Real Estate investing and property management

[Zaphod]

Re3iRtH wrote:

I have invested in real estate (SFHs, condos, partnerships, etc.) as a resident and junior staff. Was enjoyable and the monthly net income has already surpassed my living expenses, making me FI one year out of residency. It’s been pretty easy to manage the coastal properties from a distance without a PM. I recommend everyone do the same. Most people are scared (I don’t know why).

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It sounds really nice at first to not take calls, etc....I just didnt want to be point man. However, the PM is bad and being a dr I guess doesnt give one much freedom to allow quickly fixed things to just hang out, so now the tenant has our number and we just knock everything out automatically. Its not been bad, aside from the fact our tenant seems lonely and it can be hard to get out of there without giving an hour of listening time, or getting chatted up while working. Very nice, but you know.

[NJDoc]

I'm guessing you were not invested in real estate in 2007-2008? It wasn't great then, in fact it was bad. Some of my properties pulled through unscathed because we were long term hold type of investors, but market rents plunged in that timeframe. I had some SFH's at that time and took a bit of a loss on them. My point is, there are cycles to every market and real estate is no exception. Diversify, diversify , diversify.

[Re3iRtH]

I do have folks that could place a tenant for me or make a repair in a pinch. That's from networking during my 5 years of residency in/around that market.
I recommend to buy in markets that demonstrate long-term appreciation and rent growth. My worst day ever managing my rentals resulted in me spending an hour, not a full day. I would have probably spent that hour browsing forums or go out eating food that's bad for me anyway
I did make the decision to start funding retirement equities this year. But it won't ever represent more than 25% of my portfolio. Real estate is just too good when it comes to tax benefits and inflation-hedging.

[G]

Re3iRtH wrote:

I have invested in real estate (SFHs, condos, partnerships, etc.) as a resident and junior staff. Was enjoyable and the monthly net income has already surpassed my living expenses, making me FI one year out of residency. It’s been pretty easy to manage the coastal properties from a distance without a PM. I recommend everyone do the same. Most people are scared (I don’t know why).

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I'm not scared, it just is a pain when a day off turns into a work day.  I really have no idea how you can manage remotely without somebody having boots on the ground; what kind of advice do you have?

We all have different definitions for financial independence, but many might say it means you don't have to work ever again.  If you were at that point a year out of residency, good for you, that is really amazing!

[Re3iRtH]

I have invested in real estate (SFHs, condos, partnerships, etc.) as a resident and junior staff. Was enjoyable and the monthly net income has already surpassed my living expenses, making me FI one year out of residency. It's been pretty easy to manage the coastal properties from a distance without a PM. I recommend everyone do the same. Most people are scared (I don't know why).

[The White Coat Investor]

worldwideinvester1940 wrote:

I will be attending medical school this year (U.S DO school) and was formely a real estate broker both on the commercial and residential side. For all you investors physician/residents out there, I have a few questions.

1) Why not buy a multi-family house during residency?

If you are in a good location where demand is high, I don’t see any negatives in buying a multi-family house. Even if you are moving during fellowship or during as an attending, you can always have a local real estate agency manage your property for relatively cheap. What are the negatives to this?

2) What are your thoughts about investing in commercial real estate as a physician?

In my area, this is hot and the costs are reasonable. Cap rates are high. I’ve always wondered, is it possible to be a full-time physical while owning a number of commercial properties? With strong management team and backing of a decent broker, you’re properties can be rented fairly quick. So why not invest in commercial properties?

 

 

Any thoughts on this?

 

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1) You're busy and have little cash flow outside of the property to absorb vacancies etc. There is also a very high chance of going to another city after residency, leaving you a long distance landlord, which sucks even with a property manager. And finding a good property manager that cares anywhere near as much about your property as you? Not the easiest task.

2) I like it. But I'm not sure your statement makes sense. It seems unlikely that real estate is both hot and cap rates are high. At any rate, you seem a good candidate to invest a significant amount of your portfolio in real estate. As an attending. But for now, your goal should be to become the best doctor you can.

[ifonlyFI]

Buy the multi family. You wrote that both you and your family have experience. Thus, you should take advantage of that experience. You will be bush as all heck during residency. But if your business plan keeps your hands clean of active work/stress in the real estate, you will do well. Kudos!

[YSH]

adventure wrote:

YSH wrote:

I recently read this.  Any thoughts, especially from those who have done it?

https://investorjunkie.com/55958/rental-property-investment/

(disclaimer: not my blog and have no financial attachment to the site)

 

I currently have an opportunity to do some real estate investing.  Small amount, won’t bankrupt me and have family members who have experience with being a landlord.  I have multiple reasons to buy the property; not all are monetary.  Hoping that the unit can serve aging parents/ in laws, possibly provide some income and even give my kids more school options.

Thoughts?

Would appreciate any insight.

 

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Make a new thread so folks can see this.

I’d at first say… make sure you’re up for being a landlord, and a landlord to the family. Not sure about the school options – as in… getting a child residency status? Or a cheap place to live while in school?

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Yes, I agree that being a landlord and being a landlord to the family has many degrees of differences.  Tho, I don't really think I currently have much of a choice, as who else should be taking care of my aging parents/ in laws besides me and my partner?

We see this real estate venture as partly investment and partly for personal reasons.  I, too, wish that I can always separate relationships from money, but I realize it a lost cause. Just trying to make it as painless as possible.

As for more options for the children, its more like icing on the cake. Or maybe just not losing money on this entire deal would be icing on the cake? I don't know, at this point, I am willing to take any positives.

Another vote for making sure I am financially independent when I am in my old age.

[G]

Catching up on posts after vacation.  OP:  So, you want to be a real estate investor, get an MBA and also your DO all simultaneously?  You are clearly driven.  During med school, I had a hard enough time balancing my schoolwork, staying fit mentally and physically, and trying to make a relationship work.  I spent the summers before clinicals doing research and studying for Step 1, which probably didn't hurt my residency applications.

I have rental property now and 95% of the time it is fine, but that remaining 5% is a real pain in the rear.  I'm blowing my day today by checking out an old tenant and installing a new one.  Yeah, a property manager could deal with this, but I had to fire them and besides, when you start adding up their expenses, you might as well just go with a REIT.

[StarTrekDoc]

A fool and his money are soon parted -- please don't.

More due diligence is indicated if there are no downsides.   Some say Naked Put Options are guaranteed too

[The White Coat Investor]

worldwideinvester1940 wrote:

The White Coat Investor wrote:

worldwideinvester1940 wrote:

I will be attending medical school this year (U.S DO school) and was formely a real estate broker both on the commercial and residential side. For all you investors physician/residents out there, I have a few questions.

1) Why not buy a multi-family house during residency?

If you are in a good location where demand is high, I don’t see any negatives in buying a multi-family house. Even if you are moving during fellowship or during as an attending, you can always have a local real estate agency manage your property for relatively cheap. What are the negatives to this?

2) What are your thoughts about investing in commercial real estate as a physician?

In my area, this is hot and the costs are reasonable. Cap rates are high. I’ve always wondered, is it possible to be a full-time physical while owning a number of commercial properties? With strong management team and backing of a decent broker, you’re properties can be rented fairly quick. So why not invest in commercial properties?

 

 

Any thoughts on this?

 

Click to expand…

You can’t see ANY downsides? Really? I would submit you shouldn’t invest in anything until you can clearly see the downsides. I assure you there are downsides. Let’s start with transaction fees to begin with, although I would hope as a realtor you would be not only extremely familiar with those, but in a unique position to decrease them dramatically. Then there’s property taxes, rent, bad tenants, vacancies etc.

 

2) Your area is both hot and cap rates are high? That’s a bit odd don’t you think? Typically an area is either hot with low cap rates or cold with high cap rates.

At any rate, sure, you can be a physician and do commercial real estate. Lots of docs do.

Click to expand…

Are you familiar with the Boston Market? Realtors are struggling to pick up rental listings? My former boss sold 20 million this year in commercial properties. As a landlord now, it’s hard to see a downside. I can imagine other locations may struggle.

 

 

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Yes, I understand in Boston trees grow to the sky and real estate never goes down in value.

 

Seriously though, the most important part of investing is risk control. If you can't even imagine the risks, then how can you control them? If there is no risk, might as well maximally leverage your entire life.

Now if you weight the upsides and downsides and feel like the upsides definitely outweigh the risks, then sure, invest. My comment was directed at your stated inability to see downsides. I assure you there are downsides and if you can't see them, you'd best keep looking before investing. Otherwise, maybe he who has the experience gets the money and he who has the money gets the experience.

[Zaphod]

Mmd wrote:

Hi all. Interesting thread. I recall busy and hectic times in residency, so kudos to you if you have the time and energy to own and operate rental properties too!

I am in practice and am thinking of purchasing a small three unit complex to rent out in a beach town in coastal Orange County, California. I am concerned, though, about vacancy rates.

Anyone know where I can find data regarding vacancy rates for both short-term/vacation as well as long-term rentals in this specific area? A Google search did not lead to any hard data…

Many thanks!

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there are services for airbnb, etc...but do not recall them off hand. you can get pretty thorough reports however. plan on paying and why wouldnt you with such an important and large investment anyway.

[Zaphod]

worldwideinvester1940 wrote:

The White Coat Investor wrote:

worldwideinvester1940 wrote:

I will be attending medical school this year (U.S DO school) and was formely a real estate broker both on the commercial and residential side. For all you investors physician/residents out there, I have a few questions.

1) Why not buy a multi-family house during residency?

If you are in a good location where demand is high, I don’t see any negatives in buying a multi-family house. Even if you are moving during fellowship or during as an attending, you can always have a local real estate agency manage your property for relatively cheap. What are the negatives to this?

2) What are your thoughts about investing in commercial real estate as a physician?

In my area, this is hot and the costs are reasonable. Cap rates are high. I’ve always wondered, is it possible to be a full-time physical while owning a number of commercial properties? With strong management team and backing of a decent broker, you’re properties can be rented fairly quick. So why not invest in commercial properties?

 

 

Any thoughts on this?

 

Click to expand…

You can’t see ANY downsides? Really? I would submit you shouldn’t invest in anything until you can clearly see the downsides. I assure you there are downsides. Let’s start with transaction fees to begin with, although I would hope as a realtor you would be not only extremely familiar with those, but in a unique position to decrease them dramatically. Then there’s property taxes, rent, bad tenants, vacancies etc.

 

2) Your area is both hot and cap rates are high? That’s a bit odd don’t you think? Typically an area is either hot with low cap rates or cold with high cap rates.

At any rate, sure, you can be a physician and do commercial real estate. Lots of docs do.

Click to expand…

Are you familiar with the Boston Market? Realtors are struggling to pick up rental listings? My former boss sold 20 million this year in commercial properties. As a landlord now, it’s hard to see a downside. I can imagine other locations may struggle.

 

 

Click to expand...

If its hard to see downsides you are definitely not looking or thinking about them clearly. It doesnt mean its a bad decision, but you should be able to list several downsides and scenarios where this is not going to go well. I can think of a litany with what I do both with investing and being a landlord. If you cant make a list of downsides how can you possibly set yourself up to avoid those that can be avoided or have a plan to deal with those you cant control?

This is something you will learn in medical school as well and is pretty much normal thinking for doctors.

[worldwideinvester1940]

The White Coat Investor wrote:

worldwideinvester1940 wrote:

I will be attending medical school this year (U.S DO school) and was formely a real estate broker both on the commercial and residential side. For all you investors physician/residents out there, I have a few questions.

1) Why not buy a multi-family house during residency?

If you are in a good location where demand is high, I don’t see any negatives in buying a multi-family house. Even if you are moving during fellowship or during as an attending, you can always have a local real estate agency manage your property for relatively cheap. What are the negatives to this?

2) What are your thoughts about investing in commercial real estate as a physician?

In my area, this is hot and the costs are reasonable. Cap rates are high. I’ve always wondered, is it possible to be a full-time physical while owning a number of commercial properties? With strong management team and backing of a decent broker, you’re properties can be rented fairly quick. So why not invest in commercial properties?

 

 

Any thoughts on this?

 

Click to expand…

You can’t see ANY downsides? Really? I would submit you shouldn’t invest in anything until you can clearly see the downsides. I assure you there are downsides. Let’s start with transaction fees to begin with, although I would hope as a realtor you would be not only extremely familiar with those, but in a unique position to decrease them dramatically. Then there’s property taxes, rent, bad tenants, vacancies etc.

 

2) Your area is both hot and cap rates are high? That’s a bit odd don’t you think? Typically an area is either hot with low cap rates or cold with high cap rates.

At any rate, sure, you can be a physician and do commercial real estate. Lots of docs do.

Click to expand...

Are you familiar with the Boston Market? Realtors are struggling to pick up rental listings? My former boss sold 20 million this year in commercial properties. As a landlord now, it's hard to see a downside. I can imagine other locations may struggle.

 

 

[The White Coat Investor]

worldwideinvester1940 wrote:

I will be attending medical school this year (U.S DO school) and was formely a real estate broker both on the commercial and residential side. For all you investors physician/residents out there, I have a few questions.

1) Why not buy a multi-family house during residency?

If you are in a good location where demand is high, I don’t see any negatives in buying a multi-family house. Even if you are moving during fellowship or during as an attending, you can always have a local real estate agency manage your property for relatively cheap. What are the negatives to this?

2) What are your thoughts about investing in commercial real estate as a physician?

In my area, this is hot and the costs are reasonable. Cap rates are high. I’ve always wondered, is it possible to be a full-time physical while owning a number of commercial properties? With strong management team and backing of a decent broker, you’re properties can be rented fairly quick. So why not invest in commercial properties?

 

 

Any thoughts on this?

 

Click to expand...

You can't see ANY downsides? Really? I would submit you shouldn't invest in anything until you can clearly see the downsides. I assure you there are downsides. Let's start with transaction fees to begin with, although I would hope as a realtor you would be not only extremely familiar with those, but in a unique position to decrease them dramatically. Then there's property taxes, rent, bad tenants, vacancies etc.

 

2) Your area is both hot and cap rates are high? That's a bit odd don't you think? Typically an area is either hot with low cap rates or cold with high cap rates.

At any rate, sure, you can be a physician and do commercial real estate. Lots of docs do.