Investing as a doctor
New to Real Estate · Houston · Member since 2024 · 5 posts · 6 votes
Investing as a doctor
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Hi Mohammad-
Congratulations on being a young doctor in Texas!
You are interested in real estate investing and are looking for resources to develop your knowledge.
I work with a lot of doctors and busy, high income earners to help them build real estate portfolios to slow down at work and offset some of their W-2 or business income.
Some books to consider are Multi-Family Millions by David Lindahl, Investing in Real Estate with No and Low Money Down by Brandon Turner, and Equity Happens by Robert Helms & Russell Gray.
Some You tube channels to follow include Get Rich Education, Ken McElroy, Jason Hartman, and the Real Estate Guys Radio Show.
Yes, until you are making attending physician money, I would house hack the house you live in by renting rooms or buying a duplex as a primary residence with low money down.
To Your Success!
28 Replies
Hi Mohammad-
Congratulations on being a young doctor in Texas!
You are interested in real estate investing and are looking for resources to develop your knowledge.
I work with a lot of doctors and busy, high income earners to help them build real estate portfolios to slow down at work and offset some of their W-2 or business income.
Some books to consider are Multi-Family Millions by David Lindahl, Investing in Real Estate with No and Low Money Down by Brandon Turner, and Equity Happens by Robert Helms & Russell Gray.
Some You tube channels to follow include Get Rich Education, Ken McElroy, Jason Hartman, and the Real Estate Guys Radio Show.
Yes, until you are making attending physician money, I would house hack the house you live in by renting rooms or buying a duplex as a primary residence with low money down.
To Your Success!
- Real Estate Broker · New York, NY · Member since 2020 · 2k+ posts · 1k+ votes2y
Hey @Account Closed- congrats on starting early and wishing you the best as you wrap up your residency (or wherever you are in the process).
There's a lot of different ways you can approach it as someone who will eventually have a high W2 income.
Most of my clients that are doctors, typically will want to purchase real estate to not just yield the benefits of RE, but also for opening their own practice. Is this the direction you want to eventually head in? It's ok if you don't, since you're still fairly early on - but something to think about.
In terms of getting into apartment complexes and large transactions - it's much easier than you think.
Real estate is filled with opportunities to deploy capital, but in the same time is filled with fast-talking snake oil men that will happily take your money towards a "fund" so you own a portion of a large portfolio... only to find out the fund's performance is below par, your money is locked out, and the only person making money is the fund manager from the management fee they've locked you into.
I can ramble about this for hours, but whenever you're ready feel free to reach out I'm happy to chat further.
I'm a broker and investor in NYC, I run my own firm.
Start with Jim Dahle's "white coat investor" website and Youtube channel and Reddit subthreads. He has tons on real estate investing. with a strong emphasis on tax minimization and asset protection.
You can own real estate directly, which is active ownership, or indirectly, which is passive ownership.
Owning it directly and actively can give you very high returns with the Leverage involved but requires quite a lot of work, quite a lot of your time, and quite a lot of your personal liability. So do your research, but also consider passive investing Visa V syndications or even equity reits, Which have historically outperformed the S and P 500 over 20, 30, fifty years and even outperformed direct, active ownership of real estate by 4 to 6 per cent. Passive real estate investing still requires enormous amounts of due diligence and monitoring. But you eliminate the liability risk from the equation.
Good luck. And pay off those student loans as quick as you can. before they eat you up.
- New to Real Estate · Houston · Member since 2024 · 5 posts · 6 votes2y
Quote from @Jeff Roth:
Hi Mohammad-
Congratulations on being a young doctor in Texas!
You are interested in real estate investing and are looking for resources to develop your knowledge.
I work with a lot of doctors and busy, high income earners to help them build real estate portfolios to slow down at work and offset some of their W-2 or business income.
Some books to consider are Multi-Family Millions by David Lindahl, Investing in Real Estate with No and Low Money Down by Brandon Turner, and Equity Happens by Robert Helms & Russell Gray.
Some You tube channels to follow include Get Rich Education, Ken McElroy, Jason Hartman, and the Real Estate Guys Radio Show.
Yes, until you are making attending physician money, I would house hack the house you live in by renting rooms or buying a duplex as a primary residence with low money down.
To Your Success!
Hey Jeff!
Thanks for the suggestions, I'm gonna get to learning. Yeah, I was thinking of buying a triplex and house hacking starting next year. There's a LOT to learn out there, any advice on what you think is a good strategy for someone in my position for the next 5 years?
- New to Real Estate · Houston · Member since 2024 · 5 posts · 6 votes2y
Quote from @Mohammed Rahman:
Hey @Account Closed- congrats on starting early and wishing you the best as you wrap up your residency (or wherever you are in the process).
There's a lot of different ways you can approach it as someone who will eventually have a high W2 income.
Most of my clients that are doctors, typically will want to purchase real estate to not just yield the benefits of RE, but also for opening their own practice. Is this the direction you want to eventually head in? It's ok if you don't, since you're still fairly early on - but something to think about.
In terms of getting into apartment complexes and large transactions - it's much easier than you think.
Real estate is filled with opportunities to deploy capital, but in the same time is filled with fast-talking snake oil men that will happily take your money towards a "fund" so you own a portion of a large portfolio... only to find out the fund's performance is below par, your money is locked out, and the only person making money is the fund manager from the management fee they've locked you into.
I can ramble about this for hours, but whenever you're ready feel free to reach out I'm happy to chat further.
I'm a broker and investor in NYC, I run my own firm.
Hello Mohammed!
I'm in anesthesia so opening my own practice is not an option. I will probably work in private practice for a while on a 1099.
- New to Real Estate · Houston · Member since 2024 · 5 posts · 6 votes2y
Quote from @Account Closed:
I have doctors that I invest for and frankly the biggest problem is convincing hem they are not the expert. They keep getting in the way of themselves. ;-)Quote from @Account Closed:
Hello everybody.. I'm Moe and I'm a young doctor in Texas. I've always been interested in real estate especially in apartment complexes. In a few years, I'm going to start making some pretty decent money and was wondering if there are any resources you guys recommend for apartment complexes or any other kind of real estate investing. It could be books, videos, I'm open to learning anything!
Until I start making and attending physician salary, should I try getting into the duplex/multifamily world?
Thanks!
Hahaha yeah I'm not surprised! But, that's why I'm reaching out to the community for guidance, don't want to get in my own way. Any advice or resources you recommend?
- New to Real Estate · Houston · Member since 2024 · 5 posts · 6 votes2y
Quote from @Paul Azad:
Start with Jim Dahle's "white coat investor" website and Youtube channel and Reddit subthreads. He has tons on real estate investing. with a strong emphasis on tax minimization and asset protection.
You can own real estate directly, which is active ownership, or indirectly, which is passive ownership.
Owning it directly and actively can give you very high returns with the Leverage involved but requires quite a lot of work, quite a lot of your time, and quite a lot of your personal liability. So do your research, but also consider passive investing Visa V syndications or even equity reits, Which have historically outperformed the S and P 500 over 20, 30, fifty years and even outperformed direct, active ownership of real estate by 4 to 6 per cent. Passive real estate investing still requires enormous amounts of due diligence and monitoring. But you eliminate the liability risk from the equation.
Good luck. And pay off those student loans as quick as you can. before they eat you up.
Thanks for the suggestions Paul! Thankfully I don't have any student loans, so I'll be able to utilize my income to its full potential. Any advice on getting into equity reits?
Quote from @Account Closed:
Quote from @Paul Azad:
Start with Jim Dahle's "white coat investor" website and Youtube channel and Reddit subthreads. He has tons on real estate investing. with a strong emphasis on tax minimization and asset protection.
You can own real estate directly, which is active ownership, or indirectly, which is passive ownership.
Owning it directly and actively can give you very high returns with the Leverage involved but requires quite a lot of work, quite a lot of your time, and quite a lot of your personal liability. So do your research, but also consider passive investing Visa V syndications or even equity reits, Which have historically outperformed the S and P 500 over 20, 30, fifty years and even outperformed direct, active ownership of real estate by 4 to 6 per cent. Passive real estate investing still requires enormous amounts of due diligence and monitoring. But you eliminate the liability risk from the equation.
Good luck. And pay off those student loans as quick as you can. before they eat you up.
Thanks for the suggestions Paul! Thankfully I don't have any student loans, so I'll be able to utilize my income to its full potential. Any advice on getting into equity reits?
I like these amongst ,many other right nowREXR - (Rexford) they are a niche (sub-specialist) in industrial warehouse/distribution/manufacturing in the southern California only urban or Infil area, they are not international like PLD - prologis, their MOAT is that SO-Cal has geographic limitation to new inventory, so they have rent pricing power that industrial in rest of country doesn't, also 26 million people in so-Cal and the 2 busiest Ports in country, their earning/revenue projections next few years are best in class, and they are cheaper on price to book than PLD or others, I own some and will buy a lot more in upcoming Recession, likely in next 6-12 months, when publicly traded equities will likely slide by 20-30% although their assets (physical buildings) are only going up in value
VICI- (casino REIT), used to be part of Cesars palace, then Caesars spun them out in 2018, to do sale leasebacks of their properties to take all that physical capex off the books. They are growing, they bought MGM, Venetian, a slew of bowling alleys, and many small casinos. They are cheap, and will get cheaper in coming recession, as tourism to Vegas will decline, and they have superior growth and great management, that know what they are actually doing
ADC -(Agree Realty), they do what I do privately, but on a bigger scale, run by Joey Agree , very smart, they have excellent growth, multi-tenant, triple net retail, and grocery anchored Retail, they will benefit from massive secular tailwinds, as there has been under construction in retail for years, due to fear of E-commerce, higher construction costs/insurance costs, post GFC under financing-construction, etc, so existing inventory is commanding higher rents, we are bumping new leases by 7-11%, they will get this endogenous earnings growth for years
these should perform well over next 10 years, never buy anything in Real Estate for less than 10 years, to allow to go through cycles, and if you can buy in 401k/IRA so dividends can be re-invested tax free
good luck, you have to monitor your E-REITS like you would any other stock, closely, as they move with sentiment not just on NAV like private Real estate, so you can't just dose em w 200mg of propofol and walk away, not that you'd ever do that :)
good luck
- Real Estate Agent · Houston, TX · Member since 2022 · 135 posts · 84 votes2y
Hey @Account Closed
Great call on learning as much as possible first before jumping in.
I'm a big fan of the house hacking idea to start. Also consider checking out some local meet REI meetups. There a great one called Space City REI that meets monthly.
I'm a central Houston agent, developer and investor; feel free to reach out to connect or if you have any questions.
- Chris Kersey
- Rental Property Investor · Scottsdale, AZ · Member since 2012 · 314 posts · 146 votes2y
@Jeff Roth thanks for the mention, glad the content is helpful!
Quote from @Jason Hartman:
@Jeff Roth thanks for the mention, glad the content is helpful!
You bet Jason. You are one of the few trusted real estate voices out there. Appreciate you and your thought leadership.
Quote from @Account Closed:
Quote from @Jeff Roth:
Hi Mohammad-
Congratulations on being a young doctor in Texas!
You are interested in real estate investing and are looking for resources to develop your knowledge.
I work with a lot of doctors and busy, high income earners to help them build real estate portfolios to slow down at work and offset some of their W-2 or business income.
Some books to consider are Multi-Family Millions by David Lindahl, Investing in Real Estate with No and Low Money Down by Brandon Turner, and Equity Happens by Robert Helms & Russell Gray.
Some You tube channels to follow include Get Rich Education, Ken McElroy, Jason Hartman, and the Real Estate Guys Radio Show.
Yes, until you are making attending physician money, I would house hack the house you live in by renting rooms or buying a duplex as a primary residence with low money down.
To Your Success!
Hey Jeff!
Thanks for the suggestions, I'm gonna get to learning. Yeah, I was thinking of buying a triplex and house hacking starting next year. There's a LOT to learn out there, any advice on what you think is a good strategy for someone in my position for the next 5 years?
Hi Mohammad-
My pleasure and thank you for the follow-up question.
I think you are in a great position and wise to be thinking about real estate investing as one of the vehicles to not only create passive income streams but offset your W-2 income.
One of the strategies I see the doctors doing that I work with is purchasing short term rentals as they are more actively managed and it helps them be seen as a real estate professional for tax purposes based on the number of hours they are working in their real estate business which helps offset their W-2 income. Additionally, you can do a cost segregation of the property and take bonus depreciation creating additional tax savings.
Beyond short term rentals, I think buying a triplex or property every two years as a primary residence and then renting out the unit you lived in and repeating this every two years is one of the best ways to accumulate a portfolio of properties with little down with property tax savings while you live in the property.
Then, it will be surprising how quickly the equity builds up as other people pay for your asset that you then can pull equity out and buy a larger apartment building after you have learned about property management from owning the smaller rental properties.
To Your Success!
- Rental Property Investor · Scottsdale, AZ · Member since 2012 · 314 posts · 146 votes2y
Thanks again, reach out if we can assist you on your journey!
Quote from @Jeff Roth:
Quote from @Jason Hartman:
@Jeff Roth thanks for the mention, glad the content is helpful!
You bet Jason. You are one of the few trusted real estate voices out there. Appreciate you and your thought leadership.
- Property Manager · Kissimmee, FL · Member since 2019 · 446 posts · 266 votes2y
Thanks for this, @Jeff Roth! We see many doctors (and groups of doctors) investing in STRs here in Orlando. Aside from the tax benefits listed above, they get to enjoy the properties with their families during their down time.
@Account Closed, congrats and best of luck both on your medical AND your RE investment journey!
- 2yAlecia LovelessPro MemberMember since 2019 · 3k+ posts · 2k+ votes
@Mohammad Khudirat If you haven’t already check out the “White Coat Investors” website and blog. They provide a lot of useful information for people but primarily focused on doctors regarding all types of investing including real estate, 401Ks and 403Bs, life insurance, disability insurance, regular investing accounts and more.
I’m not sure how I came across this site about 3 years ago as a non-doctor but I’ve learned a lot of great information from it.
- 2yDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
@Jeff Roth curious as to how your clients with a W-2 job are able to claim Real Estate Professional and meet the IRS requirements?
Every tax professional I've ever spoken with and every tax professional comment here on BP that I've seen, states it's almost impossible.
What's your secret?
Logical Property Management4.9460 Reviews Hi Drew-
The doctors document their hours actively working on their real estate. It helps that STRs are more actively managed than LTRs to qualify for being designated a Real Estate Professional.
They do this with their individual tax professionals.
I have nothing to do with that or the cost segregation studies. I help them acquire the STRs.
Quote from @Jeff Roth:
Hi Drew-
The doctors document their hours actively working on their real estate. It helps that STRs are more actively managed than LTRs to qualify for being designated a Real Estate Professional.
They do this with their individual tax professionals.
I have nothing to do with that or the cost segregation studies. I help them acquire the STRs.
In order to qualify for real estate professional status, you need to spend more than half of your work-related hours dealing in real estate directly, or more than 750 hours during the tax year. There would be no way to do this while working a full time W2 job. A doctor’s spouse may qualify if they work a job in real estate, but very few working doctors would qualify.
- 2yMichael CalveyPro MemberHead of Sales at BiggerPockets · Denver, CO · Member since 2023 · 134 posts · 154 votes
Quote from @Account Closed:
Hello everybody.. I'm Moe and I'm a young doctor in Texas. I've always been interested in real estate especially in apartment complexes. In a few years, I'm going to start making some pretty decent money and was wondering if there are any resources you guys recommend for apartment complexes or any other kind of real estate investing. It could be books, videos, I'm open to learning anything!
Until I start making and attending physician salary, should I try getting into the duplex/multifamily world?
Thanks!
I love what you are thinking about. We'll be launching something very soon about passive real estate investing like you are interested. Join our waitlist on it. It's coming real soon...
Quote from @Steve K.:
Quote from @Jeff Roth:
Hi Drew-
The doctors document their hours actively working on their real estate. It helps that STRs are more actively managed than LTRs to qualify for being designated a Real Estate Professional.
They do this with their individual tax professionals.
I have nothing to do with that or the cost segregation studies. I help them acquire the STRs.
In order to qualify for real estate professional status, you need to spend more than half of your work-related hours dealing in real estate directly, or more than 750 hours during the tax year. There would be no way to do this while working a full time W2 job. A doctor’s spouse may qualify if they work a job in real estate, but very few working doctors would qualify.
Correct. For the Real Estate Professional the doctor usually works with their spouse and some doctors have flexible work arrangements with their office or clinic or own the office or clinics and have administrative staff.
Moe,
The stereotype that doctors make poor investment decisions is not entirely undeserved in my experience. So my first piece of advice would be to listen closely to the professionals who do this every day for a living.
However, I've also seen more than a few doctors get taken advantage of in this biz. So my second piece of advice would be to be very careful who you trust. I know those two pieces of advice contradict each other somewhat, but it is what it is. Be wary of any and all advice at first (most everyone is trying to sell you something), but once you find the right people, pay attention to what they have done that has made them successful and leverage their advice.
Any active strategy is going to take a lot of time that working doctors simply don't have. Even "passive" strategies still require a lot of time doing research, vetting sponsors and partners etc. Not putting enough due diligence into these types of investments is probably why a high percentage of doctors end up making poor investment decisions. Unless you're passionate about real estate and have lots of extra time to learn and become an expert at it in addition to your day job as a doctor, I'd honestly just stick with something more "set and forget" like mutual funds.
That said, some good strategies that don't require a ton of time or specialized knowledge would be ones that involve your primary residence, such as house-hacking. Considering you are young, perhaps consider house-hacking a property in a good location, then converting that property to a rental and doing it again every year or two until you're too old to want to live with housemates or in a multifamily building anymore. That will help build a nice real estate portfolio of investment-grade properties (you probably won't want to live in crummy places), and you need somewhere to live anyway. You could also combine strategies and do a value-add to each property as you go, forcing appreciation and building equity quicker that way while also learning about construction.
As far as jumping straight into apartments, this is where I have actually seen several doctors who I know personally fail (they got taken advantage of by their partners because they didn't have the time to be involved and supervise, or the knowledge they needed to avoid being ripped off).
I'd start small and think about the least time-consuming and the lowest-risk strategies considering your busy work schedule/ lack of bandwidth to take on an additional job which is basically what real estate investing needs to be in order to be successful.
Good luck! You're smart to ask these types of questions so I'm sure you'll avoid making the snap decisions that tend to get many doctors in trouble.
- Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes2y
I have had a few doctor clients, make sure you look into physician’s mortgages. They typically have below market interest rates and can be used for house hacking a 2-4 unit.
- Accountant · San Diego, CA · Member since 2019 · 1k+ posts · 552 votes2y
Quote from @Account Closed:
Hello everybody.. I'm Moe and I'm a young doctor in Texas. I've always been interested in real estate especially in apartment complexes. In a few years, I'm going to start making some pretty decent money and was wondering if there are any resources you guys recommend for apartment complexes or any other kind of real estate investing. It could be books, videos, I'm open to learning anything!
Until I start making and attending physician salary, should I try getting into the duplex/multifamily world?
Thanks!
Whatever you do dont get scammed like many docs do by syndicators. Lots of syndicators raise all sorts of capital from Docs just to push all the risk onto them and leave them high and dry. Do the extra work yourself to really understand the business before you start to Invest passively. I lost over 400k doing stuff like this in the beginning and have learned this lesson the hard way
- Property Manager · Orlando, FL · Member since 2016 · 479 posts · 277 votes2y
Quote from @Account Closed:
Hello everybody.. I'm Moe and I'm a young doctor in Texas. I've always been interested in real estate especially in apartment complexes. In a few years, I'm going to start making some pretty decent money and was wondering if there are any resources you guys recommend for apartment complexes or any other kind of real estate investing. It could be books, videos, I'm open to learning anything!
Until I start making and attending physician salary, should I try getting into the duplex/multifamily world?
Thanks!
@Account Closed ha be careful the next few years, syndicators ears perk up when they hear doctor for raising money.
A couple of people recommended the white coat investor which I think is great and obviously tailored towards you.
My differing advice/thought is if you plan on being a doctor for most of your life, and your goal isn't to replace your income with real estate in the next couple of decades, sacrifice "projected returns" and do your homework on the risk for any deals you evaluate.
Pay close attention to the capital stack, how much debt there is, how much preferred equity there is, how much the GP is co-investing, how much they project rents to rise organically every year, what exit cap rate they're assuming, how much cash reserves the property/investment will have, how much does the deal returns change when you add 50-200 bps to the cap rate, what is your breakeven occupancy and exit cap rate, and a bunch more.
If you're going to be able to consistently invest solid chunks of money every single year, then a big part of your focus should be on not losing money versus hitting crazy returns.
$50k invested per year at a 10% annual compounding return is just over $9m in 30 years on $1.5m invested. Even 5% annual compounding is $3.5m in 30 years.
I don't know what you'll be able to do or plan on doing, but my main point is to focus on how deals can go wrong or how a deal can be plumped up artificially with a few small tweaks in underwriting so you can properly decide if a deal is right for you or not.
- Investor · Naples, FL · Member since 2016 · 256 posts · 75 votes2y
@Mohammad Khudirat
Congratulations on your first post on BP!
I see you are in NY. As an ex New Yorker, I would house hack first before investing outside the tri-state area.. Build up cash, learn from all the free resources here on BP.
Ivan Terrero, DDS
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