustle, offers detailed guidance, templates, and systemization tips to implement these strategies as an ambitious professional with limited time.