Phelan then had a short spell with Sheffield United before moving to the United States, where he played for Charleston Battery and also coached young players. In October 2005, Phelan was named as player-coach of Otago United in the New Zealand Football Championship. He remained as coach for four seasons up until the end of the 2008–09 season when, owing to poor results, he was replaced by his assistant Malcolm Fleming for the 2009–10 season.
Phelan initially played for Sheffield United before a short spell in the US. He then joined Charleston Battery and coached young players. In October 2005, Phelan became player-coach of Otago United in New Zealand's Football Championship. He led the team for four seasons until 2008–09 when poor results forced him to step down, with Malcolm Fleming taking over as assistant coach.