Any physician RE investors out there?

Question

Any physician RE investors out there? Would love to hear perspectives, motivations, niches (buy and hold only feasible or anything else?), time spent on REI, your specialty, etc.

Joe Kim · Answer

i went on a buy and hold adventure 15 months ago using turnkey providers (one stop shop providers who find deals, rehab it, then flip it to investors, then provide property managers).

After buying 5 properties in a span of 7 months in 3 different states from 10/2013 to 4/2014, I took a breather.   First deal is always the scariest but then it gets easier (But also not so easy too...see below).

Overall it has been a fantastic experience and if I had the ability to sell my entire 401K and buy real estate, i would.  (you can with a self directed IRA but that's only after I quit my job.  Active 401Ks cannot be rolled into self directed IRA).

But there are always speed bumps along the way.  After 4 months into my most recent property, I had to evict a tenant.  The process was very easy since it was in a landlord friendly state (Indiana) but the vacancy (4 months and running in the middle of the winter) has been tough but manageable since I have 4 other properties that are cash flowing (and having a good W2 salary).

Real estate investing is not completely passive but the returns are steady and rock solid (12-30% annually depending on how you look at it).  My biggest advice is to find the right turnkey provider in the best markets.   Continue to learn about real estate investing through BP and other mediums.  None of us have the time to wholesale, flip, or do our own rehab (actually I know someone who is working 100% full time and doing it all!)

But one step at a time will allow even physicians to replace their salary with cash flow from real estate and retire early or earlier.

Joel Owens · Answer

The doctors I work with many are surgeons. They barely have time to breathe so are looking for something passive.

They tend to like NNN single or multi NNN strip centers.

They get excited about other asset classes for yield but then learn it is more hands on and they simply do not have time for that.

These docs make well into the high six figures per year with their jobs so I think a doc making say 100k year etc. might view things differently and maybe have less demands on their time. We hit 15% coc passive with 25% down and they love that. Typically many are happy with a 7% annual coc when they first call me.

Dawn Anastasi · Answer

@Andrey Yusupov  I have heard that due to a physician's schedule, they often become very hands-off landlords (using a PM company) or just invest in a REIT or become a private lender.  I would like to know if this is true.

Michael L. · Answer

Hi there, young physician here. I am a newer investor and while it does take some time extra time to be involved in REI, for my investment strategy it has not been too bad. I am buy & hold, long term only.

I do not use property management currently, because I find a paradox with using them. First off, their financial interests are not properly aligned. Secondly, the only task I would want help with is filling vacancies; yet this is the one I least trust them to do. I'd rather know (and personally screen) the people living in my most valuable assets.

For the day-to-day management, I find it almost a total non-factor for my time. I rent higher end homes to nice tenants, and if something goes out, they email me and I can take care of the matter in minutes by forwarding it to my handyman or other contractor. Rents are collected online and automatically transferred to my account.

This has allowed me to invest locally while running a practice. Not sure how long I will do this, but for now it's working out well. PM me if you'd like to chat more.

Oh and one more important thing here - there is no free lunch. The trade off that I pay for with these nice rentals is smaller margins. Don't get me wrong, the returns are very good and stable, and I am happy with them, but nothing like some of the stories you hear about on BP.

Andrey Y. · Answer

I think Joe must be super busy in his W-2 job to chime back in (aren't we all) ;). I would also be interested to hear his and others' experience with turn-key providers from after, specifically those in Indiana.

Mike Gallagher · Answer

my wifes a veterinarian and loves to help me out with rehab projects. its a good way to relieve the stress that she deals with on a daily basis. she gets satisfaction from helping me out and enjoys the final product that someone will be able to enjoy. she would never give up her profession, but loves to see rehab projects and enjoys our rentals.

Pat L. · Answer

this site we subscribe to maybe of interest....

The White Coat Investor- Investing And Personal Finance Information For Physicians, Dentists, Residents, Students, And Other Highly-Educated Busy Professionals »

Every time I take our dog to the Vet its 10mins with the dog & then 15-20mins talking to our Vet about our NNN real estate & those he he is breaking into. He tried the proverbial buy & hold & PM's but decided quickly that NNN was the most effective 'hands off' strategy.

A surgeon we are close friends with admits most of his wealth was accumulated in NNN & car washes.

Andrey Y. · Answer

@Kelly Sennholz @Albert Hasson @Joel Owens

I wonder if it would be possible to cut down work hours (to 20-30 hours lets say), after having enough cash flow from REI projects. Has anyone been able to achieve this? I think given how many years we spend training, there is often that level of guilt, even if we were able to live comfortably.

Any physician RE investors out there?

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