3 years out - officially a millionaire and one step closer to saying goodbye to EM

[cyanide12345678]

Hey thanks for all this, seriously. As a young attending, I think my biggest fear regarding RE is not knowing how to start.

Despite reading RE blogs etc I still feel like I don't have a good grasp, of really, anything RE related.

Do you have any recommendations for comprehensive guides?

Guides, blogs etc can educate you only so much especially if you’ve apart been reading them.

At some point you just have to take the plunge and get a hands on education.

What’s the worst that can happen? You’ll lose some money?

When i dropped my first 30k in ashcroft capital, it was hard, but eventually that was 1 month of income for me. An absolute loss which is very very very unusual, especially in a fund with multiple properties, was going to set me back 1 month in retirement. I mean so what???? Ill work an extra month in my life as the worst case scenario.

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[PianoMedic]

This is a part of the reason why i created this post as well. I’ve read at least 20 or so finance books, enjoy finance articles as a hobby, listened to bigger pockets podcasts for 1-2 years, and have really put in hundreds of hours on self education and now feel very comfortable doing these things. And i hope someone who has been wanting to do something like this reads this and feels encouraged. the first deal is the hardest, paralysis by analysis is so difficult to get over. I personally didn’t have any mentor and I’ve made a lot of financial mistakes, it would have been nice having someone educating me on the things that i know now.

So yes, i know not everyone is into this, it’s not worth your time, i get it, move on, do the things you enjoy instead. But I’ve had at least dozens of people in real life asking me about these things and details of what I’m doing with syndications. This post was for those people - i took 2-4 weeks to figure out my first sponsor to invest with, lots of research and here I’ve given a list of half a dozen operators already that is very valuable. For syndications the biggest thing that matters is how good a sponsor is.

The sponsors listed above with their track record was pure gold imo, don’t remember if I responded to that post before. Thank you for that. I’m going to try to wrap my brain around how to reason through whether to invest in syndications or not. Probably read that book you listed earlier and try to look at some deals as they come up on various sites. I have time before I’m allowed to invest due to not being an accredited investor as of yet. How did you get around that limitation as you started out? I wasn’t above 300k combined income for 2021, I’ll be there going forward.

 

[emergentmd]

Hey thanks for all this, seriously. As a young attending, I think my biggest fear regarding RE is not knowing how to start.

Despite reading RE blogs etc I still feel like I don't have a good grasp, of really, anything RE related.

Do you have any recommendations for comprehensive guides?

Go to biggerpockets.com

Its a fantastic site for beginners to pros. Its a great community that will answer questions and even network. Bottom line is if you want to retire, your best Tool is disposable income and time. If you put 150K x 2 yrs in the S&P at age 30, never look at it again and never invest another dime, you will have 5 M at 65 assuming historically growth.

For docs, I find the biggest mistakes is paralysis by analysis. They keep wanting to jump in to something, don't, spend the extra income on "stuff", turn around at age 40 after 10 yrs of work with 1M in retirement, little in net worth, house not paid for, making 350K now with 3 kids in private school getting ready for college staring down at working the next 10 yrs just to pay for their kids college. After 10 yrs, they turn around at 50 with all the kids almost done with college wondering what they did with all their money. Now they have to work full time and wonder how they are going to get to 5M before retirement.

If you are young, right out of residency, no kids the best thing you can do for yourself is Put 150K/yr into the market for 5 yrs. don't touch it. At 35, you can spend all of your income on whatever you want and you will have probably 20M at retirement.

Its really simple. I wish someone made me do this but they didn't.

 

[emergentmd]

TL;DR: volatility is not risk with a longer time horizon, it is a benefit and advantage to the investor in accumulation. If you can keep contributing every month no matter what the market does (and if you can trick/convince yourself into contributing more when things are down or “on sale” then you will likely do even better). This way the investor doesn’t have to “get lucky” with when they start investing and can simply keep the same strategy during their accumulation phase of their career.

Correct, its not rocket science. If you are young, have a high paying job, are disciplined then you will have FIRE money by 50. Time is the only variable that is always constant and the best gasoline to FIRE.

My STR management is different than my LTR management due to them being in diff cities but I am sure if they were in the same, my STR would love to manage my LTRs which are less work.

 

[emergentmd]

So yes, i know not everyone is into this, it’s not worth your time, i get it, move on, do the things you enjoy instead. But I’ve had at least dozens of people in real life asking me about these things and details of what I’m doing with syndications. This post was for those people - i took 2-4 weeks to figure out my first sponsor to invest with, lots of research and here I’ve given a list of half a dozen operators already that is very valuable. For syndications the biggest thing that matters is how good a sponsor is.

I am sure my approach wasn't the best but this is what ignorance brings. I tend to jump head first after a quick analysis using a small amount of my disposable income.

50K into a startup from a friend recommendation, assumed I would lose it all due to the nature of the risk/reward. If they hit it big, then I was looking at a potential 5m exit. Lost it all
50k into my first rental. Didn't know what I was doing, made alittle bit of money when I sold but learned alot. Many would have stopped b/c the income to work ratio was small. Gave me confidence that I knew the business and snowballed from there. Now own 10 properties.
50K into my 1st syndication. Didn't know what I was doing other than recommendation from a friend what was in it for 2 yrs. YES, the most IMP aspect is to pick the right manager. Things worked out and bought into 6 total
60K into 1st FSER. Lots of rough times early on, touch and go but learned alot form the business. Mistakes were made for sure that could have easily caused the place to go under. Learned alot from mistakes, comfortable jumping into 3 more FSER ownership. All sites are now Debt free with almost zero chance of closing.

People fear losing 50K. Working in the hospital I had 250k disposable income a year so I looked at it as 50k education. If I lose all 50K, so be it but the education is immeasurable.

 

[emergentmd]

The sponsors listed above with their track record was pure gold imo, don’t remember if I responded to that post before. Thank you for that. I’m going to try to wrap my brain around how to reason through whether to invest in syndications or not. Probably read that book you listed earlier and try to look at some deals as they come up on various sites. I have time before I’m allowed to invest due to not being an accredited investor as of yet. How did you get around that limitation as you started out? I wasn’t above 300k combined income for 2021, I’ll be there going forward.

Best way to Vet a sponsor is to know someone who will get you in who has real returns. If you are given the opportunity to invest into something like this, I recommend just jumping in for 50K. At worse, its a great education. Other than outright fraud, I doubt these syndications will go under.

No one will ever check your accreditation status. Just click the box, no one checks, no one cares. Its just to stratify the government statue.

 

[Mad Jack]

Will be interesting to see how many of these RE portfolios fare in the next two years as interest rates balloon and prices start to go down, but a good run so far it seems

 

[cyanide12345678]

The sponsors listed above with their track record was pure gold imo, don’t remember if I responded to that post before. Thank you for that. I’m going to try to wrap my brain around how to reason through whether to invest in syndications or not. Probably read that book you listed earlier and try to look at some deals as they come up on various sites. I have time before I’m allowed to invest due to not being an accredited investor as of yet. How did you get around that limitation as you started out? I wasn’t above 300k combined income for 2021, I’ll be there going forward.

I made >200k in 2019 despite being a pgy3 for half the year due to moonlighting and being attending half the year. So 2019 and 2020 my income was >200k, so i was accredited in 2021. May 2021 was my first investment, there was a time i was literally doing 1 deal every 2-3 weeks for a few months. I’ve only done 3 or 4 deals in 2022. 10 or so deals were done in 7 or so months in 2021. I guess i didn’t do anything special other than waiting to be accredited.

 

[forchinet121]

let’s keep in mind that cyanide has been doing this for 3 years during the biggest boom in real estate prices, let’s see how he is doing in 10 years and whether he beats a standard s and p 500 fund

 

[emergentmd]

Will be interesting to see how many of these RE portfolios fare in the next two years as interest rates balloon and prices start to go down

I bet home prices will drop 10-30% over the next 12 months. Inflation keeps going up, fed will keep increasing rates. I see home interest rates going up to 8-10%. The low end homes will still be bought by investors and 1st time home owners. The higher end homes 500K+ will sit. 1M homes will sit even longer.

But rates will go down under 5%, Americans are just too used to this drug which will promptly see house prices keep going up.

My RE portfolio is long term and I see the next 6-12 months as a buying opportunity with cash accumulation. Starting renovations, will buy when rates go to 8+% and prices plummet, but no way am I buying in this market.

 

[emergentmd]

A caveat to this, and something to think about with your kids. I will be starting to open a custodial account under my kids name next year and start to contribute 16K/yr to each kid into an S&P fund. Time is your friend.

 

[bravotwozero]

Yeah I already have UTMA accounts up and running for the munchkins.

 

[PianoMedic]

A caveat to this, and something to think about with your kids. I will be starting to open a custodial account under my kids name next year and start to contribute 16K/yr to each kid into an S&P fund. Time is your friend.

I personally decided to just use a taxable account instead of a custodial account. I’m setting aside from my other taxable investments, but I can create other accounts and “gift” the shares to them later. I don’t know how they responsible they will be with money, and I want to make sure they’re ready to handle it as well as give them some input into how it will come to them. The custodial accounts become theirs at 18 in most states without any way of reversing that or otherwise delaying it. Better tax treatment along the way in custodial, but if it’s all stock funds shouldn’t be much taxes paid on the dividends.

 

[Mad Jack]

I bet home prices will drop 10-30% over the next 12 months. Inflation keeps going up, fed will keep increasing rates. I see home interest rates going up to 8-10%. The low end homes will still be bought by investors and 1st time home owners. The higher end homes 500K+ will sit. 1M homes will sit even longer.

But rates will go down under 5%, Americans are just too used to this drug which will promptly see house prices keep going up.

My RE portfolio is long term and I see the next 6-12 months as a buying opportunity with cash accumulation. Starting renovations, will buy when rates go to 8+%, but no way am I buying in this market.

I'm looking for a 30% market decline, after which I'll buy. I'm hoping it goes full 2008, with the catalyst this time being overleveraged institutional investors buying single family homes that have lost significant value and which require refinancing within the next few years due to the difference between corporate and individual mortgage loans

 

[xaelia]

Everyone who touched real estate in the last few years looks like a genius; good timing, congratulations.

It's not always like this.

 

[forchinet121]

Everyone who touched real estate in the last few years looks like a genius; good timing, congratulations.

It's not always like this.

Exactly..and they won’t be looking like a genius for long

 

[Splenda88]

I'm looking for a 30% market decline, after which I'll buy. I'm hoping it goes full 2008, with the catalyst this time being overleveraged institutional investors buying single family homes that have lost significant value and which require refinancing within the next few years due to the difference between corporate and individual mortgage loans

That will definitely accelerate my FIRE...

 

[cyanide12345678]

Exactly..and they won’t be looking like a genius for long

*yawn* you guys have too much fear. **** happens, you deal with it, one learns to manage. If we just live in fear then no attempts will be made. You gotta take a few cracks at life, what’s the worst thing that happens, i lose a little money? Life goes on.

The market is NOT going to drop 30 percent. Maybe 10-15 percent. In some areas the rate of growth will plateau and slow down. This is not 2008. The LTV ratios are at historical lows. People have significant equity. In 2008 it was common place to cash out refinance up to the entire value of the home to have a little spending money, and as soon as those homes dropped in values , they were under. Yes the headlines are reading that foreclosures are up 4 times, but they are actually significantly below their historical norms. Inventory is about 2 months worth right now. In 2008 inventory climbed to 13 months worth. A lot of demand still exists. Demographics matter. My generation, the millennials, one of the largest generations just entered prime home buying age. And guess what, contrary to popular belief, they do have money. And you do know that 17 percent of all home buying is now by investors? And a lot of it is Cash purchases. Who cares what the interest rate is if you’re buying with cash? And did you know that when institutional investors buy a home, most likely that home is being sold from one investor to the next as part of a portfolio and never enters the open market again. And do you know what the locked in effect is? A huge chunk, i forget the exact number, has already refinance their home at one of the lowest ever interest rates. These people really aren’t going to be super interested in making big changes and taking their 2.75 percent mortgage and exchanging it for a new home with a 6 percent mortgage. All these things will keep supply limited. Demand is weakening, the average number of offers have dropped, houses are on market for an average of 30 days, but it used to be an average of 90 days. We’re not even back down to what a normal market is yet from a supply perspective.

Historically in every previous recession other than 2008, real estate values held or went up. This isn’t 2008 and it’s not going to be if you really read the actual figures and data and compare the two. Prices will probably come down because of demand, but you’re not magically going to have 13 months of supply just sitting around.

 

[emergentmd]

Everyone who touched real estate in the last few years looks like a genius; good timing, congratulations.

It's not always like this.

This is why you dollar cost average be in RE or the Market. You can't time, otherwise there would be no risk. No one is telling to dump your whole life savings in RE tomorrow. But There is no reason to start then slowly add on. After 10 yrs and 5+ properties, it won't matter if RE goes down 30% b/c you have cash flow income.

Same with the stock market. Put it in, keep putting it in, and you will be fine. People who time the market, get scared and pull it out at the bottom are the ones who tend to regret investing.

Paralysis by analysis is what will kill any investment strategy. Time and income is your friend. It won't matter what you do when you are 60. It won't matter what you do when you are 30.

Ask anyone who invested in RE right when it peeked pre 2008 and held. They are doing just fine right now. The ones who suffered were the ones who was hoping to hit the lottery and leveraging without the funds to weather any headwind.

 

[Splenda88]

This is why you dollar cost average be in RE or the Market. You can't time, otherwise there would be no risk. No one is telling to dump your whole life savings in RE tomorrow. But There is no reason to start then slowly add on. After 10 yrs and 5+ properties, it won't matter if RE goes down 30% b/c you have cash flow income.

Same with the stock market. Put it in, keep putting it in, and you will be fine. People who time the market, get scared and pull it out at the bottom are the ones who tend to regret investing.

Paralysis by analysis is what will kill any investment strategy. Time and income is your friend. It won't matter what you do when you are 60. It won't matter what you do when you are 30.

Ask anyone who invested in RE right when it peeked pre 2008 and held. They are doing just fine right now. The ones who suffered were the ones who was hoping to hit the lottery and leveraging without the funds to weather any headwind.

Bought in 2011 using 40k (30k down payment and 10k repair) on 150k property. 10 yrs later in 2011, property is paid off, worth 550k and generating 1.5k/month cash flow

My regret was not buying few more additional condos (2BR/1BA) that were selling for 15k at that time. That was in south FL,... not the midwest. Could have been retired now.

EVERY investment involves some risk and it is up to the individual to do his/her homework,

 

[emergentmd]

Bought in 2011 using 40k (30k down payment and 10k repair) on 150k property. 10 yrs later in 2011, property is paid off, worth 550k and generating 1.5k/month cash flow

My regret was not buying few more additional condos (2BR/1BA) that were selling for 15k at that time. That was in south FL,... not the midwest. Could have been retired now.

EVERY investment involves some risk and it is up to the individual to do his/her homework,

15K for a condo? Geeezzz.

I have a relative offered 20 yrs ago a apt complex in the Austin area for 2M, 200 Units. His dumb wife didn't let him buy it, all bank financed. That thing is probably worth 20- 50M

 

[Splenda88]

15K for a condo? Geeezzz.

I have a relative offered 20 yrs ago a apt complex in the Austin area for 2M, 200 Units. His dumb wife didn't let him buy it, all bank financed. That thing is probably worth 20- 50M

That is even more painful.

 

[Rekt]

No way on earth houses dropping 30%.

 

[bravotwozero]

Prices won’t drop period. The rate at which prices are increasing are going to drop, but not the prices.


Anyway, what do you guys think about investing in rental properties to grad students near college campuses? Grad students tend to be busy, have student loan money, tend to live near their campus. Should make for a good supply of reliable renters....

 

[ForGoodLuck]

My income was 450k for the first 2 years as 1099 and 400k ish w2 after some benefits accounted for since November. I cut down on patient volume and took a pay cut to go rural ER in november 2021 when we moved cities.

Agree seems like a lot of work for.. not much. I'll make about 450k W2. Doing 14 8-9hr shifts. Can just add two PRN shifts a month and add >60-70k a year.

The future of EM is grim, i don’t even know if there will be extra shifts available to be picked up 5 years from now with the projected surplus.

forgive my ignorance, and probably the same question that everyone asks: as a third year med student looking at EM and hearing everyone talking about what a dumpster fire it is, are my standards too low? I keep hearing what everyone is saying but for someone who's happy to practice rural ER, live off of 5 figures, and not concerned with retiring too early, I can't imagine compensation getting low enough or competition high enough to really affect how I want to live.

I get that a lot of people want to make top dollars and live in popular cities, and EM is looking like crap for that, but the EDs I want to work at you're lucky to have a board certified EM doc on shift. I feel like my standards are just low and I'd be okay with that, I don't know what I'd do other than EM. but I don't want to close my eyes to everyone shouting to jump ship. But finding actual numbers and salaries is proving difficult.

 

[GonnaBeADoc2222]

My friend is a nurse and clears 6 figures easy. was that a typo? Did you mean to say 6?

 

[Rekt]

forgive my ignorance, and probably the same question that everyone asks: as a third year med student looking at EM and hearing everyone talking about what a dumpster fire it is, are my standards too low? I keep hearing what everyone is saying but for someone who's happy to practice rural ER, live off of 5 figures, and not concerned with retiring too early, I can't imagine compensation getting low enough or competition high enough to really affect how I want to live.

I get that a lot of people want to make top dollars and live in popular cities, and EM is looking like crap for that, but the EDs I want to work at you're lucky to have a board certified EM doc on shift. I feel like my standards are just low and I'd be okay with that, I don't know what I'd do other than EM. but I don't want to close my eyes to everyone shouting to jump ship. But finding actual numbers and salaries is proving difficult.

I took a location hit to make as much as I do. Everyone in my class took jobs making quite a bit less than me. Also, you're ~5 years out from landing a job. The projected 10,000 oversupply of EM physicians was estimated to be by 2029, which means before then, there's many underemployed docs and anyone concerned about making any decent amount of money will be flocking to the less desirable and rural jobs to pay off loans asap. By the time you're here, there's not going to be much to pick from.

Also, you don't have a single clue what you're talking about in regards to the bolded. You're barely days into the hardest part of medical school. Then you get to residency where the rest of who you were is removed from your body. You don't have any idea what real EM is like. Even if you were the extremely rare person to "accept low wages", you're hurting everyone else in the specialty by being selfish.

 

[ForGoodLuck]

My friend is a nurse and clears 6 figures easy. was that a typo? Did you mean to say 6?

No, not a typo. I’m sure I’ll clear 6 figures but that’s my point. I don’t need or want to spend hundreds of thousands of dollars annually, I’m really happy to live a lifestyle off of <100k and put the rest to investments, and I can’t imagine salaries will drop below an amount that I could live and retire comfortably even with a declining market.

 

[ForGoodLuck]

I took a location hit to make as much as I do. Everyone in my class took jobs making quite a bit less than me. Also, you're ~5 years out from landing a job. The projected 10,000 oversupply of EM physicians was estimated to be by 2029, which means before then, there's many underemployed docs and anyone concerned about making any decent amount of money will be flocking to the less desirable and rural jobs to pay off loans asap. By the time you're here, there's not going to be much to pick from.

Also, you don't have a single clue what you're talking about in regards to the bolded. You're barely days into the hardest part of medical school. Then you get to residency where the rest of who you were is removed from your body. You don't have any idea what real EM is like. Even if you were the extremely rare person to "accept low wages", you're hurting everyone else in the specialty by being selfish.

I can respect that I’m ignorant, I said as much and I don’t mean to undervalue anything you’re doing or saying. I lived a life before med school and I’ve been in the ER before, and I get it; I can’t get it until I’m there.

You’re saying there’s no way to “ethically” enter EM now then?

 

[RustedFox]

I can respect that I’m ignorant, I said as much and I don’t mean to undervalue anything you’re doing or saying. I lived a life before med school and I’ve been in the ER before, and I get it; I can’t get it until I’m there.

You’re saying there’s no way to “ethically” enter EM now then?

What does this word "ethical" mean to you, in this discussion?

 

[ForGoodLuck]

What does this word "ethical" mean to you, in this discussion?

The statement was that if I’m willing to accept low wages as a consequence of jumping in now, I’m being selfish and hurting everyone in the specialty. by extension I assume the claim is that it’s selfish/harmful/unethical for anyone going into EM right now, knowing that it will drive down wages given the impending oversupply.

If that’s true I guess I’m going to be selfish, because yeah I’m not going to ditch the specialty for that cause

 

[emergentmd]

The statement was that if I’m willing to accept low wages as a consequence of jumping in now, I’m being selfish and hurting everyone in the specialty. by extension I assume the claim is that it’s selfish/harmful/unethical for anyone going into EM right now, knowing that it will drive down wages given the impending oversupply.

If that’s true I guess I’m going to be selfish, because yeah I’m not going to ditch the specialty for that cause

Anyone who is calling anyone selfish for doing what is right for them is just a hater/hypocrite. So tiresome when someone tells another what to do when they themselves would likely make decisions that is best for themselves.

Do what you feel best. If you want to live in a rural area, enjoy your job, work til you are 70 then go ahead. Do what makes you happy.

 

[Clean7795]

Making 5 figures doing medicine is the most idealistic medical student bull**** I've heard. You're going to be working nightfloat or 24 hr call shifts on off-service rotations. Nights, evenings, and weekends on ER rotations, continuing onto attendinghood. You'll be missing time with your partner and children.

On top of that you're going to be on the frontline of physicians getting ground down by a society that demands impossible perfection from us. Eventually someone's going to take you to court to try to clean you out, even if you didn't slip up. On top of that you'll be dealing with lack of autonomy because C-suites run the hospital and crap that other services/specialties will dump on you.

Sorry that statement just triggered me.

forgive my ignorance, and probably the same question that everyone asks: as a third year med student looking at EM and hearing everyone talking about what a dumpster fire it is, are my standards too low? I keep hearing what everyone is saying but for someone who's happy to practice rural ER, live off of 5 figures, and not concerned with retiring too early, I can't imagine compensation getting low enough or competition high enough to really affect how I want to live.

 

[PianoMedic]

Making 5 figures doing medicine is the most idealistic medical student bull**** I've heard. You're going to be working nightfloat or 24 hr call shifts on off-service rotations. Nights, evenings, and weekends on ER rotations, continuing onto attendinghood. You'll be missing time with your partner and children.

On top of that you're going to be on the frontline of physicians getting ground down by a society that demands impossible perfection from us. Eventually someone's going to take you to court to try to clean you out, even if you didn't slip up. On top of that you'll be dealing with lack of autonomy because C-suites run the hospital and crap that other services/specialties will dump on you.

Sorry that statement just triggered me.

The poster is saying they want to live on five figures, not make five figures. They clarified in a subsequent post they want and expect six figures so that they can invest/save. So plan to live like a resident forever. I also had that plan, but second kiddo blew that plan up lol.

 

[Mad Jack]

Everyone who touched real estate in the last few years looks like a genius; good timing, congratulations.

It's not always like this.

The same was said in 2007

 

[Mad Jack]

The statement was that if I’m willing to accept low wages as a consequence of jumping in now, I’m being selfish and hurting everyone in the specialty. by extension I assume the claim is that it’s selfish/harmful/unethical for anyone going into EM right now, knowing that it will drive down wages given the impending oversupply.

If that’s true I guess I’m going to be selfish, because yeah I’m not going to ditch the specialty for that cause

Someone is going to do it. Plenty of FMGs and IMGs willing to take those spots just to work in the US, because it'll pay more than staying home or not matching at all, depending on their citizenship

 

[ForGoodLuck]

Yeah I guess that was not clear. I'm "willing to accept low wages" in terms of a) being willing to go into the field even though salaries are likely to decrease from where they are now and b) being willing to trade salary for lifestyle and location, like everything works. I'll still be negotiating my salary and going for as much as I can.

I get that the impending oversupply & midlevel situation are valid concerns that are more than enough to deter some people from the field, rightly so, I appreciate the genuine warnings. Same thing with people trying to warn away students who think EM is a great lifestyle specialty, i totally understand breezing through EM rotations in medical school and overlooking the reality of split shifts, nights, holidays, trauma, and burnout, especially for people who haven't worked in the field or really at all, which is a bunch of my classmates. I get that a lot of people say that they'll be super happy working nights in Montana and living like a resident and aren't being honest with themselves, and I'm sure I just sound like another one of them.

 

[RustedFox]

Yeah I guess that was not clear. I'm "willing to accept low wages" in terms of a) being willing to go into the field even though salaries are likely to decrease from where they are now and b) being willing to trade salary for lifestyle and location, like everything works. I'll still be negotiating my salary and going for as much as I can.

I get that the impending oversupply & midlevel situation are valid concerns that are more than enough to deter some people from the field, rightly so, I appreciate the genuine warnings. Same thing with people trying to warn away students who think EM is a great lifestyle specialty, i totally understand breezing through EM rotations in medical school and overlooking the reality of split shifts, nights, holidays, trauma, and burnout, especially for people who haven't worked in the field or really at all, which is a bunch of my classmates. I get that a lot of people say that they'll be super happy working nights in Montana and living like a resident and aren't being honest with themselves, and I'm sure I just sound like another one of them.

Anybody?

HINT: You may not have that choice, nor the opportunity to negotiate anything.

 

[Backpack234]

Whoa. Did i just read a thread about real estate syndication that didn't say "Check out P*** K**'s course!"

I've seen some recommendations here. But I'm completely new to syndications. "find the right manager" ok. but how? What's the best resource to learn?

 

[ForGoodLuck]

Anybody?

HINT: You may not have that choice, nor the opportunity to negotiate anything.

And that's okay?

 

[ProReduction]

Sharing this milestone with folks to possibly inspire others and maybe share with others some alternate investments. This july marks exactly 3 years from my residency graduation and we hit the 1M net worth milestone a few days ago.

Some of our success has been because of the usual things: spent less, invested a big chunk of our income, lived in a cheap-ish cost of living area, negotiated for higher incomes.

But a lot of our success has been because of a very non-traditional approach to investing. Here's a breakdown of our portfolio and the significant alternate investments that I would highly encourage others to educate themselves about.

Current portfolio:

4% cash, 36% Passive syndicate real estate investments, 30% options (premium harvesting through naked puts), 20% in retirement accounts (of which 90% stocks and 10% bonds), and lastly 10% net worth in our personal home equity.

I've talked plenty about options in the past, so not going to dive into that topic. But in the last 1 year, I've also jumped head first into the world of passive syndicate investing which I've never talked about here and wanted to give others a glimpse into these opportunities that most doctors qualify to invest in:

I currently have about ~370k in 14 different syndications. The following is the breakdown of these investments:

Syndications I've invested in:

1) 85k in office space (30k in Atlanta Financial Center and 30k in 200 W jackson Chicago which is the building next to Sears tower - both these are with nightingale properties as sponsor, 25k in an office space opposite the great mall of America in Minneapolis (sponsor = Hemel companies)).

2) 215k in multifamily ( 25k in an Apt complex in Miami (sponsor = Lynd capital), 25k in an apartment building in orlando, 30k Ashcroft capital which is a multifamily fund consisting of 6 apt complexes, 40k with BAM capital - another fund with 6 properties, 15k in an Apt in Des Moine, 25k with Foulger Pratt in a DC new construction and another 25K with them in a Apt complex in Fort worth Tx, 30k in 3 apt complexes in Norman OK with trident real estate).

3) 40k in Self storage of which 20k is with a fund with Van west group, and 20k with Ziffcre, will increase to 50k over this year as more properties are acquired in the fund.

4) 30k in medical office buildings through NEMI fund 4.

All except a couple of the above investments have been through either crowdstreet, equitymultiple, and realcrowd. Crowdstreet has some of the best deal flow and some really great deals have come on it.

Pros of syndications:
1) Diversity - multifamily, office, industrial, storage, retail, geographic diversity, sponsor diversity with a few clicks while sitting at home.
2) Truly passive and headache free once you've done your due diligence.
3) Tax benefits of paper losses due to depreciation
4) 15 - 20% returns depending on the deal. Roughly you're looking at doubling your money in 5 years on average in real estate.
5) Rental checks
6) Leverage sponsor experience and expertise. I mean someone with 1B of assets under management is probably better equipped at maximizing a property than I am.
7) no correlation with the stock market, true diversity.

Cons of syndications:
1) A LOT of state income tax forms -_- Basically state income tax forms for every state I'm a K1 partner in a property.
2) No control - Sponsor decides everything

How to start:
1) Read "the hands off investor".
2) Join crowdstreet and get a taste of reviewing deals

Last thoughts:
1) debt is a tool if used wisely. Too many doctors are rushing to pay off "good debt" like mortgages. I paid off my student loans too aggressively, I wish I hadn't, I'd be worth a lot more today if I hadn't.
2) EM was financially good to me but I wish I had done something else. In hindsight I would pick Radiology, ortho, FM, anesthesia, or PM&R over EM. But I can't complain honestly. 3 years ago I was worth around negative 100k when I graduated residency, so EM has helped me do a 1.1M swing in net worth in 3 years.
3) I think I'll consider myself financially independent in another 2-3 years when we hit 2M in networth given that I don't rely on the SP500 for returns (mostly not at least for a majority of my portfolio).

I hope this was helpful to others, if anyone has any questions about details about the deals that I'm in or my thoughts about the sponsors, then PM me and I'd be more than happy to discuss these things.

Edit: This is not investment advice, do your own due diligence, I'm not selling anything. But just throwing out investment ideas for doctors who are accredited investors who have a higher risk appetite than a stock:bond portfolio.

Can you please explain your options strategy in-detail because I must be missing something. You say you have 30% of your portfolio (300k) in "options (premium harvesting through naked puts)". Either you are selling naked puts way out-of-the-money and always making a very small amount with these contracts (maybe you have a very good IV on them working with very volatile underlying equities), or you are near-the-money with a much better premium for you, in which case with the market down 20% broadly earlier this year, I would have expected your contracts to be getting exercised left and right during Q1 and Q2 2022 and you eating big losses. Is it rich via 1,000 $10 bills over time or have you taken big losses this year?
Also, do you have the highest level options trading level approval through your broker? Uncovered options is usually highest level. Or are you simply ensuring that your potential losses can be covered by the 300k in your account (some brokers allow uncovered option trading with lower level approval if account can cover all potential losses)?

 

[CoolDoc1729]

Yeah I guess that was not clear. I'm "willing to accept low wages" in terms of a) being willing to go into the field even though salaries are likely to decrease from where they are now and b) being willing to trade salary for lifestyle and location, like everything works. I'll still be negotiating my salary and going for as much as I can.

I get that the impending oversupply & midlevel situation are valid concerns that are more than enough to deter some people from the field, rightly so, I appreciate the genuine warnings. Same thing with people trying to warn away students who think EM is a great lifestyle specialty, i totally understand breezing through EM rotations in medical school and overlooking the reality of split shifts, nights, holidays, trauma, and burnout, especially for people who haven't worked in the field or really at all, which is a bunch of my classmates. I get that a lot of people say that they'll be super happy working nights in Montana and living like a resident and aren't being honest with themselves, and I'm sure I just sound like another one of them.

You sound like a genuinely decent person, and this is my kindest way to put this.
I LOVE the actual work of my job. Emergency Medicine is super cool, no question. I am 10 years out and have been at the same place the entire 10 years, the last 7 doing nights only. I enjoy my colleagues and my nursing staff (what’s left of it ) and I have no immediate plans to leave.
Yet
There is no way on earth I think anyone could work FT into Medicare age. The other stuff wears on you. I still feel anxious every time I get an email from my boss, until I open and confirm it’s Addressed to the group and not just me. I don’t even do anything wrong - I’m by no means a troublemaker - it’s just there’s a constant background noise of nurses, other physicians, and especially patients complaining. It’s not clear to me that my hospital administration even wants to hire staff so we could practice medicine somewhere besides the waiting room. Every few months the trauma activation criteria change. This subsidiary doesn’t have this and that specialty coverage, so we have to accept those. I’ve received 3 NOIs. One was dropped, one has settled, one is ongoing. They drag out for literally YEARS and I also feel anxious every time I get a correspondence related to those.
So as it is my non medical very low income spouse and I are working on an exit strategy, even though I probably will work in some capacity until I physically can’t.

If I added to that : there’s a decent chance you won’t have a job at all …?! Then it would be odd to still pick the specialty.

Of course it’s not immoral for you to still pursue EM. One person taking any amount of money doesn’t really affect other peoples prospects or pay. But you should be warned that we (ER Docs) have no ownership of our patients , and we (CMG Employees) have no control over our staffing or rate of pay, so the jobs will be harder to find with each passing year. If you have a specific area in mind , they could easily not have any openings for years. I’d hate for it to come to be 2027 or 2028 and you’re left with places that are just as willing to hire a PA to staff solo, or an FM doc.

I think if I was in your position I would either do fp or anesthesia, myself personally - only you can decide what the right path is.

 

[ForGoodLuck]

There is no way on earth I think anyone could work FT into Medicare age.

I definitely won't be working ft into medicare age, haha. I have no delusions about that.

Thanks for the respectful input. These aren't small concerns and I'm considering them. I've worked in a few EDs and have good connections with a couple good democratic groups, and if I didn't I would probably have more reservations re finding a job.

 

[emergentmd]

No way on earth houses dropping 30%.

I think the high end homes could easily drop 30% if interest rates goes up past 8%. I have already seen similar sized homes on the same block in the 1M range that last year was going for 300K over list at 1.4M with 10+ offers and now has been sitting for over 60 dys with 200K price reduction. Not really apples to apples as the 1.4M home was move in ready and the now 800K home after 200K price reduction will require about about a 300K renovation to be equivalent but it still will be a 300k price cut from last year after a comparable renovation.

Lower priced homes will not go down as much but 700K homes is seeing big price reductions in my area.

 

[namethatsmell]

I think the high end homes could easily drop 30% if interest rates goes up past 8%. I have already seen similar sized homes on the same block in the 1M range that last year was going for 300K over list at 1.4M with 10+ offers and now has been sitting for over 60 dys with 200K price reduction. Not really apples to apples as the 1.4M home was move in ready and the now 800K home after 200K price reduction will require about about a 300K renovation to be equivalent but it still will be a 300k price cut from last year after a comparable renovation.

Lower priced homes will not go down as much but 700K homes is seeing big price reductions in my area.

Unemployment rate is key. It's low. And available housing supply. Also low.

Unless unemployment skyrockets (which there is no signs of) and people suddenly can't pay their (non-excessively-leveraged-2008-era) mortgages, existing homeowners will just hold their properties to avoid a higher rates/monthly payments on a new purchase. Sure, some over-leveraged institutional investors may sell in the short term, but they'll likely be offered in bulk to other institutionals for a clean deal rather than being put on the market to the public. Supply will still remain low relative to demand.

Barring unexpected changes in the above, I'd wager prices stay roughly flat or maybe drop by ~5% in the next 1-3 years before things start picking up again.

 

[doctalaughs]

Unemployment rate is key. It's low. And available housing supply. Also low.

Unless unemployment skyrockets (which there is no signs of) and people suddenly can't pay their (non-excessively-leveraged-2008-era) mortgages, existing homeowners will just hold their properties to avoid a higher rates/monthly payments on a new purchase. Sure, some over-leveraged institutional investors may sell in the short term, but they'll likely be offered in bulk to other institutionals for a clean deal rather than being put on the market to the public. Supply will still remain low relative to demand.

Barring unexpected changes in the above, I'd wager prices stay roughly flat or maybe drop by ~5% in the next 1-3 years before things start picking up again.

Easy to say you can predict the housing market.

House prices have already fallen in my neighborhood 15% just in the last 3-4 months. Granted - these were high end homes and people were paying ridiculous nonsense prices (ie 300k over ask on a 1.7 mill home which I think is probably really worth 1.5 mill).

I saw a lot of people buy 2nd and 3rd vacation homes in the last 5 years who earn less than I do. I guess if they can rent/manage them well- then they might be ok - but I have a feeling some will be in trouble.

I also don’t think unemployment staying rock bottom is a given. If we do enter a recession demand could drop off quickly and employers could easily flip-flop from shortages to layoffs. Those vacation homes won’t be too attractive if they are worth 30% less than before and these people don’t have a job.

 

[namethatsmell]

Easy to say you can predict the housing market.

House prices have already fallen in my neighborhood 15% just in the last 3-4 months. Granted - these were high end homes and people were paying ridiculous nonsense prices (ie 300k over ask on a 1.7 mill home which I think is probably really worth 1.5 mill).

I saw a lot of people buy 2nd and 3rd vacation homes in the last 5 years who earn less than I do. I guess if they can rent/manage them well- then they might be ok - but I have a feeling some will be in trouble.

I also don’t think unemployment staying rock bottom is a given. If we do enter a recession demand could drop off quickly and employers could easily flip-flop from shortages to layoffs. Those vacation homes won’t be too attractive if they are worth 30% less than before and these people don’t have a job.

I never claimed to have a clearer crystal ball than anybody else posting their opinion. But simple market forces are what they are. A house priced 20% above last years comps deserves to sit and have a price reduction since it’s greedily overpriced; not a sign of a crashing market.

Sure, unemployment can worsen. Unexpected global phenomena can severely impact our economy (ie all of this decade).

I do think you’re right that the second home market will likely soften. But primary houses in desirable areas that non-1%ers can afford? Hard to imagine a big drop in the immediate future.

 

[doctalaughs]

I do think you’re right that the second home market will likely soften. But primary houses in desirable areas that non-1%ers can afford? Hard to imagine a big drop in the immediate future.

I suppose - although the “cheap” houses a mile away from me are supposedly worth 950k and they were like 350-400k 8-9 years ago. Much of the housing market doubled or tripled in the us in the last decade. Are we still in a “bubble”? Because it doesn’t seem like that is in line with wage increases and I don’t see how that is “affordable” to most Americans.

I look around at friends/neighbors who are engineers, accountants, IT folks etc that bought a lot of real estate in the last few years and think “either you earn a lot more than I thought or you are really over-levered”

People say 2008 can’t happen again — and maybe it can’t. However I don’t think many in 2007 saw it coming either. I know someone very well that was net worth 20-30mill on paper in 2007 (in real estate and that is after debt subtracted) that literally was bankrupt 2 years later.

 

[HemorrhagicShock]

Can you please explain your options strategy in-detail because I must be missing something. You say you have 30% of your portfolio (300k) in "options (premium harvesting through naked puts)". Either you are selling naked puts way out-of-the-money and always making a very small amount with these contracts (maybe you have a very good IV on them working with very volatile underlying equities), or you are near-the-money with a much better premium for you, in which case with the market down 20% broadly earlier this year, I would have expected your contracts to be getting exercised left and right during Q1 and Q2 2022 and you eating big losses. Is it rich via 1,000 $10 bills over time or have you taken big losses this year?
Also, do you have the highest level options trading level approval through your broker? Uncovered options is usually highest level. Or are you simply ensuring that your potential losses can be covered by the 300k in your account (some brokers allow uncovered option trading with lower level approval if account can cover all potential losses)?

Wondering about this as well. I had read the previous thread regarding stock trading and options, and the options strategy didn't seem like any kind of homerun. It seemed laden with a lot of risk if you aren't a 2-3+ year options/stock trading veteran. I guess the best time to learn is now!

 

[Taurus]

Rad here. I’ve been researching real estate for the past 9 months and just dropped my first $150k into a syndication. First of many. If you spend some time looking into it, you’ll see how amazing real estate is. The tax benefits, cash flow, and appreciation. Good advice and experienced investors on this thread.