Advice needed

[drseplo]

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Hello guys so I'm in a pretty unique situation

Before I start, please don't hate. I've only gotten to where I am through a ton of sleepless nights and missed parties. I've sacrificed more then I care to admit.

I'm a D2 and I'll be graduating without any debt. On top of that I will also have between 1.5 - 2 million dollars left over from the sale of a company that I helped found and sell during college. I am single and will be 26 years old when I graduate. In short very little responsibilities other than to myself and a bit of cash on hand.

Over the past couple of weeks I've been actively looking into buying a practice by the time D3 year rolls around. I believe that the experience I gained running my last business would help me succeed with this.

My question is this. I want to use the majority of my cash on hand to buy a dental practice. I don't want to go ahead and buy a big house or anything, I'd be fine renting an apartment for a couple more years. A thought that I wanted to fly by you guys is this. I'm interested in buying two practices, having one main practice that's established and another smaller for maybe 2 max dentists. I'm hoping that I can find a larger practice that's more of a multispeciality clinic so that I can funnel in any of the more complex cases from my other clinic into my main clinic, essentially keeping everything in house. This would also give me the opportunity to expand if I wanted to.

I've only met one other dentist that has this type of set up and he seemed to be running the whole thing pretty smoothly. He did all the cases he loved and had associates working on the more "boring" cases. Has anyone on here been involved with a type of dental practice like this? I would appreciate any advice. If anyone knows any threads where people have discussed topics similar to this please let me know/dm me!

Thanks!

Edit: I have just created this account in order to maintain some level anonymity. People judge others hardcore for everything nowadays....

 

[BMEndo]

Hello guys so I'm in a pretty unique situation

Before I start, please don't hate. I've only gotten to where I am through a ton of sleepless nights and missed parties. I've sacrificed more then I care to admit.

I'm a D2 and I'll be graduating without any debt. On top of that I will also have between 1.5 - 2 million dollars left over from the sale of a company that I helped found and sell during college. I am single and will be 26 years old when I graduate. In short very little responsibilities other than to myself and a bit of cash on hand.

Over the past couple of weeks I've been actively looking into buying a practice by the time D3 year rolls around. I believe that the experience I gained running my last business would help me succeed with this.

My question is this. I want to use the majority of my cash on hand to buy a dental practice. I don't want to go ahead and buy a big house or anything, I'd be fine renting an apartment for a couple more years. A thought that I wanted to fly by you guys is this. I'm interested in buying two practices, having one main practice that's established and another smaller for maybe 2 max dentists. I'm hoping that I can find a larger practice that's more of a multispeciality clinic so that I can funnel in any of the more complex cases from my other clinic into my main clinic, essentially keeping everything in house. This would also give me the opportunity to expand if I wanted to.

I've only met one other dentist that has this type of set up and he seemed to be running the whole thing pretty smoothly. He did all the cases he loved and had associates working on the more "boring" cases. Has anyone on here been involved with a type of dental practice like this? I would appreciate any advice. If anyone knows any threads where people have discussed topics similar to this please let me know/dm me!

Thanks!

Edit: I have just created this account in order to maintain some level anonymity. People judge others hardcore for everything nowadays....

Currently 26 here with a background in business startup and consulting, starting D1 in june. While I am nowhere near your level, I own rental properties that bring in a little over 100k a year and have a net positive worth of about 350k due to equity. My first advice to you is to go and seek a financial advisor. With that amount of money it would be a bad idea not to. For example, at first glance paying cash for a practice seems like a terrible idea. Idk exactly what the interest rates are like for practice loans but let's say they are 5%. By paying cash you are limiting yourself to a 5% return on that money. You can definitely invest that money somewhere else and get a higher rate of return. Let someone else's money work for you. This is the kinda advice a financial advisor can give you, except far better and more detailed. Dental town has professional financial advisors that give you a good idea of where to start. Also, hopefully you paid your taxes from the sale because the IRS will come for it.

 

[drseplo]

Currently 26 here with a background in business startup and consulting, starting D1 in june. While I am nowhere near your level, I own rental properties that bring in a little over 100k a year and have a net positive worth of about 350k due to equity. My first advice to you is to go and seek a financial advisor. With that amount of money it would be a bad idea not to. For example, at first glance paying cash for a practice seems like a terrible idea. Idk exactly what the interest rates are like for practice loans but let's say they are 5%. By paying cash you are limiting yourself to a 5% return on that money. You can definitely invest that money somewhere else and get a higher rate of return. Let someone else's money work for you. This is the kinda advice a financial advisor can give you, except far better and more detailed. Dental town has professional financial advisors that give you a good idea of where to start. Also, hopefully you paid your taxes from the sale because the IRS will come for it.

I've thought about that but one of the goals I have is to build a bit of a business around this. Although you are correct in saying that having over a 5% percent return on my cash is great if I can have a large enough practice with associates working for me well then even a 10% return will be nothing.

And trust me the tax man took his fair share. Let's just say the buy out was not for 2mil but much more haha.

 

[BMEndo]

I've thought about that but one of the goals I have is to build a bit of a business around this. Although you are correct in saying that having over a 5% percent return on my cash is great if I can have a large enough practice with associates working for me well then even a 10% return will be nothing.

And trust me the tax man took his fair share. Let's just say the buy out was not for 2mil but much more haha.

I may be misunderstanding what you are saying but I was trying to say that a 5% percent return is not that great. I would think that a bank would be willing to lend you a significant amount of money once they see you have roughly 2 million in cash reserves. Of course it's your money so do what you want but if you're looking to be business savy you really don't wanna spend your cash reserves unless you have to. You're also most likely going to want to diversify yourself once you feel that you've established your practice and you're gonna wish you had your cash reserves then. Then are many avenues to making high returns. I've invested a little less than 50k of my own money into investment properties since starting in 2016. I'm now making more than double that a year. If I had tried to pay cash for the first property I wouldn't have been able to finance the properties that came after it and would be earning significantly less. Hopefully that makes sense.

 

[drseplo]

I may be misunderstanding what you are saying but I was trying to say that a 5% percent return is not that great. I would think that a bank would be willing to lend you a significant amount of money once they see you have roughly 2 million in cash reserves. Of course it's your money so do what you want but if you're looking to be business savy you really don't wanna spend your cash reserves unless you have to. You're also most likely going to want to diversify yourself once you feel that you've established your practice and you're gonna wish you had your cash reserves then. Then are many avenues to making high returns. I've invested a little less than 50k of my own money into investment properties since starting in 2016. I'm now making more than double that a year. If I had tried to pay cash for the first property I wouldn't have been able to finance the properties that came after it and would be earning significantly less. Hopefully that makes sense.

What if the interest is in owning multiple practices though? Wouldn't using most of your cash to purchase multiple practices be wiser? I don't want to buy all the practices straight out cash, I would finance most of them. Just with my cash pile I would be able to put cash down for multiple practices.

 

[BMEndo]

What if the interest is in owning multiple practices though? Wouldn't using most of your cash to purchase multiple practices be wiser? I don't want to buy all the practices straight out cash, I would finance most of them. Just with my cash pile I would be able to put cash down for multiple practices.

Yeah, I can agree with that as long those downpayments are required or maybe potentially purchasing points to get a lower interest rate. Seems like a smart idea but definitely get as many opinions from professionals as you can.