#195 How to Grow Your Real Estate Portfolio

Welcome to the Passive Income MD Podcast, where we talk about creating your ideal life through multiple streams of income. If you enjoy hearing about this stuff, make sure to hit subscribe. Now, let's get on with the show. Hey, Pranay, how's it going?

Hey, Peter. It's going super well. How you doing?

I'm doing well. I mean, just excited to talk to you about this stuff because I get questions about you all the time, and there have been people who have been part of our community, and they're wondering how you were able to grow and build in such a short period of time. And we're going to explore some of those things today, if you're cool with it.

Yeah, yeah, yeah. You know, it's funny because I really don't feel like I've grown that much, but anytime I have to write up a little bio or anything like that, you know, I have done a good chunk of stuff in the past couple of years.

I mean, I think for some reason, I think physicians are just like that. They forget where they come from or, like how much they've done, and they're always looking to the future and. And so they kind of always thinking, oh, I haven't achieved enough or done enough, and they kind of do that. I mean, do you find that to be the case for yourself?

Yeah. One of the things I always tell people is to look, look three, five years in the past, and most of us would have killed to be in the position we're at right now. It's just. We're just so used to moving the goalposts, right? Getting into medical school, getting into residency, internship, fellowship, all this other stuff, that anytime we get something, we're, like, happy for a second and we just move on. And I do think that's actually a recipe for burn. So I recommend to a lot of my coaching clients, like, hey, take a second. Appreciate what you've done already. And I bet you you are a badass.

I mean, that's such a great mentality to have, and I know that would benefit so many people. I mean, again, I talk to so many people who are curious about how. I mean, not just about building a real estate portfolio, but how do you really grow that? Because I think, I mean, let's see, physicians are ambitious at the core. We're ambitious people. And so some people are content to get four units like you started. We'll talk a little bit about that and just stack on a unit here or there. But then there are others that really want to accelerate and they want to grow Their portfolio, create more income, create more impact, all this stuff. So I want to unpack that a little bit with you today. Where are you actually today when it comes to your overall portfolio, when it comes to real estate?

Yeah. So along with you, you and I started a company together. We own over 1500 units. We won't look at anything than 100 units at a time. Multiple times. We've been buying 2, 300 units at a time. And it's, of course, with a lot of other people, but I think there's a couple parts of that, right? And it's really four things that I work with people to get past. First is mindset, right? It's, of course, the most important. And you know, in the past, when I was younger, anytime a course or a book would have mindset stuff, I just skip it. But it's by far the most important thing, especially for physicians. I find that most of the time we just get in our own way, right? Number two, to be, you can't just go from four units to 100 units in a day, right? You have to educate yourself and build an authority, just like Peter has as passive income md. You're like, oh, yeah, you know, I've read his stuff. I've listened to his podcast. I trust him for when I'm trying to create some more income. So you have to start doing the same thing, putting yourself out there. And I call that authority building.

Right?

We like to work with people that I trust. A lot of times I am on the phone with people and they'll be like, oh, yeah, I'm going to invest. Like, I trust you guys. I was like, no, like, I appreciate that trust, but you actually, actually should hold us to a higher standard, and I want to be held to that. But when you've built that authority, then people trust you and it's easier to get larger deals done. And number three is how do you find good deals? Or how do you find what to do next? And I think that's really important because you don't want to just spend your money on anything, right? If you're. If you climb up a hill and at the end you realize it's the wrong hill, there's very few things worse than that, right? You've just wasted your time, your effort, but at the time, it might feel like the right thing. And then lastly, especially in real estate, it's called asset management. It's like, how do you make sure that this deal is doing all the things that we said it will, right? Because it's easy to Buy something, it's easy to get into something. But the day to day is what the, what is the most important. It's especially times like now, which we've seen are very volatile. A lot of the small things make a big difference in the future. So I find that many other programs, many other coaches don't really focus on that. They're like, hey, you build your authority, you fix your mindset, you find a property and then they're ghosting you. Right. But I think it's really, really important to make sure that you're running the property well. And I find that most people don't really teach that because that's a hard start. Right. It's not the fun stuff, it's not the sexy, it's not the, oh, I bought 200 units. But it's, here's how I talk to property managers, here's how I run the properties. Because when we do our, our deals, just as importantly as having good returns to our investors is taking care of our tenants. So we want to make sure they have a very safe and secure place that they can call home. So asset management's very important. So by really focusing on those four, you're able to scale past four units. I mean, it's, it, when you really look at it under a microscope, it's the same things I do for the four units that I do for the 200 units. It's just working on your mindset and kind of learning the skills and building a team to help you with that.

I mean, that's, that's all amazing stuff. And like, for a lot of people that still, I mean, again, for a lot of people that might seem a little unattainable. So I want to kind of go through your journey a little bit. Like, you know, you had four units and you started with that and that was a great place to get started. You got your own personal portfolio. I know this because I've known you for a while. Like, what, what went off in your head where you decided, okay, I want to build this and grow it bigger. Like, what was really the motivation behind all that?

Yeah, so actually, you know, taking in a step back, like four units as my first property a year out of residency, like, where did I know how to do all that stuff? I didn't. I figured it out. Right. I literally went to the closing and did the last tour and I was talking to my real estate agent, which fortunately was my sister in law. I was like, I have no idea what I'm looking at. Like, is this good? Like Is that bad? And the appraiser was like, hey. Or the, the person that looks at everything was like, hey, this sucks, this sucks. And I like pulled my sister in law aside and I was like, what, what am I buying? She's like, no, like we pay him to say everything sucks so we can get a discount. And we did. So I had no idea. I knew that real estate was a good asset class. I knew that eventually I'd figure things out. And really, you know, we talk about mindset. Like you can figure things out. Like literally in res, in rotations, you would do cardiology one month and we got in another month and then opto and surgery. Right. And you would have to learn 70, 80% of everything you had to know in that month. Right. And so physicians are just great learners and able to soak up this knowledge. And so I realized, like I was doing a lot of work for my 4 unit. I got lucky. I found it in the first couple months. So after that I was like, okay, I'll buy one of these a year and in 10 years I'll be able to have enough money to cover my salary. And thought that was relatively modest, but spent so much time on trying to find my second property in Los Angeles, which is a tough market, I was thinking there had to be a way to do something else. And that's when I found syndications and really being able to buy these properties alongside other people. Because very quickly when you start buying your own properties, people will come to you. I know people do this all the time to you, Peter. And probably a lot of the audience here where if you buy one property, people will be like, hey, how's that property doing? Could you help me? Could you tell me about Zillow? Like, what do you think about this property? And it's just getting a couple people like minded individuals together, finding a property, buying together. And you know, fortunately we were able to do that relatively quickly. And you know, we've partnered with over 900 physicians so far.

Hi everyone. I'm super excited to tell you about PIMDCON, the Physician Real Estate and Entrepreneurship Conference happening on September 26th through 28th this year, 2024. As always, we're bringing together some of the smartest minds in real estate, investing and entrepreneurship live to speak at the event. Now, I've been to a ton of other conferences, but what really sets this conference apart from other conferences and this is totally intentional, it goes way beyond the speakers. It's being part of the community that's created at our live events. We have different tracks focused on real estate, investing or entrepreneurship so you can customize your experience and focus on what matters to you the most. We have a ton of expert speakers, we have panelists, we have workshops and masterminds that will help you gain the knowledge and confidence you need to take your next step 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're going to have with other attendees that I know will spark new ideas and inspire you to take action. Every single year, people leave our conference pimdcon and they launch their real estate investing careers, while others grow their portfolio or expand their entrepreneurial ventures in really incredible ways, even in ways that none of us would have imagined. So this year will be no different as you leverage your big ideas to expand your vision for what's possible. You just have to show up. We're so excited to announce a new location for our annual event. We're doing it different this year. We're also offering in person specials and tickets, especially if you're getting your tickets early. So join us in person this year in Dallas, Texas, the middle of the country, so everyone can make it on September 26th through 28th. Just so you know, there's a virtual option for those who can't join 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 achieve your financial goals. I'm excited to see you there. Click the link below to learn more. I'll see you there. I mean, again, for a lot of people that are just starting that that is the ultimate goal. Like I want to scale, I want to grow, I want to build all that stuff. But what were some of the first steps that you took to make that happen? Again, you mentioned the four things, but what are some of the first steps that you took to, to make that, to make that a reality?

So fortunately, you know, you and I work together, but you know, the first, first thing was coming to you and being like, hey Peter, how do you do it? And so I would say, you know, mentorship and coaching is really the most important part because I have no doubt I could figure this out, just like a lot of your listeners can. But I actually think you could probably get a medical degree from YouTube if you know the right stuff to look at and you're, you have enough time. But what a mentor, what a coach helps, is they're able to really help you. Specifically Individualize. So for me, it was you and Minth, our other partner. And so I think the first thing for people, especially if they're relatively new or even people that are at best to find someone that can do it. And not just anyone, because there's a lot of people that are doing it. I think someone that shares similar values, because, you know, there's a lot of ways to do real estate, a lot of very profitable ways, but also a lot of shady ways. So I think finding someone that shares similar values, has a similar background, and, you know, I'm fortunate that a lot of physicians come to me to. To help them kind of scale up. For example, someone just bought a 32 unit and loves it, and she's like, okay, now how do I buy 100, 150? So if people are interested, come to me, come to other people that have a similar career projection or trend and have similar values. And I think that's the most important thing. Share kind of the same perspective on the world.

What do you think the motivation is for those type of people who come to you and say, I want to grow and build this, like, what's. What's really behind it for them?

So I think in the beginning, it's always, you know, financial stability, right. Because I don't know about you, medicine has felt not as stable, right. I tell a lot of people in the past that one of the hospitals I worked at kicked out all the hospitalists. I'm a hospitalist, and I had 90 days to find another job. And people know that credentialing takes three, four months. So potentially it could have been a whole month or two out of not having money. And fortunately, I had real estate money, and I was credentialed at most multiple places. So financial stability, I think, number one, but number two, and a very close number two, I think the challenge. And, you know, I've been a hospitalist for about seven years, and, you know, I feel I relatively stable in what I've seen. You know, not many stuff surprises me any day anymore at the hospital. And so I think we all, especially as physicians, we want to be striving for something, so they want to try something different. And real estate, it's really a fun puzzle because you get to use. You get to do math, you get to do other parts of your brain. You get to. You talk to people. So I think there's a lot of crossover, and people want to see that. They get the excitement of being able to really create a difference. And, you know, I had someone talk to Me, she's like, hey Pranay, like I want to buy some properties but I'm worried about being a slumlord. I was like, yeah, okay, good. Like don't be a slumlord, right? So she is actually the perfect type of landlord because she really cares about our, about her tenants. And I think that's why I really want to see more physician landlords because they will really take care of people. Just like I think we should have a lot more physician led businesses.

I mean, what do you say? And again, you probably heard this before, that there are people who do this full time or this is what they do primarily. Like what do you think it is about? Like at least how do you feel about. I mean again, you're biased I guess because you are physician doing this. But other physicians like not only, you know, buying properties, that's one thing from their, on their, on their own, but then also physicians getting and leading syndications and investments and things like that. Is that something they should even think about getting into?

This is something that always pops up, right? There's always going to be outliers, right? I'm just like, there's doctors that probably shouldn't be practicing medicine. And we all, we all have seen a couple of those. Fortunately, it's a very small percentage. And it's the same with getting into real estate and getting into syndications. I, I personally feel, and the people that I coach and work with me, I just feel like they care more, right? They care about really taking care of their tenants. For example, we're adding financial education at a cost to us, to our tenants, just so they get better at like doing their retirement. One of our places, we're adding English as a second language. And it's a lot of this stuff that we see at the hospital that we really take care of our tenants and we want them to just really succeed at life and if they can afford a house, even better, right? We want to see them excel. And I find, you know, not to say we're the only people that care. I just find that the physicians that I've worked with and talk to, they just care a lot more. And you know, there's these so called real estate experts and now that I've been in the business for over five years, like really deep into syndications and real estate, I find that, you know, you could be in business for 20, 30 years and you know, a lot of people have just gotten lucky and there's a lot of things that we've done, especially in 21, 22, when the real estate market has tanked, that has been way different and has helped us survive. Not only survive, but thrive. We are one of the few companies that are hiring right now. We, we did one of the largest deals in all of the US in 23, it was 66 million. When people were doing, having trouble buying $20 million properties, even large companies. So I, I find that because of our perspective. And you know, the last thing I'll mention is that disruption always comes from outside the industry, right? Talk about Ford, talk about Uber, talk about Airbnb. Always someone from an outside perspective that comes in and is able to disrupt a company that's gotten a high office of the, you know, just being conservative, being traditional and having changing things. It really takes someone from outside the industry to come in and make things better.

What do you think about doctors? Like in like marketing or promoting to other doctors? I mean, is that a tough thing or has that been a tough thing for you in particular, knowing that you're, you know, you're a physician and you're, you're working with a lot of physician partners and investors and things like that. Has that ever given you pause or how have you kind of dealt with that?

It's funny, I actually saw an Instagram ad today by a physician and it had another fake doctor in, in a white coat. But I, you know, it says MD or says Dr. In my ads, but it doesn't say, hey, I'm a doctor, trust me. It says, hey, here's why this deal is good, Here is my perspective, here's why I care more. And I think that we like to work with other people that are like minded, just like anyone else, right? If you're, say any, like if you're a CrossFitter, you like to work with other CrossFitters, right? Any, any type of group that you're in. And unfortunately, and this is for every other group, there's some people that take advantage of it. So I think that, and this is what I tell people that I work with. Like the deal should be good regardless of who you are. Right? The deal should stand on its own laurels. And that's why that the finding the deal and running the deal are so important and you just happen to be a doctor. So I, I would want to say compare me to any real estate professional, like compare us all. Like there's nothing like the deal. My deal stands by itself. And I think that's really important because what happens and what I find, people will rely on the MD and the Dr. Part of their Marketing to sell. And I think that ends up being a little bit bad because, like, okay, whatever, like you're a doctor, like, tell me about the deal, tell me about why or what does. How does being a doctor make you different? Right. Other than the fact you're a doctor? So I think there's ways. And we do, you know, we do a lot of marketing because not many people have heard about us, right, because we're relatively new, like five years old. And the percentage of doctors that invest in real estate, it's like 2% in the U.S. so it takes a lot of U.S. marketing, going to conferences, talking to people, but I think there's ways that we can do it in a way. And you know, when I tell people, when I talk to people, I was like, they're like, hey, pranay, I don't want to be sleazy. I don't want to be shady. So don't. Right? And the fact that you're thinking about that really means you have to go out and be that because there's going to be other people that do it in sleazy ways. And the fact that you want to become better means that you're probably going to be a better real estate operator and people are going to be better off investing with you.

I mean, I think that's really important. I think you nailed it on the head that, you know, as a physician, I mean, hopefully, and this is how I feel anyways, that you're held to a different, I mean, in terms of standard, at least from a moral standard, you're held to a high. You should be held to a higher standard, especially when you work with other physicians. This world is small and this community is small. So I think reputation can be made, actually can be broken really fast. Everyone knows somebody. And so, like, making sure that you do right by people, I think is the most important thing, especially in our community. Now for doctors, do you think it's an advantage or a disadvantage in some ways to try to even go into the realm of real estate? I mean, again, it's like not something that we're taught in school. To many people, it might seem a little difficult to at least go and do that from a professional standpoint. Like, you know, do you find that to be an advantage or disadvantage that your physician, not only in terms of knowledge and experience, but also in terms of time and bandwidth.

So our, you know, our very first deal, we were a very small part of a very large deal. And that's actually how I recommend people joining in where you're able to learn the ropes, right? I'm not telling you to do a $25 million raise that we did last year. So it's, it's important to learn the ropes, but it's, you know, you're only going to learn so much from a book. You know, you read, go on Amazon, get the top two books, and if you read those on real estate, you'll probably learn 80% of what you need to know about real estate. And the rest is just learning by doing. I mean, like, even look at residency, right? We spent two years in learning, kind of the background of education, and then we spent two years in clinicals and three to five to seven years in residency. So even in medicine, we spend a lot more time doing than we learn, right? And if you really look at your actual specialty, right, like anesthesia for you, you spent like what you read, like one book of anesthesia during, during medical school?

A few books, but yeah, yeah, yeah.

So a couple books, right? So what, maybe a couple months. But residency, five years, right? Clinical, all those anesthesia rotations you did. So medicine is actually the same way. We just forget that, right? We forget that there's not much book learning even in medicine because, you know, back, back in the day, even they realized that you got to be out doing stuff. So read a little bit and then go out doing. But here's the thing, and a lot of people talk about the 10,000 hour rule, but if you actually look at the original study, the 10,000 hour rule was focused on Juilliard, which is a top level elite school, and it's 10,000 hours for them. And, and this is the most important, they had specific feedback by people that are experts in their field. So not only do you have to go out doing, but you need someone to really be helping you looking over your shoulder, a mentor coach that makes sure that's able to course correct. Because otherwise, you know, just like they say, if you go one degree on a plane, right? If you go a couple hundred miles, you're going to be way off from where you want to go, even one degree. So it's so important to have that feedback cycle. And I think that's what a lot of people miss, right? They'll read a couple books, they'll get started, and I'll be like, oh, this doesn't work for me. But it's that feedback that you don't have. And I think that's why having some coaching, some mentorship or joining a group of some sort is just so, so pivotal. And it'll save you years and years of trying to figure this out by yourself.

What do you think about the current market right now and what the potential is for people to start now or start soon? Is this something you tell people to wa weight? I know that some people are thinking through the volatility right now. Maybe this isn't a good time to think about scaling their portfolio. What do you say to that?

Oh, man, if I, if I could pick, I would start now. I wouldn't have started so many years ago. But you, you, you have no idea, right? You can only see it in the background. But we're getting deals sent to us that are amazing. And, you know, it's, this is really the best time because what. When you look at things, right, So a lot of people think about real estate and crashes. 2008, 2009, you know, when was the best time to buy actually close to the bottom? 2009, 2010, 2011. Those properties are killing it right now because what happens is the price drops. That's also called the basis, but nothing else. After you pay for a property, the price is locked in, right? Your, your loan, your other stuff can change, right? You could get a refinance. All that stuff can change. People hear about interest rates, but your purchase price, your basis is locked in stone. So right now, purchase prices have gone down a ton. So, for example, the last deal we bought, it was listed for 85 million. We got it for 61, right? So humongous discount. And we're looking at another property, it was bought for 60, and we're potentially getting it for 46. So humongous discount. And that's once interest rates drop, which this is in early 24, it's probably going to be around March, March, April, prices are going to shoot up because those, those are inversely related, right? Interest rates go up, right? Prices go down and vice versa. But we're in kind of a weird time that prices haven't dropped that much. And then, sorry, and I know I harped on this a lot, but other reason for coaching, mentorship and joining the group is that you get access to opportunities that you may not have. So our network is fortunately very large. And a lot of times we get deals that are probably too small for us to do. And so we have a lot of opportunity to send those to other people and they're vetted by us and relationships that we've built over many, many years.

What do you, what do you think keeps a lot of people from actually achieving that or getting, you know, crossing that hurdle? To start to scale, what do you think it is that keeps most people from doing that?

So number one is mindset. I. I can't tell you how many times I hear the phrase pranay. I'm just a doctor. And I'll, you know, I'll look at their. A lot of times it's through emails. I'll look at their little signature. It'll be like, Harvard micro hand surgeon, you know, or like, you know, hobo something, or like, you know, editor, New England Journal or something like that. You know, some like super high award or on the totem pole for medicine. But I can tell you, you know, I don't have any of that. I was like, very in the middle of my class in medicine. I'm a hospitalist, so not some super specialty, but anyone as physicians, like, you've gone through so much, like just to get into medical school, right? It's like 5% to get into residency, to survive residency, to become an attending, pass all those stupid tests that they try to steal money from. Just to get through all that. You've learned all these life skills and resiliency that will help you so much. The problem is when you're so deep into one subject, it really feels like you can't do anything else. But instead of, you know, a lot of people say, like, you're just a mile deep. But what I say is, like, when you're a mile deep, you're actually. It's. It's kind of like a triangle. You have all these skills surrounding what you do. I mean, like, talk about, like talk about negotiation, like negotiating with a patient to stop drugs, right? Stop alcohol. That's probably one of the hardest negotiations you do. I. Talking to people. I. And managing your time, productivity, time management, talking with your bosses, talking with insurances, a lot of this stuff, a lot of these social skills, soft skills people say carry over very well into real estate. So the biggest thing, biggest thing and what I spend the most time when I work with people is just telling them that they can do it, right? And a lot of times you just need some external validation or to see someone else do it, right? To see someone else. Like, you know, when you're first intubating someone, you're like, shoot, I don't think I could ever do that. And you see someone else, maybe even you see a fellow med student doing it, you're like, yeah, you know, he or she did it. Maybe I can do it too. So.

Sorry, my dogs are going nuts here. Oh, yeah, I think we'll just wrap this up here. Okay. Yeah. So. So what do you see yourself spending most of your time now, today? I think that's what people really want to know too, is that how do you balance all these things between, you know, your, your ascent and what you're building there with your family, with your career, what's that look like? And is there something that you're moving towards?

So I, I think, you know, if you look at strictly an hour time, I spend a lot more than, you know, the 80 hours that we work, but it's extremely flexible. Like, you have seen all my meetings, I have my kids, you know, I'll be walking around with my one year old. It's just having that flexibility. Sometimes I do meetings from the doctor's office and it's being able to dictate your time. And, you know, even if you're not necessarily buying income, the income will come eventually. What you're buying is freedom. Right? I actually tried many of, you know, I work nights part time, but I tried to switch to days and it was horrible. I got nothing done and switched back to nights. But what this buys is, buys freedom. Freedom to be where you are. You know, sometimes I'm on vacation and I'll have to answer a couple emails. And it's just having that freedom to kind of choose where you are, what you're doing. And you could scale up, you could scale to a couple hundred units or you could do a couple thousand like we have. It's, it's having that ability. And I find that in medicine, that's what really hurts right now, that a lot of autonomy, a lot of choice, a lot of flexibility has been taken out. Right. Try switching a shift. It sucks these days, right? If you have something that comes up, it's. It's like torture. It's like pulling teeth, trying to get someone to cover your shifts. So having that flexibility and being able to choose less, work, less stuff, and being able to have that mental stimulation, I think is just so healthy and really helps with burnout. And actually, like, if I haven't gone to the hospital in a week or two, I actually kind of miss it. And that's what I really enjoy, having that love for medicine again, because I'm choosing to go there now, you know, as opposed to the other way around, just working, you know, Even though I always love medicine, I had to pick up extra shifts to kind of pay for my new child who eats like 10 pounds of fruit a week. And so I, you know, it's expensive these days, but being able to choose to go to work, to choose to something I enjoy. And I still work. I work by choice, not because I have to do.

It's awesome. People want to find out more about you and what you're doing. Where's a good place for people to do that?

Yeah. So we are coming up with a new cohort for a coaching package. If people are interested in learning anything about how we do it, how we scale, they can reach out to me directly. It's Pranay P R A N A y scent, Equity Group dot com. And this is going to be in Q1 of 2024. And we only have select spots because we have a lot of interest already. So if people want to reach out, please do it asap. Cool.

All right. Well, I mean, like, like I do in all my summits. I'd love to leave people here with a great tip. This is not a summit, but this is our interview. But I'd love to leave still when we finish this off. What's a. What's a good, like, actionable step or something? A piece of advice that you can give somebody who wants to follow in your footsteps and really scale this portfolio?

Yeah, just. Just remember, you know, it's kind of like the definition of courage. You know, it's not doing something without fear. It's doing it with fear. And I. I would say the same thing about doing something outside your comfort zone. You're gonna have doubts, you're gonna have imposter syndrome. You're gonna feel like you're not able to do it. Just be like, okay, you know, accept that feeling and do it anyways because you've been able to do it in the past. Right? And you can do it again. Just remember all the successes. Remember medicine. Remember your medical degree. Remember all the tough patient conversations you've had. If you've done that, you really do anything else.

Awesome. Well, thanks so much for your time. I know people loved and they've been waiting for this interview, so I know that people are going to enjoy this. So thanks for your time for. Keep doing amazing work.

Thanks, Peter. Talk to you soon.

All right, take care. Bye. Enjoy the show. Let me know by dropping a review in the podcast app you're listening to us at. And if you haven't already, be sure to hit subscribe. Join thousands of physicians who are also on this journey to creating their ideal lives through multiple streams of income. Learn more at our website, passiveincomemd.com thanks again for allowing me to be a part of your journey. See you next time.