Select Page

EP 10 Passive Income investing during a Crisis

by Docofalltradez | Dr. Jeff Anzalone

WHO’S ON THIS EPISODE

i

Email

Getting started with building an emergency fund and passive income- Dr. Jeff Anzalone

In this episode, we invite Dr. Jeff Anzalone to talk about his strategies in building an emergency fund, taking advantage of the opportunity in crisis, and investing for passive income generation.

Dr. Jeff is a periodontist who eliminated his over $300k worth of student debt after 7 years of practice. He is also an author and an expert in studying successful dental practices, reducing tax burdens, and earning passive income with real estate syndicates. Below are highlights from the conversation we had.

The importance of having an emergency fund.

It is no secret that we’re in the middle of an inevitable crisis that is the COVID-19. It is therefore imperative to have an emergency fund set up for time like this when even going to work is a risk. 

Dr. Jeff came up with a modification of Dave Ramsey’s strategy of building a six months emergency fund to twelve months instead. He shares some actionable tips for setting up an emergency fund:

  • Eliminate the scarcity mindset and adopt an abundant mindset.
  • Have your emergency fund in cash and a money market account for easier access just in case a crisis ever affects how you can access it. 

Opportunity in crisis.

Dr. Jeff has adopted a quote: “be fearful when others are greedy and be greedy when others are fearful.” It is wise to invest now during the crisis since everything is cheap and affordable before they hike up again. 

Most people are now looking for ways to sell the assets that they believe will lose value as the pandemic progresses. Dr. Jeff shares tips on how to seize the opportunity in crisis: 

  • There’s probably never going to be a better time to invest in the market than now. 
  • Do not get out of the market by selling- it will only create a loss and things are going to come back to normal or halfway there once the pandemic is over.
  • This crisis could surpass the great depression with the number of millionaires made.
  • You should engage the entrepreneurial spirit within you to start a business that you would have never started.
  • As a business owner, think about customer care especially if in the healthcare sector.

Investing in real estate syndicates.

As a doctor, one source income that is highly taxed can be quite restrictive especially for doctors who want to be debt-free. It is therefore wise to find ways to make passive income like investing. 

Tips on how to get started with investing:

  • Get a good understanding of what you’re investing in by reading, listening to podcasts and networking.
  • Learn from other people failed invests to look for better investment opportunities.
  • Get a mentor in your field of investment that will lead you.
  • Attend conferences to meet people who know things in your field of interest better than you do.

 

Why real estate syndicates investments rather than single-family homes:

Real estate syndication investment is where an investor invests in large properties than they could ever manage to afford on their own. Their return on investment is 7-8% with a five-year hold and a profit split when they sell. This means that your investment could double in 5-7 years and is tax-free due to real estate depreciation. Dr. Jeff shares tips on what you need to know before investing in real estate: 

  • If you’re not interested in dealing with tenants, then real estate syndication might be the best option for you. 
  • It gives you the choice of not being an active investor.
  • Attend meetings set up specifically for real estate syndication.   https://joefairless.com/
  • The risk in these types of investments highly depends on the asset class you’re in.
  • Find an experienced real estate accountant to help you with your investments before you jump in.
  • There are no deals negotiation done since you’re going in as a shareholder so no attorneys needed.

“As a dentist and physician start building an emergency fund and for those who are at home during the COVID-19 pandemic, look for a way to a passive income once all this is over.”- Dr. Jeff Anzalone

Resources:

Website: https://www.debtfreedr.com/

Free Guide: https://www.debtfreedr.com/freeguide/

Joe Fairless:  https://joefairless.com/

Book: What They Don’t Teach You in Dental School

Final Jeff No Leveling.mp3 transcript powered by Sonix—easily convert your audio to text with Sonix.

Final Jeff No Leveling.mp3 was automatically transcribed by Sonix with the latest audio-to-text algorithms. This transcript may contain errors. Sonix is the best audio automated transcription service in 2020. Our automated transcription algorithms works with many of the popular audio file formats.

Docofalltradez:
Welcome to the Physician Negotiator podcast, where no decision is left to chance with your host doc of all trades.

Docofalltradez:
All right. Today on the show, I have Dr. Jeff Anzalone. Dr. Anzalone is a Perry or a dentist who started his career with over three hundred thousand dollars of student debt. He was able to eliminate this debt after seven years of practice. He's also an author of a book titled What They Don't Teach You in Dental School. He is now an expert in starting successful dental practices, reducing tax burdens and earning passive income with real estate syndicates. He shares this wisdom on his Web site and his blog called debt-free. Dr. Dot.com, that's debt free. d.r dot com. Dr. Jeff, welcome to the show. But, sir, it's a pleasure to be here. Well, hey, it's a pleasure to have you and you are the perfect guest given the set of circumstances that's going on in this country and the whole wide world right now. We're going through the pandemic of Cauvin 19. And I feel that physicians and surgeons, physicians and dentists, I'm sorry, are feeling the effects of this pandemic. During the last financial crisis, we really weren't impacted. And it seems like this time around we are severely impacted. And you wrote a really nice article on your Web site called Financial Stress during a Crisis Five Lessons Learned and the lessons that are really paramount for professionals. Is it all about debt? And the one thing that you advocated is having a rainy day fund. Now, traditionally, people advocate having a three to six month rainy day fund, but you advocate something a little bit differently. Would you mind explaining that?

Jeff:
Well, yeah, absolutely. I am a big Dave Ramsey person. I followed him when I first got out of my residency and but I didn't follow his. His baby is seven baby steps to the T. Because he didn't want anybody to do any type of investing while they were getting out of consumer debt. And with me not getting out until I was in my early thirties and I knew I gonna take several years to get out of there. I didn't want to lose those years of compound interest. So I decided to do both, you know, get out and get out of debt quicker. But also at the same time, Max, out of retirement accounts. But and that's where were we? We kind of differ in that aspect. The actually the his first baby step baby step one is to establish an emergency fund. And with with him, he just because you got to think about he's talking to the masses. You know, he's talking to, you know, the just the everyday blue-collar person. Like, you know, I just get a thousand dollars in that account, you know, just just get some because, you know, as you know, most people don't even have an emergency fund. So just getting something in an account. That's what he's recommended. Then after you get out of debt, consumer debt, which is baby step two, you go back to the emergency fund and build it up to three to six months of your expenses.

Jeff:
Now. What would things have taught me in the past was whenever I was giving out of my residency, I had a supposedly I had a job locked up with with a group here in my hometown in Louisiana. So about 10 to 14 days before I graduated, they basically just pulled the job out from under me. And, you know, I had a two month old. I was married. We'd already bought a house. You know, we were paying an interest only loan on it. I had, you know, almost three hundred thousand dollars of student loan debt, didn't have a clue how to start a practice or anything. And it was just like that. How it change, how things can change. So ever since then, I've I've always been real leery about how things could happen, just like with this crisis, how one day you're sitting here going to work, the next day everything's shut down. So that really changed my mindset about money and kind of fear because I was there for it for a long time. I always had this scarcity mindset. And that's really held me back with with a lot of things not having that bandit mindset.

Jeff:
You know, I was always like, OK, well, there's only so much money to go around and that's it. Which, as you know, that's that's not true. I mean, look at how they're printing money right now for the country. You know, so. So with with what this crisis has really taught me is that three to six months that he's recommending emergency fund living expenses. Well, when you're going through something like that, that could be like bare bone, minimal living expenses. You know, that could be just to keep the lights on, food on the table and a roof over our heads. But with the issue that I went with, with my residency, I didn't think that was enough. And I actually extended it out to 12 months or longer, and and now we've we have actually more than that just because, you know, I never knew when something could happen and unfortunately something has happened, but where we're a lot more prepared than I think that most people. But, you know, there still is going to be a point where your your money is going to run out at some point unless you can get back to work. So hopefully we'll see that sooner rather than later.

Docofalltradez:
So you're advocating for 12 months worth of an emergency fund, and I totally agree with that. Now. With respect to that emergency fund, would you have it in just cash or how would you where would you have that money sitting?

Jeff:
That that's a good question. It just depends on the person.Again, you would you would never think that if you had your money in a checking account or a savings account that you couldn't get to it. But but again, what if I mean, what if something happened? What if what if the banks shut down, which I know some banks were shutting down? What if the next crisis has to do with computers and you don't have any access to me? You never know.

Jeff:
And so I personally would recommend having some in both, you know, both just in cash.And then also, you know, just like in a, you know, a money market account or something where you can get to it quickly. You can write a check if you need to. That's that's typically how we use it.

Docofalltradez:
Right now, it's interesting, if you will, if you watch the media and if you watch just television, the crisis looks like the whole world is about to come to a screeching halt. And it may it may very well over the next 18 months. Economically, we may suffer tremendously. But in your article, you also talk about that with crisis's comes opportunities. And perhaps this might be a time of opportunity as well as a crisis.

Jeff:
Yeah. And I gave the quote that I've always heard Warren Buffett talk about. And I'm sure you have in your listeners and readers have. And he talks about fear. And he says, be fearful. When others are greedy.

Jeff:
And be greedy when others are fearful. So whenever the market has been going up forever, you know, I really didn't start investing until around.

Jeff:
0 7 0 8, yeah. Ish. Has kind of. I started practicing a couple of years before, but we just didn't have any really money to invest. So I really started when the market had bottomed out. So really, this is the first time that I've that I've ever seen a bear market before. For me, investing and I couldn't understand, you know, when I started investing in Vanguard index funds way back when, you know, all these people were talking about, oh, my God, we're losing all this money and this and that. It's like, well, everything is really cheap right now, that bottom kind of like the stuff, you know. So. So that, you know, fast forward everything, as you know, is pretty much for the most part. Bingo has gone up, so. So that haven't had any issues. But now that the market has dropped to good because of this pandemic and you see people you know, it's a it's a perfect psychological principle. You've probably heard of the lawsuit also version. You know, we react more to laws than we do to gain, you know. And we just for the most part, we just we hate losing. We would we would lose. We would, you know, do whatever we can to protect it from losing something. Then then we are to gain. So when when we look at our accounts online and we see our four one KS and retirement accounts just everyday, just going down and down and see the market go down, we we we want to get rid of that. We want to prevent that fear.

Jeff:
So everyone is fearful. And what do they do? They unfortunately, they take their money and they get out. The market will. The thing is it, and I help my parents with with their retirement accounts and that sort of thing. And you know, there they were asking me the same questions that, you know, a lot of people asking is when should we start selling out? And then they put all of their automatic. You know, I'd set them up or all these automatic monthly investments, you know, they turned all that off. And I said, well, two things. Number one, if you start selling out now, you've you've automatically locked in those losses. Because I said right now you haven't lost any money. In the end, I just don't get that to you. So you all say money. On the other side and to you. So it's it's going up. You haven't gained any money either. So that's that was the first thing. The second thing is with my parents cutting off all of their automatic investments that I'd set up for monthly. They're not taking any advantage of of the everything being on sale. So this this is kind of going into Warren Buffett, quote, when he says be greedy, when others are fearful. You know, when when you kind of are in a good position, you don't have much debt or you have no debt. You have a good pile of cash. So you can kind of sit back and wait and and find opportunities like this when, you know, for instance, we've been on the total stock market index fund.

Jeff:
I think it was low 80s. You know, eighty one eighty to share something like that. And then it got down into the upper 50s. I mean you just sit back and as you're watching it go down. Eighties. Seventy five, 70s, 60s, 50s, you're like wow this is this is good stuff, you know, because you know the stock market and it holds like thirty three hundred, you know, stock you know, every stock in the stock market, the US, you know that our country is going to come back. And if it if it if you don't believe that, then you've got bigger issues. You know, maybe you need to move or something, whatever. But if you don't think that that Disney is not going to come back or if if Wal-Mart. You know, Murph. Murphy all. And, you know, Delta Airlines, all the all these big companies, if you don't think they're going to come back, then you probably shouldn't be invested anyway. But with this is with us knowing that, hey, look, these these stocks have been trading pretty steadily the last few years. And with them just dropping down and you know that they're at least going to come back. Let's just say worst case scenario, just at least 50 percent back, you know. So I just think that this is this is a great time. Again, I'm not a financial adviser. I'm not recommending any specific things to people. But that's just for me. Mark, my perspective on this, that again, and every crisis does prevent does present opportunities.

Docofalltradez:
And it seems like a time horizon matters. But having said that, in your parents case, it's still maybe it doesn't, because if your parents sell and they they they put those losses on their books, dealt them, they may never recover if they don't stay in the market. I have a lot of residents who come up to me and they're always panicking about this. And I always would tell them up until this point that they should pray they should pray for a market crash, because right now the prices well, they were so inflated that they were expensive. And now all of a sudden now they're cheap and they're afraid to get in. And I think you're absolutely right. I think what's going to happen is people will realize that there's been a turn. We'll hit the bottom, the double bottom or whatever it is, U-shaped, V-shaped, whatever type of recovery we have. By the time they realize it, it will be too late. So the idea is don't ever get out of the market in the first place. Just maybe keep on dollar cost averaging and adding to your position.

Jeff:
Right. It's funny because, you know, whenever people whether it's people online from my website or for friends that I know, you know, the they're they're talking about, they want to talk about this pandemic. And it's usually. It's usually a negative stuff. Well, not usually it always is negative stuff. Oh, gosh. I mean, you're not able to practice patience. What are you doing with paying your bills this now? I mean, how we're gonna make it. And I guess just being just, you know, thankfully being in the position that we're in and with with. Also with us getting support from our government. You know, being able to have our employees be able to furlough them, let them get unemployment, the different types of loans, small business loans, that could be could be a grant. So, you know, it's I'll look at it from a different standpoint. You know, I always talk about, you know, looking at it like that. You know, at least we do have some help right now. I'm not trying to be so negative, but. And then always encouraging them, say NSA. You know what? More than likely it is just like what you said. There's probably never good hope, you know. Hopefully there's not to be another pandemic or something like this. But more than likely, there's probably never going to be a better buying opportunity. And then we are now have now a friend of mine is also a periodontist.

Jeff:
He he he's up in Connecticut and he teaches part time at Yale to the residents. And there's there's also a 94 year old dentist that also teaches part time with him. And he said this guy is like sharp as a tack. He he knows his stuff. He knows he knows how to invest. He knows how to figure out. For instance, Hurricane Katrina. We were in New Orleans when Hurricane Katrina hit in 2005. And. I graduated in June 2005. You know, it's been hard hit in August 2005. So we really lucked out with that. But he he was thinking like, OK. What what businesses should invest in? What are those people going to need? Hey, hey, kid. Think he got to the point where he found the company that was providing all the FEMA trailers? I mean, that's how this guy's thinking and. So, my friend, ask him what all this stuff happened, you know about it. And you just they just said, you know what? I've live for 94 years and I've never seen anything like like this before. So that just kind of shows you that this this is probably, you know, for for me and, you know, people our age, you know, this is this is probably going to be the best time ever if you want to invest in a market to do it once in a lifetime.

Docofalltradez:
Well, and you mentioned it on that same post, the financial stressed financial stress during a crisis post that during our last depression, that's when most number of millionaires were made in this country. And you predicted it and you said it on your Web site. This will surpass the Great Depression and the number of millionaires made.

Jeff:
That was my prediction. I could be wrong. I've got a 50/50 shot. You know, exactly the wrong I could be right. But. I I do think that my grandmother, she lived through the Great Depression.

Jeff:
So I always got to hear stories of her, you know, growing up. And you know what? She was a child. And it was really, really bad. She said it. She had four brothers and a Christmas. You know what? Santa Claus would come, you know, now with your kids. You know, they get all these gifts and presence and all this. But when they would wake up in the morning for Santa Claus would come and they had a table with the chairs and each one had a chair, and Santa Claus would leave each one one piece of fruit. Wow. And that was that was I mean, they were just like a static. And that's just how bad it was. I mean, at least we have food available, at least we have, you know, the final bill. They didn't have all that back then. I mean, a lot of times if if you didn't have your own garden or somebody that you knew how to garden, I mean, you would you were hurt. So it was a really bad back then.

Docofalltradez:
Well, with respect to the opportunities and you mentioned your 94 year old doctor associate, you know, he was investing in FEMA trailers. Well, we have we've demonstrated the weak, the weakness in our country in this crisis with respect to supply chains, drugs, personal protective equipment and other things that we thought we had in place that are produced in China. We no longer have access to. So this might be an opportunity of a lifetime for somebody to invest in these companies and or start their own company. With the help of the government.

Jeff:
Yeah, that's that's true. I think I saw an interview, I've seen so much stuff in the last couple weeks. It's hard to keep up with it. But I believe it was an interview with Mark Cuban a short time. Right. And he said and they were asking him, you know, about what what they thought was going to happen. And he he'd said just what you said. He thinks with with the entrepreneurial spirit, there's so many people have that there are going to be people that start businesses and companies that come out of this, that if this pandemic would have happened, they would never started. So there you go. Every every crisis presents an opportunity. So I think you're right. Well.

Docofalltradez:
Well, with respect to your practice, so a lot of physicians and dentists are no longer practicing medicine right now. They've been mandated by the government is to cease all procedures until unless it's an emergency. So clearly it's impacted your practice.

Docofalltradez:
But my question for you is it's not like these patients that are going away. They still need these services. They still need to be cared for. So are you finding that you're just postponing their care? Are they as is all this demand and volume just building up?

Jeff:
That's a good question. I think there will always be a need for health care. Just like, you know, there's gonna be a need for anaesthesiologist once. What's all this gets back up and go? And it's it's kind of like, you know, nobody's ever seen this happen before. So it's it's just a guess, you know? I'm also in a mastermind group with a guy that used to be the president of the Magic Kingdom. Dan Cockerill and Leacock Roses dad, he's. He's written a lot of books. I want I'm co-creating Creating Magic and it's based on coccaro CEO C K E R E L L Li l e li cockerel. I think his Web site might be creating magic or something like that, but. As you as you know, if you know anything about Disney, you know that they're they're big on customer service. You know, you go you go to the park and it's just like spotless minutes. You're like you're scared to drop a piece of paper on the ground because you're going to make the place dirty. So, hey. I agree with him. That right now business owners should be thinking about customer service. Because when we do get back to work. Think about. What's what's going on in the customer's mind wherever they go? What are they going to be thinking about what you need to address at. They had the owner of the Houston Astros, a Houston Rockets, on the news the other night, and this guy, ω, he had a list of stuff.

Jeff:
He had all these Landry's restaurants and all these different restaurant. He owned a lot of stuff. And he is just a good old Texas guy, you know. I mean, if you've seen the interview, just like you know, who's there interviewing this redneck from Texas. You know, you never thought he was the owner of the Houston Rockets, but. He was just very passionate about it. He's like, you know what, he was talking about customer service. He said, when we get back going. He said there's not gonna be a single thing on our countertops, a single thing on our tables that our customers are going to see us wiping this place down between us there. They're not. We're not what you have to say anything to. They're gonna see it. So I think that needs do. Doesn't matter what business that you're in. You know, you really need to to express that to your employees or we're definitely going to do that. And we're going to tell each, you know, each patient before they come in. What we're doing. Because even if they don't ask or thinking it. You know, if your doctor calls you and a couple loves and says, hey, you want to come in for your AG, say you're going to be thinking, well, how are you going to prevent me from, didn't, you know, getting the virus? Right. So I think that's gonna be big.

Docofalltradez:
Yeah. And I imagine especially in the health care industry, we're gonna have to adapt in ways that we cannot imagine still, you know. So let's change gears a little. You are an expert in financial real estate syndicates. And I suspect you started doing this because you've already paid off all your debt. I'm sure you've Max maxed out all your four one KS and all your other I.R.A.s. And so you were looking for other ways to invest. So walk me through that journey how you kind of decided you're gonna take the plunge into into real estate.

Jeff:
I got real complacent after we got out of debt and I met some other financial goals. And, you know, I've always had goals to set, you know, as you as you probably did, too, you know, you graduated college. Your goal was to get in a medical school. Then your goal was to get into a residency and then join a group, so you always have these goals and then what? Once I did all that and hit that final goal, it was like. OK. Now what? And I think you're seeing a shift now. The Dave Ramsey Show. It used to always talk about getting out of debt. Well, now he's been on there for so long. He's helped he's helped so many people get out of debt. Now, what does he do it? He's shifted now to teaching people how to be millionaires. And a lot of it focuses on that. So, you know, you got to kind of pivot to to whatever whatever life throws you and that that's just part of it. So. Being complacent. That was that was one thing that kind of startled me in that direction. And then also. With after reading a couple books and rich dad, poor dad, Robert Kiyosaki, which really hit me hard because, you know, he had the cash flow quadrant, right. And then, you know, I was on that less of a quadrant, you know, even though I was the doctor owner. I was still, you know, quote an employee. You know, if if I didn't go to work. I didn't get paid, you know, so. And I realized that I only had one source of income. Which, as you know, as a doctor, that one source of income is active income and it's the highest tax income. So it's like two strikes right there, you got to go to work, and when you do go to work, the government takes a good bit of it. So that that really pushed me to start finding other streams of income, passive income, which led me to real estate.

Docofalltradez:
And so with real estate, you're able to get a passive income and get some tax relief. That was the whole strategy, right? Correct. Now, if you were to so obviously we want to talk to the audience members who already debt-free who Xed out there for one case in their IRAs and they're looking for an opportunity to start investing beyond these instruments.

Docofalltradez:
How would you advise them to get started? So, I mean, they have let's say they'd have it up to you to save between 50 to a hundred thousand dollars.

Jeff:
Well, I'm a big believer, don't invest in anything that you don't understand. Even, you know, most people have an accountant. Even though if you're not going to do your own taxes, you need to understand it to be able to know what your candidates are doing, you know? So I started reading books, listening to podcast, attending events, networking with people. It's a whole different like going from college to in the medical school. It's it's a whole different world. I mean, it's a whole different profession. You got to learn the lingo. You got to know what you're doing. Unfortunately, I didn't do that initially. I just started investing online on some of these crowdfunding sites. And did did well for a little bit. But then I got burned pretty, pretty good. The whole deal. Every every investor lost their money.

Docofalltradez:
Oh, wow. Yeah. And you're talking about these online real estate collections. Great.

Jeff:
Like it was it was a real T shares, which actually went under, which was bought out right at the time. That was the number one.

Jeff:
That was the big one. You mean these guys? That's all they were trying to get me to be.

Docofalltradez:
They're going to sponsor me. They're going to give me all this money for the podcast and then a month later, the whole thing collapsed. So, you know, I'm glad I never I never advocated for them. So. Plus, I didn't know enough about them to really.

Docofalltradez:
And I told them they gave me this country. I'm like, wow, I don't know enough about you to feel comfortable advocate for you. So I'm glad I did it. So I'm sorry that happened to you.

Jeff:
Well, it was actually a good thing because it really taught me that I didn't know what I was doing. And it really taught me to I need to start learning what I'm doing. And then it really helped me to focus on. Teaching people that come to my Web site. What? What's really going on? And at how to edge, you know, the different education that you need. I want to I wanted to be seen as, you know, the trusted person that wasn't selling anything that you come here. You get the information and whatever you want to do with it, that's fine. Versus going to a Web site like their Web site. You know, and they're pitching. All these different deals from all these different sponsors. And you don't know who you're dealing with. So now the only people that I'm best with, I know them. I've met them personally. Those are the only types of people that I recommend. Other people that I can vouch for. You know, people say with Jeff, what about, you know, this person, you heard about them and. No. I mean, they could be good. I don't know. But I don't if I don't know that at all. I don't recommend.

Docofalltradez:
So. So how would you get started, though? So you have 50 grand. You start you you obviously need to educate yourself. So you recommend books. What else do you recommend? Podcast. OK. And you had a mentor to write.

Jeff:
I've if you if you have somebody in your area, that would be great to have. My dad's friend, that huge, huge real estate investor. I set out with him. I told my wife I learned more in two hours than I did probably in two years of college. I mean, it was just mind boggling. It just opened my just complete is open my mouth. This was last year after I've been doing it for a while. So that that's another great place to start. And then events, conferences, which hopefully we can we can start going back to conferences pretty soon. But you'll meet so many different people just in that this weekend. So that's another great place to start.

Docofalltradez:
Now, you chose apartments syndication, is that correct? I did. So why why did you choose that versus a single, you know, single homes. Single up, Emily homes.

Jeff:
And I almost started into single family homes, but I realized that I didn't want to be an active investor. I don't want to be a landlord. Mm hmm. And and after talking to people.

Jeff:
That did it.

Jeff:
And my neighbor does it. He's got seven houses and he's always said, man. If I could just get 10, 10 houses, I'll be set. But he's always complaining about, you know, God, somebody just knocked a hole in the wall or somehow I just moved out. And I've got a I've got to try to rent it, but I've got to fix it back up first and to me. 10 houses, 30 houses, 50 houses, that's 50 different tenants you're dealing with. That's just. I don't want to deal with that, right. And I just dustups me, you know. You know, different strokes, different folks. But. I don't want to deal with 50 headaches and just seeing how hard and long it would take to scale that vs. having an investment in one, say, 300 door apartment complex. You know, if you have 50 houses, you've got to put on 50 different roofs. If you have one apartment complex with 300 doors, you're only going to one roof. Or just a few rows, you know. Right. And I don't want to be an active investor, so I chose the syndication route to where you pool your money in. You put it in and then every month, every quarter, you get a check. You have to deal with any of that right now.

Docofalltradez:
Did you set up your first indication or were able to? Did you find it or how did you go about your getting your first indication?

Jeff:
I went to a meeting network with people and asked them who they invested with or some of the groups. I wrote those names now and then went out and met with those people. And I have three people now that I know and trust and that I've done deals with, and they've they've pretty much all have done what they said they were gonna do.

Docofalltradez:
So you said meetings are there. Are there national meetings that you attended or just local meetings?

Jeff:
These were these are national meetings. That couple were in Dallas or Landow. But there are depending on where you live, if you live in one of those areas, they have local meetings. But where I live, there's there's what is too small to have them here. So I went to a little bit larger ones than others.

Jeff:
Regional meetings to which one would you recommend the most if you feel like a national one?

Jeff:
I would probably say Joe Fairless(https://joefairless.com/) is meeting the best ever conference. It's once a year. It's February. It was just just this past month. Last month. A couple of months ago. But that's probably probably the this as of now, probably like the Super Bowl of the real estate movement.

Docofalltradez:
Now, I know this is kind of unusual timing. You know, obviously, we just we're stunned and missed that pandemic. We have no idea what the bottom is. It come with real estate. I imagine real estate's going to take a correction here very soon, assuming none of that happened. What kind of return on your investment would you expect with a typical syndicate deal?

Jeff:
There there's all types of different returns out there, but the ones that that I'm currently in and the ones that are currently invest in, they pay roughly 7, 7, 8 percent a year and. Typically, there's a five year hold. And then once once they turn around and they sell and in seven years, then you get a. You get to part of the profits split. So if you take all the distributions that you've gotten over that five year period or seven year period plus, you get the the profit split that you get and you add it all together, then roughly you have a what they call a two X equity multiple. So basically, you're double in your money. Every five to seven years, which is a pretty good deal. And the cool thing is most of the distribution will all the distributions that you get are literally tax free. Because of the depreciation you get to take on the real estate. Had. Now, go ahead, I'm sorry. So. So, again, you know, you're you're kind of getting the both the best of both worlds. You know, you're you're getting the passive income every month or every quarter. But because of the accelerated depreciation costs that you can get with real estate, you don't have to pay any capital gains taxes on that.

Docofalltradez:
Wow. What's that? What's the risk in general?

Jeff:
The risk in general would be. You know, kind of what you're going through right now. You know, there's some there's some different classes of real estate or apartments or houses or whatever, that if people can't pay the rent, then you don't get paid. But there's some that some of the class-A apartments that are higher in people have money. They can pay self-storage mobile home park. You know, people, you know, stuff like that, that's doing real well now. So it just it just just kind of depends on, you know, what asset class that you're in. But but again, if you're also in the market. And in you. And you're also in real estate. You know, you're in that's kind of one of the reasons I want to do that. I wanted to diversify myself so, you know, with real estate. It really does depend too much on what the market goes up or down. It usually is pretty steady. For the most part. But I like being in the market, too, because you're getting you know, you're kind of getting that aspect of it as well, that different diversification.

Docofalltradez:
Can you can you offset any of your other income from the depreciation in these deals or is it just from the capital gains from the deal itself?

Jeff:
I'm not a I'm not a tax attorney, but I do believe that you can do that depending on how you have your structure, the way that your income and you have different Elsie's and that sort of thing. But I do think there is a way that you can offset others as well. So I would check with your attorney, your accountant, but. A lot of times a lot of these accounts don't really have a whole lot of experience with real estate. So you want to make sure that you work with one that does. I do know. The I think the Web site is called the real estate. I think it's the real estate CPA or the real estate accountant. And there they really work a lot with passive investors. That do syndications and that sort of thing, so they they know the ins and outs of it.

Docofalltradez:
Excellent. And with respect to negotiate these deals, do you use an attorney to negotiate the contract or you just kind of take what they give you? Does. How does negotiation work?

Jeff:
Well, when when you're a passive investor, you're buying a share within the LLC of that group. So with with that, you don't have to do any negotiating. That's how they put the deal together. There they have people that do all that by it. That sort of thing, sell it. So you're basically just kind of piggy piggybacking on their on their deal.

Docofalltradez:
Excellent. Well, hey, Jeff, I I've learned a lot myself. I I myself have been an accidental landlord. I tried commercial real estate and failed.

Docofalltradez:
I tried regular real estate and failed. I've never I've not done syndicates as of yet. I'm really curious to try it. I'm going to check out your Web site. I want to learn learn about it. I want to congratulate you on your Web site. Dr. debt-free dot com. It's awesome. I think there's a lot of information on your Web site. Your blog is amazing. It's very well-written. And you have a lot of podcasts that you've been on. And I think you're a wealth of information. What kind of what kind of ending advice would you like to give kind of to a physician or a dentist who's kind of mid-career and they're just kind of struggling with this whole pandemic right now, financially speaking?

Jeff:
Well, hope, hopefully, that you kind of look at where you're lacking in. And it it's a wakeup call, you know, for those that don't have much of emergency fund. Soon as you get back to work, I would focus on that, really building that up before you start doing anything else. For those that are sitting at home, not working, not seeing patients. Because they only have one stream of income. Maybe you need to focus on once this is all over. Looking at getting some alternate strains of income, passive income. If if any of your listeners would like I have a free god on my Web site that they can download and it and it basically talks about how to create passive income with real estate syndications. So if they're interested, it is go to debt-free d.r dot com slash free God. There they can they can download it and they can learn that'll be. They'll be there like the first start to start their path with passive income.

Docofalltradez:
Excellent. Hey, Jeff, is that the best way to get a hold view is debt free? Dr. Dot com yep.

Jeff:
Debt free d.r dot com or Jeff Jeff at debt free d.r dot com.

Docofalltradez:
Excellent. Well, hey, Jeff, I want to thank you for being on the show. I really appreciate it. And I look forward to working with you and learning a lot.

Jeff:
Thank you. Thank you very much. And keep up the great work with your website and your podcasts, too, as wealth of information there.

Docofalltradez:
Well, hey, I appreciate it. And just to let everybody know if you'd like to get a hold of the show notes, some of put all the links that Jeff mentioned in on my Web site, doc of all trades and the physician negotiator dot com. You could. You'll have all the links there. And again, we're on the Apple iPod. Apple podcasts and. Great to have you. Thank you for listening. And hope to see you soon. Thank you for listening.

We hope you enjoyed the Physician Negotiator podcast, our show notes and other resources.

Please visit the physician negotiator dot.com.

Quickly and accurately automatically transcribe your audio audio files with Sonix, the best speech-to-text transcription service.

Sonix uses cutting-edge artificial intelligence to convert your mp3 files to text.

More computing power makes audio-to-text faster and more efficient. Are you a radio station? Better transcribe your radio shows with Sonix. Create and share better audio content with Sonix. Sometimes you don't have super fancy audio recording equipment around; here's how you can record better audio on your phone. Manual audio transcription is tedious and expensive. Do you have a lot of background noise in your audio files? Here's how you can remove background audio noise for free.

Sonix uses cutting-edge artificial intelligence to convert your mp3 files to text.

Sonix is the best online audio transcription software in 2020—it's fast, easy, and affordable.

If you are looking for a great way to convert your audio to text, try Sonix today.

  • Facebook
  • twitter
  • Pintrest
  • linkedin

YOU MAY ALSO LIKE

No Results Found

The page you requested could not be found. Try refining your search, or use the navigation above to locate the post.

YOU MAY ALSO LIKE

No Results Found

The page you requested could not be found. Try refining your search, or use the navigation above to locate the post.

0 Comments

Submit a Comment

Your email address will not be published.

Pin It on Pinterest

Share This