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  • Imaging Center Investment

    I was recently approached with the opportunity to invest in an imaging center, essentially purchasing a share for a set price. Several private docs in multiple related specialties are funding it.

    Anyone have experience to speak from regarding this? Things to look out for/red flags? Bad experiences? I frequently hear docs saying that ASC/RE/etc have been their best investments, would love to hear from the WCI community though

  • #2
    Whether good/bad all in the details. If this is a combined multispecialty group all referring all their patients to the center that could be a good bet. Having a built-in referral base is critical if there are already imaging centers in the area.

    CT and MRI are big capital investments. CTs are six figures, MRIs well into six figures. They require expensive maintenance contracts because the scanners need regular servicing and fixing them out of contract is even more expensive. Buy a lemon scanner and you inherit a very expensive headache. Not enough patients and it's a dead weight accruing interest. US is high five figures but then you have to find a good US tech or you will have US studies of mediocre quality.

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    • #3
      These are nearly always amazing in my exp... due to specialty, mine are more surgery equip company/distributor, surgery center, vasc test center, specialty pharmacy, etc etc. I do some of these for real estate (medical or other). You will almost always get your initial invest back within a year or less on the medical ones... and then it's gravy for years or even decades. I have had a rare couple of them bust early or never finish corp setup... I was refunded. Most I've bought a share or two with were already humming along and I just added on.

      They are just trying to have you have a bit of an attachment by offering you a share or a few shares to the company... so you will send biz to it. They don't typically offer the shares to randoms who couldn't help steer biz to the center. You won't be kicked out or stop getting distributions if you don't refer to the center, but you won't be Mr Popular either. They also won't sell more than a share or two to each doc. It is just to generate "skin in the game." You'd be amazed how many docs can't even write a check for 5 or 10k for these due to fear or literally not having the money... it's sad.

      It is not illegal whatsoever if set up correctly... get an attorney hour or two for review if you like. Basically, you could not own enough to make a big difference in the distributions yourself, but you do ethically have to disclose to patients that you are a minority investor. You will need to do an accredited investor paperwork typically (hint: nobody checks your answers).

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      • #4
        Often a doc's best investment, but the devil is in the details. Review them carefully, especially if this is a big chunk of money.
        Helping those who wear the white coat get a fair shake on Wall Street since 2011

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        • #5
          Investing in our imaging centers was easily the best investment I ever made. When I joined the group, we were 100% hospital-based. When I retired from the practice, we were joint ventured in a group of 5 imaging centers. Not only did I make many multiples of my initial investment, our imaging center investments helped to grow our professional practice and solidified our relationship with our hospital in perpetuity.

          That said, people can and do lose money in imaging centers. In addition to referrals, you need to have skill in contract negotiation with payers, operational expertise, and, if you are starting from scratch, a good grasp on location, buildout, equipment, and personnel. It is not easy and not a no-brainer.

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          • #6
            Originally posted by The White Coat Investor View Post
            Often a doc's best investment, but the devil is in the details. Review them carefully, especially if this is a big chunk of money.
            $50k/share, so a decent chunk but would fall into the <5% NW speculative category of my portfolio. Rest is index funds.

            Due diligence of course. I was given some preliminary info and will be having a meeting with them soon. Non existing center, so will be getting built from scratch. I'm curious to hear/see projections and when they anticipate return of principle

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