Finding Doctors To Fund Your Deals with Thomas Geib

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This is the no Closer show where you get the latest developments in distressed note investing and learn the secrets of how you can control millions of dollars worth of property. For panties on the dollar. Get educated and entertained by someone who has closed thousands of deals and lives to support you in achieving the same. Now here's your host, CEO of We Close Nodes, Scott Carson.

Good morning, good afternoon, and good evening everybody. Welcome this episode of the Note Closure show. As always, Scott Carr is excited to be here today. Got a very special guest that I'm really excited to have on. I'm sorry, especially since so many of our listeners, you guys are out there investors, you're still working a full time gig or you're trying to transition to a full time investor. And one of the biggest things is that people always ask is, hey, how do I raise capital? And oftentimes raising capital can be more intimidating than it really is. But it's always funny when people say, well, I know somebody, I got a friend of a friend and I've got somebody that's got money. You know, I'm going to race capital from them. And then it comes down to the people like what do I say? Or how do I approach it? And so today's special guest is not only an expert real estate investor, he's the author of how to Get Rich as a Doctor podcast, which I highly recommend that you guys go out and check out. He's the co founder of Physicians Wealth System. He's also the co host of Real Estate Mogul MD Podcast and the founder of Real Estate Lead Convert. So we're, we're excited to have our buddy Thomas Gibbon here today join us. What's going on? Thomas, man, how are you doing, man?

Thank you very much. It's a pleasure to be here.

No problem. So tell me how you kind of got into this niche of working with doctors and how assisting doctors and helping them become wealthy. Because most people think doctors are just ultra rich. But a lot of them struggle with doing a lot of other things though, too, right?

Yeah, yeah. That's a huge misconception that doctors are rich. They make a lot of money, but a lot of them spend a lot of money too. So most of them are pretty poor. But yeah, I got into this really. It started all the way back two and a half years ago. I was actually working at Costco, Costco Wholesale. Are you familiar the warehouse, Everybody loves Costco. Warren Buffett's number one, number one fan of that company there. But I was working at Costco and I was in Electronics. And this guy walks in looking for a tv, and he was buying it for, I believe it was rental property he had or, like, an office. And at the time, I knew nothing about real estate. I just knew I wanted to learn about real estate. And we. We had this exchange. I got his number, got his business card, followed up with him, got a meeting, finally picked his brain for about two hours. And at the end of it, I was like, wow, this guy's really, really smart. He knows his stuff. He has a company in real estate. If I could just learn from this guy, if he could just teach me. So I said to him, I said, I'll work for you for free if you teach me everything you know about real estate and building a business. And this was Brett Riggins, which you were on our podcast a couple weeks ago. And I started working with him. He started teaching me, and our relationship just developed over time. And here we are today. We're now partners, and we have this business where we help doctors. So that's the origin story of kind of how we met and also how we kind of get into this.

That's. That's really cool. So what made you decide, though? Kind of, like, targeting doctors? I mean, I love that origin story, how you guys met up and got going, but what's talk about the. The aspect of diving in that niche? Because that's an issue. I mean, I've had pretty good, like, target, like, pharmacies. I mean, you know, I'm familiar with the Ron Legrand system back in the day. And when Ron Legrand was traveling across the country, he would buy lists of, like, dentists because they, like, these people aren't happy with their job, they're not happy with their career. They want to do something else. Do you find that kind of similar in the MD world?

Yeah.

Yeah.

Well, we really got into it, and we get that question all the time, like, why doctors? Why are you just. Why just doctors? Right. And really, it was just because we already had relationships with some lenders who were doctors, and we just thought, like, hey, doctors have money. They're rich. We didn't know better. They do have a high income. So, like, hey, this is an easy niche for us to go after. So really, it's just that simple. That's the reason why we went after it. But for doctors and these, a lot of them are facing what they call burnout, physician burnout. And, yeah, it's something that. It's a real pain point for them to have to work to continue to earn money. And that's where we kind of come in and we help them. Hey, you don't have to. You can create this passive income through real estate investing.

Yeah, I've got some friends that they explored being a doctor and they're like, it's like I got to go to school for 12 years. Yeah, I'm going to accumulate six figures in debt, you know, because most people aren't financing that privately. And then you got to work a ton of hours, you know, on constantly. Don't really have any share really life, you know, family life or any true balance. Even though there's not really a balance in life out there. But that's more one sided to constantly be working in a lot of cases.

Yeah, yeah, 100%. But it is something that we're all grateful for to have positions, I mean delivering our kids and taking care of us and making us feel better. So a lot of the people who go into it, they want to go into it because they want to help others. And you know, that's something that's really special. Even though they have to go through all this, this schooling and that debt, of course that's huge as well. But yeah, we're just super grateful to be able to work with this type of clientele.

Yeah. And then many of them, like you said, they're making good money, but they've also got the overhead, they've got malpractice insurance is through the roof in a lot of cases. That's why you see a lot of doctors kind of bonding together with multi, multi process practices to make things happen. But so let's talk about what's your favorite strategy? You've been doing investing for a little while now. We'll talk in some of the things you guys are doing, but what's your favorite thing that you love doing?

Yeah. So what I was really thrown into when I first started working with Brett was wholesale. So what we do is we would call, we do direct to seller. So we would do the different, we'd have different channels where we'd market, we'd cold callers text, all these direct mail, all these different things. And he put me on the phones right away. So I was calling people all day long going, hey, you know, I saw my partner reached out to you. Are you interested in selling now in the near future? Click and the next one. And that's what I, that's where I started was wholesaling. And it's kind of where most my expertise is. I did in the past, I think it was around two years ago. I didn't do a value add fix and flip. And I learned I never want to do that again. Just too stressful, Too many moving pieces. Wholesaling for me is a little more simple, just taking the paper and reselling it. So, yeah, I would answer your question. I would say wholesaling is definitely the go to for us, and that's what our acquisition company is built on.

Cool. And when you're. You've talked previously about how you have some lenders that were doctors to begin with, therefore, are you using their money for just quick transactional funding in some cases, or how do you use and leveraging their. Their money?

Yeah. So the way that Brett's company started out was a fix and flip company. So it transitioned from fix and flip to wholesaling, which it is primarily wholesaling now. But we'll use the funds for quick buying lists if the margins are a lot larger. We'll also, from time to time, if it's a really good deal, because we're, we're going direct to sellers. So we'll sell the deals that we don't want to other investors, hedge funds, et cetera. The ones that look really nice, we'll take them down ourselves, use that private money from doctors, put some renovations into it, and then resell it on the market or hold it as a rental.

Now, what, what's. What would you say is the key when you're talking with different doctors out there? But if you're pitching a deal, what are maybe some of the things or even just raising capital? I think probably a lot of it's similar. But what are some of the key facets that you think people need to include or things they need to avoid doing when they're talking to doctors about potentially being an investor with them?

Yeah, I think the first thing, and this is with my experience building relationships, is that you don't want to just go into expecting something. You don't want to go into it just asking something. You want to focus more on building the trust and building the relationship and really showing them that, hey, I am an expert in this area. But you don't have to tell them that. You can show them through your actions. And once you get a few investors, doctors will share it with everybody. Like, hey, I know this guy Brett. Like, I lent him X, Y and Z and I got this return. Like, he's great. I trust him and they'll trust you too. So I would say just focus more on the relationship and not so much on the pitching. I know that's kind of what you were asking, like, what do you say and how do you say? I think that stuff's not as important. It really doesn't matter if you have the relationship and if you have the trust.

Yeah, I, I totally agree with that. And I, I figured that's what you would say because I think a lot of people approach it with the, oh, hey, will you fund my deal? Doctors and people that are making money, they're getting bombarded all day long with different. Oh, yeah, you know what I mean?

Yeah.

And actually standing out by building a relationship, maybe sharing some case studies that you've done, you know, have, you know, anybody. But it is, it is a very warm referral based community because a lot of them are looking. I've got a friend that works, I worked for MD WebMD for years and she would call me up and ask me, you know, counsel on investment, because she wasn't really that excited about real estate investing. But every doctor was telling her she needed to do that, to dive, you know, to make sure she was leveraged properly. Right?

Yep, yep. Definitely referral based. And I would also just add in there that going to these places where your investors are. So if that's meetups or for doctors, for example, going to these conferences, because building relationship online. Although we're blessed with technology today, to be able to do what we're doing right now, connecting on these video calls, there's something different. There's something that you really get that intimacy and that connection when you're in person and you can actually shake the person's hand and that helps build trust a lot faster.

Yeah. What are some of the type of events that you like to network with doctors at?

So one of the ones that is actually coming up in March is the White Coat Investor. Very big, very popular for physicians. He throws this annual event. So that's definitely one that you can look at also just jumping online. There's a lot of different annual events that are thrown constantly. I can't list them off the top of my head, but there's, I mean, there's probably hundreds of them.

Right. Well, there's different networking events and seminars are going on. And I think of the, I think of the movie with Patch Adams and Robin Williams, some of the things that he did in that movie to market in a lot of cases, kind of funny and stuff like that. So.

But yeah, so I have not seen that. You have to.

Okay, I can't say it here, but you gotta go watch Pat because it's hilarious what he's doing. He was wearing A white coat, but it was a meat packers shirt that he had stolen. But it was marketing to doctors out there. And the way that he did it, inviting them, it was just unique. I'm not gonna, I'm. You gotta go watch it.

I'll check it out.

You guys will work it there for you. Now let's talk about some of these things that you're doing. You know, you're, let's talk about the, what is the Physician's Wealth Systems account? What is that? Thomas?

Yeah, Physician Wealth Systems, what we do is we help physicians, dentists essentially acquire a real estate portfolio. So what we'll do with our acquisition company is we'll direct a seller, we'll find these deals, we'll vet the deals for them, and then we'll just use their money to purchase them, renovate them, and then we will have them stabilized, refinance, and rented out. So if someone works with us, if you were Dr. John and you wanted to work with Physician Wealth Systems, we do a 12 month program where we require 12 properties for you on your behalf. And at the end of those 12 months, you'd have all cash flowing, property management, all those things so you don't have to, because doctors are incredibly busy as well.

So, so you're handling a full turnkey management, everything like that for that 12 months and beyond, or just get set up and putting it with a property manager.

So we're, we're getting this with a property manager. If they want to continue another 12 months, then great, we'll do another 12 properties with them. But if they don't, if they want to walk away, we have the relationship set up so that they can continue working with the property manager.

Very nice. And what kind of returns are you seeing doctors looking for when they're lending money out? We talking like hard money returns we saw. Were you talking like 6, 7, 8%, or is it a mixture that you see? Thomas?

Yeah, so if we're, if we're, if we're borrowing private money, typically we will borrow at anywhere from 8 to 10%. Some doctors obviously are going to want more than that. That's typically what we will borrow money at though.

Very nice, very nice. Why is this thing, I think a lot of people realize I gotta be at 12, 13% and I'm like, 8%'s a pretty good return for passive investing in a lot of cases, you know what I mean? Especially when they don't have the time or the expertise to go out and find and kill their own deals, you.

Know what I mean? Yeah. And it's a heck of a lot better than stock market this past couple years.

Yeah, let's look. I call it the dump market or the crash market in a lot of cases for out there. But that's, you know, I think that's the same out there with those that aren't earners. You know, they make great money. They're looking for ways to diversify where they don't have to do all the work and be the expert in the fix and flipping or the manager, management or the, the workout side of that asset. Right.

Yeah. And that's the biggest thing is, is showing them that, hey, this is, this is passive. You know, doctors, especially Doctors, they're working 60, 70, 80 hours and weekends nights. Like, they don't have time to go and find deals and invest their money in the stock market and do all these things. So they just want to find someone they can trust and they know who can deliver a result. And once they find that person, they will continue to keep putting their money into those projects for them.

Now, when you talk about putting doctors into a dozen properties, is that financed in their name and an llc, what kind of loan programs are you seeing available for folks out there?

Yeah, so we have, we built a relationship with a lender, and we will create an LLC for the doctors, if they don't have one already, which typically they don't, to hold the properties. And we'll lend it directly to the llc. Typically, we'll come out cash purchase and then refinance on the back end after we do the renovations.

And what kind of LTVs off of value are you seeing on the refinance side?

So we, we have this relationship. We have a 90% LTV. It's a five one arm. And right now it actually just got bumped down, so it's four and three quarters a percent, which is pretty good, especially right now. And there is no penalty on refinancing. There's no cost when you do that refinance. So it's a pretty, pretty nice relationship that we're able to pass on to our clients and doctors that work with us.

That's really phenomenal. I have to pick your brain who that is for some stuff. Yeah, especially they do the 90% of value aspect of things on even the new LLC.

Yeah. When, when we first started the relationship, Brett was the one who was on the phone with them, and he was like, okay, I need to, like, get this fact checked because I'm not believing what you're telling me right now.

You know? You know There's a lot of people that are worried about values dropping and stuff like that. And you know, and 90% on a new LLC because if, if it's rehabbed, it's in pretty good condition and in most cases value is going to maintain or something like that. Plus if you've got a renter in spot in places and it's, it's producing one and a quarter, you know, debt coverage, service ratio in a lot of cases where the rent's coming in, stuff like that and producing cash flow, that's a pretty solid investment, you know what I mean?

Yes, it is. Yeah. And that's why banks loan on it all the time. I'll also add this, that the lenders that probably are also looking at the loanability of the doctor, so they have assets, they also have liquid cash. So they're more likely to give them these options.

Yeah. Probably six months of reserves and cash or savings or retirement accounts and guilt and seeing other things. Yeah, yeah, that's good. That's awesome. I mean, that's a great. If you're connected and working with somebody, you can leverage that aspect of that job to get some capital to make some things happen. Borrow people, borrow private money today, take it down and refinance it long term in a lot of cases. Yeah. Where do you see, Are you here? Are you hearing anything from your doctors out there who are nervous about the market or they're nervous about all the crazy?

Yeah, of course. Yeah. I don't know if I haven't heard anything from. I've heard something from everyone. Yeah, yeah. It's, I mean, you know what's going on. Everyone knows that there's a lot of uncertainty in the market right now. We actually had a, one of our acquisition managers picked from a hedge fund, stolen from a hedge fund from us. Well, I don't know, three months, three, four months ago. And he just was in contact with us last week and said that 80% of all their acquisitions on that hedge is really big hedge fund were laid off. So the hedges are going between this transition where they write the, I don't know what it's called the, the investment when they raise the money on the criteria of what they're buying at. And they wrote it, you know, a year ago, six months or whatever and the markets change. So now they have to get new funds raised. And right now a lot of them are not buying at all because they're in that transition period. So it's very interesting what's going on. I think there's going to Be a lot of, a lot more deals because of that, because these hedges are stopping and they're laying off all these people. So yeah, it's definitely a time where uncertainty. But I always, always remind people when there is crisis and when there's all this uncertainty, there's also opportunity. So.

Yeah, that's, that's so true. There is a lot of opportunity if you know where to look. And you know, a lot of these I buyers, these big funds bought lots of stuff above value, you know, at a premium, thinking that appreciatives go up. Well, they're underwater in a lot of cases. So it leads to opportunity for investors like you and me to step in and buy to the discount or to take it off their books in a lot of cases, you know. Yeah, that's a beautiful thing. Now with calling sellers directly, I got to ask you this because I know somebody's going to ask me about that. What would you say the, the biggest question to ask these direct sellers, you know, and I'm sure you're calling off a variety of list motivated sellers, out of state owners and stuff like that. What did you find was your secret sauce in making things happen?

Like once we get a hold of someone or the actual lists. Okay, Yeah. I think it's really just again going to that relationship piece, building the trust. Because you're marketing, they have no idea who you are half the time. It depends on how you're marketing to them. But you get on the phone and you're like, hey, instead of, instead of like going right into a sales pitch, you just want to say hey Josh or hey Scott, how are you? And they're a little thrown off and they're like, hey, I was just calling, you know, I saw my partner reached out and it's curious if you're interested in selling. If they say yes, then you just kind of go into like the what's, you know, what has he thinking about selling motivation, you know, how soon are you looking to sell? Kind of almost like vetting them in a sense. And then once they seem to be interested and kind of engaged, then you can kind of go through the process and not taking it so serious. I mean these people are going through a lot. Typically if they're considering selling to someone that just call them out of the blue so they, they're almost always going to have objections. They're not going to tell you, like there's going to be something going on in the family or something that I mean, who knows what. We've had so many different crazy Stories going direct to seller. But yeah, it's just being empathetic and, you know, just being. Trying to connect with the person over the phone.

Now you got to share a story or two here.

You.

You set us up there. A couple crazy stories. What story or two? Dealing with. Dealing with direct sellers.

Yeah. So I'll give you this one. This wasn't. This wasn't actually a deal that I had, but someone on the team was. Was talking with someone, and they're just like, yeah, yeah, someone was just killed here, like last week. I'm like, okay, all right. And it's just very, like, subtle, very casual. Just continued on the conversation. It's like, all right, there's others, like horror stories where, you know, we go through our processes. We do it all virtual. So we'd go through. Ask all the questions about the property over the phone and then get it in contract. And then we would actually have someone show the photos. So there's been so many times where we show up and, like, there's like, practically a hole in the roof. And you're like, well, you never said anything about, like, the hole in the roof here and just going back and forth. I mean, there's. There's a lot of really strange scenarios with. With people and, like, the lies that they'll. They'll tell you over the phone. But yeah, it's a. It's good when it's good, but when it's bad, it's bad.

I just say that, well, sellers hope. Oh, it's all online. You're not going to see it in person. I'll go to contract and sell it for, you know, more than I owe on it or more at a value more than it is. I mean, unless Superman's flying through the roof on a regular basis, that hole doesn't have any value.

Yeah.

What. When you're talking with new investors out there, Thomas, what do you. What do you think is some of the biggest mistakes that new investors are making in the market?

Yeah, it's a great question. I think sometimes that new investors are just trying to do too much or trying to do a little bit of everything. I think best advice is just pick something and just go all in on that and really, really study that network. Make yourself known as you're that guy in that market. Whether that's. If you're just a disposition guy or you're the wholesale guy or you're the no guy or whatever. I would say just go into one thing and go deep on that and not try to spread yourself too Thin. Yeah.

I think that's really great sound advice because that's one of the big things. People go to meetup groups and they sign up for everything, decide they're going to add another tool in their tool belt, and it ends up being that tool belt overpowers and they don't end up doing nothing. You know what I mean?

Right. Yeah. I'm flipping houses and I'm starting the syndicate and I'm doing wholesaling direct mail and. Yeah, yeah.

On the list that you guys are calling, what are you seeing? Like the best hit rates? If you can share. If you don't mind sharing.

Which. Which lists are the best.

Yeah, yeah.

So we've actually transitioned. It's. I want to say it's been about a year now where we're no longer doing text, we're no longer doing cold calling. We're just focused on SEO and Google Ads and we're starting to do some direct mail. But to be honest, I couldn't answer that question for you because I wasn't too involved in the actual list and the marketing piece of it. So, yeah, I, I just kind of answered that question.

No problem. No problem. Honestly, I like that. Versus coming up with something that's a beautiful thing.

Yeah, yeah, of course.

Where do you, where, where with, with the SEO stuff and stuff like that scene. What do you, are. You're in knowledge of kind of what the things that they're targeting or you're pulling.

Yeah.

Or what?

Yeah, that's, that's my arena for sure. Google Ads and SEO. So yeah, for, for SEO, we're, we're looking at we buy houses. Sell my house fast. Those are the two best keywords that are also the most competitive. But if you're ranking number one or two, anything really below three, you're not getting any traffic. You got to be like number one to win at Google. But yeah, sell my house fast. We buy houses. Also other keywords are companies that buy houses. Cash home buyers. Although cash home buyers is not that great of a keyword for Google Ads. Interestingly, we found that for whatever reason, we were getting tons of leads from that, but none of them were converting. So that's the importance of actually tracking the click to the lead and the CRM and to the deal. So we were spending all this money, but we weren't getting all these. And we're getting all these leads, but we weren't converting any of the people who search cash home buyers. The best keywords that we found was companies that buy houses and all the different Variations that kind of spur off of that. For whatever reason, that search query was really good in Google Ads and still is.

So very nice. It's good to know. And that's always. Have you seen a change in the algorithms with the ads ad buy? Would it get more expensive or cheaper or how's that working out for you?

Yeah, I feel like it's always changing. It's just you gotta constantly be producing new ads, looking at your, your ad sets and your keywords, what's performing, what's not performing. And it depends on the market too. I mean when we were, when we were spending the most, we were covering the entire nation and that was a lot. But when you're more focused, you can kind of get a better feel and maybe you can also pile on direct mail. And then when people search that also helps Facebook retargeting like all those different things you can kind of add on top of it. If you're more targeted in your approach, that makes sense.

Are there any specific markets that you guys are targeting or more excited about now than you were in the past?

Oh, yeah, yeah. Right now we're, we're going all in, in Memphis. Memphis, Tennessee is a market that we're really looking at and doing a lot of deals through right now just because we really like the entry point for our clients that we work with. It's around 1001-000001-20000. So it's not a lot of cash up front. And that way we can acquire multiple properties before refinancing them to do that 12 month program. We're working with these doctors. We're also looking at Jacksonville and Little Rock, Arkansas.

Yeah, great. Three great markets. I think we're all in our top 20 for the year. Not only being affordable, but also the income is affordable for folks that are living there. Plus the ratio of rents are a little bit higher than when you look at a ratio of rents to value. It's a, it's a good, good mixed rate and good, you know, like what is Memphis 85 rental market in a lot of cases there for you?

Oh yeah, it's, it's, yeah. Overwhelmingly majority. Yeah. So what would you say are some of the best markets that you've seen?

So with me buying debt, it's a little different aspect. I don't like rentals because it turns another job. But as far as I like Jacksonville, Florida, I think it's one of the most affordable markets in Florida. I love South Carolina as well in some of the bigger markets there because of the university growth There. And a lot of people have moved out of investing out of Florida into South Carolina, insurance being cheaper there versus down in God's waiting room. Columbus, Ohio is one of the. You know, the cities in the Midwest is actually growing compared to a lot of the others that are shrinking. St. Louis and Kansas City are also a really great value add and have a great ratio of affordability compared to rent. You know, rents are high on a ratio compared to owning a home. So those are the great things. You know, I don't think anything on the west coast is. I think everything's overpriced for the most part.

Yeah.

But when you combine in those parts, I think Little Rock's a great place. I think it's really an under tap market. Oh, what's it. Oh my gosh. There's another market in Tennessee that's just on the border.

Not Chattagona.

Yes, Chattanooga, I think is a. Chattanooga.

Yeah.

Is a really great market. Got a great tech presence that's really growing as well. And I think it's really unknown for the most part. Yeah, I think Nashville's overpriced as Nashville is like another Austin. Just so overpriced and expensive. People moving outside of that, you know what I mean?

Yeah.

Well, this has been really great stuff. I really appreciate you coming on and sharing your expertise and, and giving some insight into talking with doctors and not only helping making doctors wealthy, but helping the investors make doctors wealthy as well. For you there, Thomas, what's the best way for our listenership and our followers to follow up with you and connect with you?

Yeah, so you guys can listen to our podcast at the real estate mobile MD and you can reach out to us@physicianwellsystems.com right.

We'll put that in the chat roll for everybody out there. So definitely listen to podcast. Great, Great show. Yours truly was a guest on there, but they've got so much amazing other content on there too. So make sure you check it out there, connect with them and. And you guys work with more than just medical doctors too. If you got some investors that have got some pockets with investors of all types, right Thomas?

Yeah, we work with like exiting entrepreneurs. Any really anyone who has liquid cash over that half a million mark, we can work with you.

So awesome. Good stuff there. Well, thanks for coming on the nuclear show today, man.

Yeah, it was a pleasure.

Awesome. All right guys, make sure you listen to those nuggets. He gave some really great nuggets out there about approaching and talking and markets and marketing. You know the focus, as he said. I think number one is focus on one thing and really get to own that one niche before you decide to dive into something else. But go out, take some action, everybody, and we'll see at the top.