Interview (recorded Nov 18, 2022) with Dr. Mary Lou Roper, a cardiac anesthesiologist who began passive commercial real estate investing to create supplemental income and more time. She describes starting with a $25,000 investment (Nov 2019), receiving a K-1 showing a paper loss of $15,900 via depreciation, and later realizing a 38% return on a subsequent deal in about 20 months. She favors multifamily investments, values GP skin-in-the-game and proactive communication, uses a self-directed IRA/solo 401(k), and plans to continue both passive LP roles and some GP involvement. Call-to-action: visit pivotalrealestateinvestments.com for opportunities.
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Hi, this is Jenny Bolling with Pivotal Real Estate Investments, and I am interviewing Mary Lou Roper.
Hi, Mary Lou.
Tell us about yourself.
I am a physician. I'm a cardiac anesthesiologist. I've been practicing, gosh, 25 years or so. Trained in Hopkins and moved down to Corpus Christi, Texas. And I've had a busy practice. A lot of success, helped a lot of people in my career. But medicine's very demanding. It has a lot of strain on my time. It's gotten more challenging with COVID I've really had some personal changes, some health issues, and things that have come up in our family that really put on my heart that I needed to find a way to create some more time in my life, yet also have the ability to still provide for my family. We're gonna still have some needs that come up in these next few years that we haven't gotten beyond. And so I'm just trying to find ways to shift a little bit of what I'm doing, create some income that will give me more freedom. And so I started some real estate investing just a couple years ago, and I'm very excited about that. And as you know, it's a great opportunity. Right, Right.
Yeah. And I'm going to take you back for a second. I thought that was great that you said your heart was talking to you, because. Tell them what you do again.
Yeah. So I'm a cardiac anesthesiologist. Right. Yeah. We put people to sleep, but most importantly, we wake them up at the end of their heart surgeries and get them through. And we really. We do help a lot of people. We impact a lot of people's lives.
So I know that firsthand, as you know, because I've had a heart operation, too, so that's terrific. And so she's in the same situation that many of the people I know are in as well, where supplemental income is a way to start, you know, and to figure out what's going to help you most. So tell us about what you've invested.
In.
Just real, real briefly. I mean, one of the keys is in my line of work, if I'm not working, I make no money. And. And again, it takes a lot of time to do what we do. And I really realized that I needed to get to the point where I'm replacing some of my income. That's it. I want my money working for me. And so that's been the journey of mine. I started a couple years ago with some simple passive investments. I got hooked pretty early. I was nervous. I didn't know that much. I had a little bit of knowledge about the opportunities. I personally had some success in real estate before. I believe in real estate as a hard asset that does tend to grow over time. So I felt comfortable with that concept. I didn't really know that much about getting involved in bigger projects, owning small pieces of larger projects. And so I was a little hesitant. And when the opportunity came up, I just put a little touch of money in. So I asked, could I put 25,000 in? I think they wanted 50. They said sure. So took my money.
You're lucky there.
Yeah, I was. I was.
That doesn't always happen.
Exactly. And. But $25,000 in. I think it was November of 2019. And I was hooked pretty early because my very first, you know, my first exposure interaction with them was when I got my K1 in January, which is like three months later. And my K1 actually showed a negative $15,900. So essentially I had a tax break for that year. Right off the bat was about two thirds of my investment.
And was it depreciation?
Yeah, it was depreciation.
So it wasn't a real loss. It was a paper loss.
It was a paper loss. And so that's something that's going to help me on my taxes. And it was sort of a nice little fringe benefit. You know, that's going to. That's going to circle back around. That deal hasn't gone full cycle yet. But my next deal was an investment that turned around in just 20 months. I think the projection was to get almost a doubling. Not quite. We didn't quite get there. But in 20 months, I got a 38% return on my money. And honestly, I just took that money and put it right back into another deal because, you know, why not, if you can grow like that? It was awesome. So I'm pretty committed to the Multifamily space. Now I'm all in. Yeah. I'm very happy that I moved money last year before the stocks started taking their goals.
Right.
I'm doing what I could, so.
And did you go into a self directed ira?
I sure did. Okay. And that's.
I've got a couple YouTube things on that to explain to the audience what those are. And I do have a solo 401k, so I have a checkbook. I can just, you know, do it quick. The communication with your, your investors for the, the operations team of those investments, was that good?
Yeah, yeah. I would say one was excellent, one was sort of moderate. Okay. So I think it does depend on your teams starting out. I didn't know as much as I know now. So there are certain things that I think I look for now that help me make better choices. And I think one of that is I do like having a personal relationship. So I don't particularly look for the crowdfunding type of style. I want to be involved with somebody that I can pick up the phone, have a conversation with. I think in the investment that was less communicative. When I pick up the phone call, they did answer. I just think they could have been a little bit more proactive in giving us information instead of us having to seek it out. The other one has been great. But at this point, I've now invested a lot of time and energy into educating myself on the space, meeting people, learning how the system works, finding the priorities that are part of what I want to focus on, and then finding people that are sort of like minded and I know approach things in the same way. And so having that ability to have the personal relationships and picking like minded leads, I think is helpful.
And you want to be on a gp, a general partnership side of it as well as limited partnerships going forward. Or is it just one or the other now?
No, no, it's both. It's absolutely both.
Same here, same here. I like both worlds. As I move more and more into retirement, I want to be able to just make that income passively and.
Yeah, yeah, absolutely. I am going to continue to passively invest with the right teams. I'm gonna put as much money to work as I can. And I don't think. And I don't want to do everything by myself. One of the things I like about multifamily is it's a team sport.
Right.
It is some high quality people. So I've really enjoyed the opportunity to connect and learn and work with other people in this space. And I Also think that, you know, there's opportunities. I don't know everything about every other market, but there's some great opportunities and markets that I don't know as much about and I'm willing to invest in it. So there's some criteria that I might look for. And one of the things I might look for in my passive investing is to make sure that our goals are aligned.
Yeah, Critical.
Yep. And I think one of the easy ways to know if that's true is how much does the GP team have invested in the deal?
Right.
I mean, it's an easy one. If it's a five million dollar raise and they put a million dollars in, you know that they're going to deliver on your investment because they have a lot at risk. And so, you know, that doesn't happen every single time. But honestly, when you see and you hear that, you can go, okay, I think that's a deal that I might want to get involved in because yeah, they're going to be working it, they're focused on it, they believe in it.
Right, right.
Yeah. And on the DP side, you know, I love the real estate, so I love the challenge, I love the partnering, I love the asset class. I love the fact that we get to make lives better for tenants. I mean, you're not just making, you're not just making a win for your investors. You're actually changing everybody's lives. You know, you get to improve a property, you know, make a better asset, make a better home for the people living there. And then at the same time we can, we can benefit ourselves, our investors and really just improve communities. So it's exciting.
That's actually my tagline, making a difference for investors and communities.
Oh, that's awesome. I didn't even know that.
I know, I know. And I should say we are actually at a conference right now. So you're seeing people walk back and forth to the restroom. We're in the hallway. And so we've been in a room full of 140 investors pretty much and taking in lots of knowledge and that's.
What it's all about.
So thank you very much. I appreciate you coming. Anything you want to add for your audience too?
No, I mean this is a great journey. I'm super excited that I found the multifamily investing, real estate investing. And not just multifamily, that's one of them focused on at this point. But there's some other great opportunities and I wish I'd have found it 10 years ago. That's what I would say and with.
That, what I'll share, since I've been in real estate so long is everything has a life cycle. So I'm keeping my eye on other things as well, too. This neighborhood, shopping centers and industrial. I've always loved industrial. And so those are. Those are two of the biggies that to watch. And offices, we know they've been. They've been kind of some bargains.
There's some bargains. Yeah.
Their vacancy rates are up there enough that they're bargains, but location, location, location. So you just got to do your work. And that's why the property aspects, the team, and then the business plan are the three prongs that I keep nailing away at.
But, yeah, so I'm excited to keep learning. Yeah. We're going to change our lives and lives of other people, too.
So thank you very much.
Yep. Thank you.
Well, I hope you enjoyed that.
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