#159 How Physicians Can Get Started in Passive Real Estate Investing

Before we start this week's episode, I just want to say thank you so much from the bottom of our hearts here at passive income MD. We hit our 1 million downloads mark this month. It's a huge milestone, something we've been working towards the last few years. This was a podcast that just got started to serve our community. We didn't know what would happen with it and we hit 1 million downloads and we couldn't have done that without you tuning in each week from your car, walking the dogs, and in between cases, sharing it with others. And we want to thank you so much. Please continue to leave us those amazing reviews, listen in and share it with people that might find value from this. And again, thanks so much. We're going to bring you some awesome things in the next couple months. That's something I want to share with you. Right now we're going to be going over some of the fundamentals of passive real estate. So if you're just beginning to think about investing, thinking about jumping in, need a refresher to reinspire you, this series is is for you. So stay tuned. Welcome to the Passive Income MD podcast, where we talk about creating your ideal life through multiple streams of income. I'm your host, Peter Kim. If you enjoy hearing about this stuff, make sure to hit subscribe so I can bring it to you every week. Now, let's get on with the show. Now, in this current moment, the market seems to be going a bit crazy. If you're in real estate, you're in stocks. Hearing about all these bank failures, there's probably a lot of uncertainty going on in your mind about where you need to be financially. It's been a long time since we've had to deal with some of these issues. Many of you weren't even practicing yet. Many of you were in your training when the market actually had a bear market, when things were going down. So this is brand new for you. We've lived in this time and we're in fact unprecedented time in a lot of ways. Time of prosperity was credit, money was cheap and all asset values were rising. It was hard to make a mistake, actually, in finances. You just needed to take action to do well for the most part. And so now we've come into a time where things are a bit scary. Things are shaky, interest rates are high, inflation is still pretty high. We don't know what's going to happen with the Federal Reserve. We don't know what's going to happen with the stock market, real estate. And I'm sure in this season. There are reasons for us to be concerned. However, I feel like this is actually the best time to educate ourselves when things are going like this. This is one of those seasons, some people might call it winter in terms of finances. This is the time to educate yourself, to get yourself ready to take advantage of what's about to happen. You've probably heard that saying where people say you should be fearful when people are greedy, and greedy when people are fearful. So. So if you had to say or you had to guess, what period do you think we're in right now? If it were up to me, I'd say we're getting really, really deep into that fearful stage, which is where I believe we are poised as a community. For those who are listening to this, you're not just like everyone else, you are set up and setting yourselves up to take advantage of this next real good run. And I tell people you have one or two of these in your prime, in your lifetime to create lifelong wealth, lifelong stability, security and upside. And, and we're about to come into that time now, so we're going to spend a good amount of time over the next couple podcasts going over some of the fundamentals, make sure we all have a good base to start from so we can again take advantage and take action when these great opportunities pop up for us. So in this episode, we're going to talk about passive real estate investing, how to get started, things to consider. Maybe if you've already been investing for a while, maybe you've started down that path. You didn't know exactly why you were doing it, how you were doing it, but we're going to talk about some of those things today, about things you should at least consider. I'm going to go back to the fundamentals because I feel like without good fundamentals, you won't have things set up and you won't be able to be prepared when things kind of go haywire out there. So, talking about passive investing, I think it's important to talk about what that is when you talk about active versus passive. People have different definitions for that. For me, active investing means really being your own landlord, where you manage, buy, sell, take care of everything in between. Now, you might have a property manager who's taking care of the day to day, but you as an active owner, you need to make sure that this property has a business plan, that everything is happening according to business plan and you're following through with that. You need to do the analysis, work with the debt, handle property management, making sure that they're doing what they're supposed to do. I will tell you the property management is not set up to make you more money. They're there to do what you tell them to do. They're there to make those repairs do the day to day. But from a strategy standpoint, that's really not their forte, or at least they say they will be. But it's up to you to manage the asset and make sure things are working well for you. Hey everyone, I want to share a super exciting announcement. We have a brand new deal that just opened up with Ascent Equity Group, which I'm a co founder at. Now this is a multifamily syndication deal called the Encanto and I think it's perfect for this exact market. It's a class A A location in Goodyear, Arizona where properties are booming and we have another investment in that region that's doing extremely well. Now, you might be stressed about inflation, interest rates and recession and wonder if now is the right time. So I highly encourage you to go to ascentequitygroup.com deal so you can see why this is a diamond in the rough deal that you don't want to miss. Get all the information@ascentequitygroup.com deal. Again, that's Ascent. A s c e n t equitygroup.com sl steal. All right, now let's get back to the show. So active investors are typically very, very hands on. It's your own property, so there's a significant amount of time and effort that goes along with it and the rewards can be there for you. In the end, it's all about control. Since it's your property, since you are the one that owns it, you can decide whether you want to do a refinance, whether you want to buy, you want to sell, you want to fix certain things. You want to spend money here, not spend money here. It's up to you to make those decisions. So with a fair amount of experience, understanding the market, knowing the rest of your portfolio, active real estate investing can be something that you can utilize to really help you get your goals in a very, very quick and powerful way. Now of course, again, that comes with a lot of time and energy investment. Of course the downside is available for you too. So there's a fair amount of risk that comes with active because everything is on you. But again, there isn't reward without risk. So taking an active stance when it comes to real estate investing is something that many people should consider at least for part of their portfolio. Now we a lot about passive Real estate investing in our community because our community members are usually high income professional, they're doctors, they're physicians, their dentists, their lawyers, and they're people that do pretty well in their day job. They know that they can clock in, get paid. Now what they're looking for is more time, freedom. And so they're actually not looking for a day job. In fact, for a lot of these people, they can make more money if they were just able to go in and moonlight, open up their clinic, whatever it might be, than it would be to try to change their job altogether. So for many of them, they want to be able to funnel that income into other income streams and create that passive income so they don't want to put in more time, energy and effort. So usually passive real estate investing is something that appeals to many people in our community, at least for part of their portfolio. What passive real estate investing is, it's usually investing in someone else's deal. Now you might have heard of something called a syndication or fund. Usually a syndication is getting people together, investing all together, usually with a general partner or somebody who's operating it's and then the benefits are spread amongst everybody once this deal does well. Now of course these deal operators, they get paid sponsors, they get paid for operating the deal and doing well for their investors as well they should be because they're taking that time, energy off your hands and you're able to leverage all of their experience, their connections, network to get done what they need to get done. So the best approach when it comes to active versus passing investing really is up to you. Your financial goals, your risk tolerance, your time, your, your level of expertise, how much, all of that you want to put together and spend on your own. That's really up to you. I'll tell you personally, I do have my own active investments. It's a smaller part of my portfolio and over time I've sold off some of these active investments and now majority of my time is obviously having this really, really passive portfolio. And if I'm going to be active in my investments, it's usually helping others in terms of getting into real passive real estate investing in the form of syndications and funds. So let's say for you, you're thinking about getting started passive real estate investing, it's all new to you or you're early on. I've got five tips for you to help you get started down that path. Number one, you got to figure out how much time, energy and money or financial resources that you have to devote to investing you need to look at your financial goals and if you haven't done that, that's always the first step. Figure out where you want to be in 1 year, 3 year, 5 years, 10 years. How much passive income do you want to have? Come up with a number. Because once you have a number in mind, you can really start racing towards that goal. You can figure out your strategy beyond that. Also figure out your risk tolerance. How much do you want the risk to be all on your own? Meaning that you want invest with someone where they're going to be, manage most of the risk themselves? Or do you want to also take on that risk and you're willing to do that in terms of the financing and taking on that debt. And if that's okay for you, again, you should get the upside from that. But make sure that you understand what your risk tolerance is according to where you're at right now, especially financially. And ultimately figure out how much money you have to invest. I would say oftentimes, again, this is general case. If you're going to buy your own properties, you're going to have to put a lot more money down, meaning that there's a down payment you need to put down. But oftentimes that amount is bigger than maybe an investment you might make in a syndication or passive real estate investing. That often is like 25,000, sometimes 50,000 or a hundred thousand. With one of my companies, Ascent, our minimum is usually somewhere around 35,000 at least at this point. And so you have to absolutely figure out how much money you have to invest in these type of investment. Hey everyone. Today I want to tell you about Trion Properties. They're a company that's doing some pretty amazing things in the world of passive real estate investing. You know that Tryon Properties has a portfolio of properties valued at over $500 million. They're a reputable firm with a proven track record of generating strong returns for their investors. Now they specialize in buying and renovating multi family properties to provide high yielding passive income for accredited investors. But what really sets apart Tryon Properties, it's a resident focused approach to renovation. What that means is that they concentrate on cosmetic upgrades, mild infrastructure repairs, while adding high value amenities and communal spaces designed to appeal to higher paying residents. What's more is that they take what's called a vertically integrated approach to maximize return on investment for you, for them, and to minimize unforeseen costs and construction delays. This makes for a smooth investment experience. So if you want to learn more about trying properties, go to tryon properties.com that's T R I O N properties.com again, that's trionproperties.com now back to the show. Thanks. So once you put all of that together, then you could start going on to tip two, which is do your research. You got to do your due diligence, meaning that you've got to figure out who's doing these and putting together these deals. How do you find that? You've got to go out and seek other people who are already doing it. That's what I find is the easiest way. Instead of you going on Google doing your own research again, time is a limited resource for you, so figure out how to leverage your time the best. I would go to people, communities, resources that already have curated these resources for you. People that they trust and maybe you trust them. That's a great place to start. Especially if you know somebody firsthand who is investing with a certain company. They've had good experience, they, they've done well. That's a great place to start because you know that at least on one level that you can trust them again. But you have to do your own research yourself. You have to verify on your own, do that research. And this is probably where you should spend the majority of your time. Because once you start investing, you're on the road with them, you're kind of tied to them for however long that investment might be. Maybe it's three years, maybe it's five years, maybe it's 10 years. It's like bringing on a partner to your job or your career or your practice, whatever it might be. You wouldn't skip over the due diligence. Once you sign on the dotted line, you know, you're at least on with them for a while and all of the things that go along with partnerships. So I consider investing in passive real estate, investing in these syndications, like a partnership that I'm making. I'm giving them my funds, my income, so they can go out and make more money for themselves and for us as well. Everybody wins, but you have to know who you're investing in and why you're doing it. So that's tip two. Tip three. You have to actually understand the basic strategies of passive real estate investing. Educate yourself on the different types of investing, whether it's single family, multifamily, short term rental syndication, REITs, office, medical office space, self storage, mobile home parks. There's so many different ways to get involved in terms of an asset class. And then you got to figure out the structure of these deals, whether you're coming in as simply as a limited partner, whether there's something called preferred equity, what the loan is like on these type of deals. The there's a lot to learn. But I can tell you from doing this enough and having educated thousands of people in this area, it's not as hard as what you've learned to get where you're at. Meaning that I know everyone I'm talking to right now, and yes, I'm talking to you. You are successful in what you do and it took a significant amount of investment of time, energy, studying, spending weekends and nights in the library, in the hospital, wherever it is, just working. Well, let me tell you, it's not as hard as that. Meaning that it won't take that much time and energy. So to learn how to at least do the basic due diligence and understand these deals, a lot of the math involved in a lot of this is very basic math that honestly my 9 year old could probably learn in a lot of ways. But again, it's about how you put all of that together to figure out whether this is a good deal or not. So understanding the mechanics of a deal are absolutely important. There are resources that allow you to do that. We're going to be talking about a lot of that over the next coming months. We obviously have our course, Passive Real Estate Academy, but we also got a great community of people who can share whatever they learned with you. So I encourage you to get in there and start asking questions. Without asking good questions, you're not going to get great answers. And that's where it starts to learn about how to do all this. I know it can seem intimidating at first, but once you get into a few of these deals, once you see a few of these case studies, you're going to start to learn. And so the quicker that you learn how to do that, the better off and the quicker you're going to be able to take action, especially when these opportunities do come. And if I have to tell you, I believe that, that there are a significant amount of opportunities that are coming over the next six to 18 months and you want to be able to take advantage of those. Tip number four, you don't have to do all of this alone. Learn from the experience of others. Find that community of people who are already doing this. There are investor clubs out there. We have our investor club as well as our Real Estate Insider newsletter. Read some books on the topic, read blogs, listen to podcasts, take a course. If you feel like you don't have the time to learn it and search it all on your own. You know, we obviously have our Passive Real Estate Academy. There's a wait list for it. You just go to passiverealestateacademy.com just for being on that wait list. We're going to give you a ton of resources. We're going to do some Q and A sessions all throughout the summer. If you'd love to be a part of that, join our PREA wait list. Again, there's no obligation there, but you can learn a lot from it. Figure out and talk to people when they started investing, why they started where they are now, and what were the resources that helped them get where they're at. Meaning what did they learn from who did they learn from, what kind of conferences did they go to, what events, what do they do? All of this Again, the faster way to learn on your own is to learn from other people who have successes and who've had made mistakes. Sometimes a better way to do that is to learn from other people's mistakes because that will save you a lot of headache and honestly, it'll save you a lot of money. Tip number five Take action as soon as you can. I know this is a tough one because this is a scary market to be in. But I promise you I when it gets scarier, meaning that there's more fear in the market, the news of everything falling down. I know that may seem scary right now because of everything that's happening in the market. In fact, I will tell you it's going to get worse before it gets better. Meaning that the news you're going to hear out there about apartment buildings or real estate, about finances in general, it's going to seem like it keeps getting worse. I'll tell you that means that that is where most of the opportunity is. If you talk about the greatest transfer of wealth, it always happens in recessions and it happens at down times when people are scared, when they're selling off their assets, meaning they're selling their properties at a discount and other people are able to pick them up. I will tell you if you don't take action or you haven't taken action at least up to this point, or very soon you won't be able to take action or have the confidence to do so when it does come time. So my recommendation is take some sort of action. Maybe it's a small amount. Take a nibble to learn. Maybe you see it as an investment in your education or versus you have to make that perfect investment to make a lot of money. I'll Tell you, when I jumped in, I kind of dipped my toes in and I felt comfortable with that because I knew that I would learn with that, but it wouldn't impact my family in a negative way. And I think that's what we all want. We want to be able to take care of our families, do well by them, do well for ourselves, do well for our future without making a lot of mistakes. But I will tell you, nobody investments bats a thousand mean that nobody is perfect. They learned to make their small mistakes early on, learn from others mistakes, and that will reduce the amount of significant mistakes you make later on. And that will help you in your investing, to help you accelerate to get where you want to be. So having said all that, take those five steps to figure out how you can get started. Investing in passive real estate, investing in syndications. It's my absolute belief that for many people out there, this is a fantastic way to build that passive income, to leverage all of that income and that experience that you've already brought into the game and the network effect, the people that are around you, the opportunities that you have already created for yourselves just by being part of this community in general. A lot of that can be, a lot of that can be leveraged to help you create that passive income. I tell you, it starts one step at a time. Maybe it's 100 bucks here, maybe it's 500, but then it starts to get significant for you. But it doesn't happen unless you get started. So stick with us over the next couple months as we provide that education and that foundation to help you get get confidence to take action in this market. I'd love to see our community really take advantage of this, do well. And I believe this time is your opportunity to really get started, build that strong foundation and get you set up for the future. I'm so excited about it. I hope you are too. Thanks and take care. Hey everyone. I'm excited to tell you about PIMDCON, the Physician Real Estate and Entrepreneurship Conference happening on September 21st through 23rd. This year, as always, we're bringing together some of the smartest minds in real estate, investing and entrepreneurship to speak at this event. Now, what sets this conference apart from others goes way beyond the speakers. It's being part of the community that's created at our live events. Now, this year, we're offering specific tracks focused on real estate investing or entrepreneurship acceleration so you can customize your experience and focus on what matters to you the most. Now, our expert speakers, coaches and workshops, they're going to help you gain the knowledge and confidence you need to take your next steps forward and towards achieving financial success and independence way beyond medicine. And it's not just about the information you're going to learn from the speakers. It's about the conversations you'll have with other attendees that I know will spark new ideas, inspire you to take action. So every year people leave PIM Nikon and they launch their real estate investing careers while others grow their portfolio in exponential ways. I mean ways you wouldn't have even imagined. Now this year is going to be no different as you leverage your big ideas to expand your vision for what's possible. So join us in person in Los Angeles on September 21st through 23rd. There's also a virtual option available for those who can come live, so don't miss out on this opportunity to connect with a community of like minded individuals and gain practical skills and knowledge to help you achieve your financial goals. Save that date September 21st to 23rd 2023. I'll see you there. Thanks everyone. Bye.