How long did it take to buy your first practice

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MrSummerlin

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I have searched for this all day and cant find any threads about this.

How long did it take to buy your first practice from the point you finished school?

A major factor to this question is that most practicing dentists had lower tuition rates. So if you graduated with 300k from undergrad and grad loans. How long do you think it would have took you to buy your first practice?

Thank in advance.
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That's great to hear and great to hear for you! On the realistic side for many of us, could you answer the second question. How long do you think it would realistically take for you to feel comfortable, and also a bank to feel comfortable to finance you if you graduated with 300k of loans?

Also to side track while youre adding your input. Has working for yourself been as comfortable of a transition as you would have thought and would have liked it to be? If you are working for a family/friend owner that is selling it to you what has he emphasized about owning a dental practice?

I am going for a little deeper dialogue if you would please be willing to, but thanks no matter what
 
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I graduated with a lot of debt due to me being a ******* and living way beyond my means in dental school.

I have not purchased a practice yet, but feel like I can within 5 years of being out of school. I know I can pay my loans off within 5 years, but that also means I'm not saving a whole bunch. My plan is to save a bunch and pay my loans at least half way down by then because I feel like having a stack of cash is important if you're going to take on the risk of ownership.
 
The stack of cash and half of the debt paid down is what I thought would be the best route as well as. Thanks for answering.
 
Isn't the best way to pay off your student loans to buy a practice immediately upon graduating?
 
Frank22 said:
Isn't the best way to pay off your student loans to buy a practice immediately upon graduating?
Click to expand...

From the research I have done on my own with 300k over 20yrs @ 7% and another 400k over 7yr @7% for the practice equate to 100k in payments per year. Thats kinda of scary to me thats why I personally was wondering. At what point did past dentists buy their first practice and feel comfortable doing it. And how long it took them because thats my ultimate goal.
 
While we're having this discussion, is it feasible to buy a practice immediately upon graduation if your debt load is very low?
 
MrSummerlin said:
From the research I have done on my own with 300k over 20yrs @ 7% and another 400k over 7yr @7% for the practice equate to 100k in payments per year. Thats kinda of scary to me thats why I personally was wondering. At what point did past dentists buy their first practice and feel comfortable doing it. And how long it took them because thats my ultimate goal.
Click to expand...

You have to recall that the payments for your practice are taken out of the gross production of your practice. An average practice should produce about $650,000 a year worth of dentistry assuming one has a single dentist working. Payments for the practice than correlate to $72,444.84 a year, leaving your practice with $577,555.16 a year before other expenses for the first seven years (assuming one doesn't see an increase in production, which obviously isn't true). If you net $200,000 a year, than after paying off yearly student loans you are left with $172,089.20. After the first seven of paying off your practice and the increased production that comes with time you should be making more than enough to keep up with payments and enjoy a luxurious lifestyle.

7 Iron,
It certainly is feasible to apply and receive a loan immediately upon graduating (although I can't be certain of the percentage of those that are approved for them, I am fairly certain that it is rather high).
 
Frank22 said:
You have to recall that the payments for your practice are taken out of the gross production of your practice. An average practice should produce about $650,000 a year worth of dentistry assuming one has a single dentist working. Payments for the practice than correlate to $72,444.84 a year, leaving your practice with $577,555.16 a year before other expenses for the first seven years (assuming one doesn't see an increase in production, which obviously isn't true). If you net $200,000 a year, than after paying off yearly student loans you are left with $172,089.20. After the first seven of paying off your practice and the increased production that comes with time you should be making more than enough to keep up with payments and enjoy a luxurious lifestyle.


7 Iron,
It certainly is feasible to apply and receive a loan immediately upon graduating (although I can't be certain of the percentage of those that are approved for them, I am fairly certain that it is rather high).
Click to expand...

Not to be rude but were leading off the topic. I have a genuine interest from those that have been through sacrifices of buying a practice after pulling themselves out of student debt like uthscsaalum.
 
MrSummerlin said:
I have searched for this all day and cant find any threads about this.

How long did it take to buy your first practice from the point you finished school?

A major factor to this question is that most practicing dentists had lower tuition rates. So if you graduated with 300k from undergrad and grad loans. How long do you think it would have took you to buy your first practice?

Thank in advance.
Click to expand...
4 months. I did a start-up. Best decision ever. 👍
 
Cold Front said:
4 months. I did a start-up. Best decision ever. 👍
Click to expand...

I must say that is pretty bold of you to do. Why did you think it was the right time after only 4 months with loan debt? Were banks readily opening their wallets to help you with finanacing?
 
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4 years for me. I bought my first house 6 months after graduation. Then, I sold that house for a very nice profit. I used a part of that profit to pay down my student loan debt and a part of it for a down payment for a 2nd house. I later sold that 2nd house in 2006 (right before the housing market crashed) and used the profit to pay off my student loans.

After 4 years of hard work, I had about $50k on my saving account. I had to borrow an additional $70k from a local bank to set up my 5 op 1350 sf ortho office from scratch. When I started that office, I saw patients on Saturdays and Sunday and I still kept my full time job at the dental chain on the weekdays. When my practice got more patients, I slowly cut my associate days at the dental chain.

I think it's easier for a specialist like me to start an office because I don't need to work at my practice full time. Therefore, I can earn additional income by working for someone else. I currently have 3 offices and I only have to work 12 days/month at these 3 offices. ColdFront is a GP and he managed to do it after 4 months....that's pretty awesome.
 
charlestweed said:
4 years for me. I bought my first house 6 months after graduation. Then, I sold that house for a very nice profit. I used a part of that profit to pay down my student loan debt and a part of it for a down payment for a 2nd house. I later sold that 2nd house in 2006 (right before the housing market crashed) and used the profit to pay off my student loans.

After 4 years of hard work, I had about $50k on my saving account. I had to borrow an additional $70k from a local bank to set up my 5 op 1350 sf ortho office from scratch. When I started that office, I saw patients on Saturdays and Sunday and I still kept my full time job at the dental chain on the weekdays. When my practice got more patients, I slowly cut my associate days at the dental chain.

I think it's easier for a specialist like me to start an office because I don't need to work at my practice full time. Therefore, I can earn additional income by working for someone else. I currently have 3 offices and I only have to work 12 days/month at these 3 offices. ColdFront is a GP and he managed to do it after 4 months....that's pretty awesome.
Click to expand...

What was your financial circumstances that allowed you to purchase a house 6months from graduation? What was your student debt, savings amount, and annual salary?
 
tothepark said:
What was your financial circumstances that allowed you to purchase a house 6months from graduation? What was your student debt, savings amount, and annual salary?
Click to expand...
10-15 years ago, buying a house was just as easy as buying a car. If you could come up with a 10% (3% in some rural areas) down payment and 2 recent paystuffs, you got a house. Setting up a dental office from scratch during that time was also very easy.....just showed your DDS diploma and the bank gave you the loan.
 
Have banks changed the way they lend to dental practices because I always assumed that they would even lend to a new student with debt?
 
2 months and brand new startup with $80k loan from Schein. As long as you don't buy a lot of mostly unnecessary gadgets, you'll profit keeping it really cheap and simple with low overhead.
 
What do you guys estimate was the price of this dental practice? It's the anti-thesis of everything Charles Tweed stands for lol.

[YOUTUBE]http://www.youtube.com/watch?v=DAi3sZnOEeM[/YOUTUBE]
 
yappy said:
What do you guys estimate was the price of this dental practice? It's the anti-thesis of everything Charles Tweed stands for lol.

[YOUTUBE]DAi3sZnOEeM[/YOUTUBE]
Click to expand...

A spa, internet cafe and a game room? Wtf? Do they expect you to be waiting for hours at a time?
 
yappy said:
What do you guys estimate was the price of this dental practice? It's the anti-thesis of everything Charles Tweed stands for lol.

[YOUTUBE]http://www.youtube.com/watch?v=DAi3sZnOEeM[/YOUTUBE]
Click to expand...

Represents what America is all about: excessiveness and extravagance.
 
MrSummerlin said:
I must say that is pretty bold of you to do. Why did you think it was the right time after only 4 months with loan debt? Were banks readily opening their wallets to help you with finanacing?
Click to expand...
Because when everyone in my class was thinking about where they will practice and which residency they should apply... I was planning on where I should open my practice and which bank will accept my business model to get a practice loan.

WellsFargo (formerly Matsco) approved my practice loan, and I hope to pay it off Q4 of this year (within 18 months when my practice opened).

You educational loan debt is suppose to open more opportunities for you, not to restrict them from you.
 
Cold Front said:
Because when everyone in my class was thinking about where they will practice and which residency they should apply... I was planning on where I should open my practice and which bank will accept my business model to get a practice loan.

WellsFargo (formerly Matsco) approved my practice loan, and I hope to pay it off Q4 of this year (within 18 months when my practice opened).

You educational loan debt is suppose to open more opportunities for you, not to restrict them from you.
Click to expand...

Right. However this depends on the amount of debt you had compared to other students doesn't it?. (Not trying to get personal or ask what your debt load is). I feel like to some people it might not be financially feasible. So I am just curious, did you strategically pick your practice location based off of whether it was an area short of dentists? l ask this because my largest worry for graduating with a decent amount of debt and immediately opening practice is finding a nice patient pool in a timely enough manner to make payments on both school and practice debt....
 
7 Iron said:
A spa, internet cafe and a game room? Wtf? Do they expect you to be waiting for hours at a time?
Click to expand...

suarez 7 said:
Represents what America is all about: excessiveness and extravagance.
Click to expand...

haha. It's so funny how my views have changed since I'm about to graduate dental school and how I view this office.

I would have said the exact same thing when I was a young dental/predental student, but quite frankly, this guy will do extremely well for one reason: patients like it.

Patients want "value", and when you could get this as opposed to joe smo down the street, why would you go to him?

Here's the thing- why would a patient go to another office charging $4000-6000 for braces when they could also go to this one? They wouldn't, exactly.

What did this guy paid for in extras
5 ipads= $2500
"complimentary" spa= pays people $25 hr to do that times 2
spa chairs= $3000
games and other misc.= $10,000
extra square footage @ $80 square foot * 500 square feet= $40,000

Grand total for a kick ass office= ~$60,000

Ask yourself, how many cases extra does he have to do to pay this off?

Assuming a conservative $2000 profit margin per case of ~$5000
$60,000/2000= 30 cases

That's THREE- ZERO. This guy will do quite well and you can argue all day, but he knows what he's doing.

Oh, and don't forget about mom and the brothers and sisters who will be waiting in the lobby while "johnnie" is getting his bands on.
 
Elliott D said:
Right. However this depends on the amount of debt you had compared to other students doesn't it?. (Not trying to get personal or ask what your debt load is). I feel like to some people it might not be financially feasible. So I am just curious, did you strategically pick your practice location based off of whether it was an area short of dentists? l ask this because my largest worry for graduating with a decent amount of debt and immediately opening practice is finding a nice patient pool in a timely enough manner to make payments on both school and practice debt....
Click to expand...
The process of building an office from scratch takes a lot of time and patience. For me, it took about 18 months to pick a location, and I did this mostly while I was in school (end of my 3rd year of school). So when I graduated, I just focused on the rest, thanks to Dental Town and few doctors on these forums who provided valuable information throughout the process.

My location is saturated with dentists who are very close to retirement, who work 3-4 days a week and do limited dentistry (i.e. they don't see kids, oral surgery, etc). On the same token, this area is full of young demographics, so this was my niche. As a general dentist, I saw about 2,000 patients in my first year.

In the coming years, more of these old dentists in the vicinity will retire, which will help my office's growth in my 30's, 40's, 50's or even 60's if I end up working as long as they did.
 
Cold Front said:
The process of building an office from scratch takes a lot of time and patience. For me, it took about 18 months to pick a location, and I did this mostly while I was in school (end of my 3rd year of school). So when I graduated, I just focused on the rest, thanks to Dental Town and few doctors on these forums who provided valuable information throughout the process.

My location is saturated with dentists who are very close to retirement, who work 3-4 days a week and do limited dentistry (i.e. they don't see kids, oral surgery, etc). On the same token, this area is full of young demographics, so this was my niche. As a general dentist, I saw about 2,000 patients in my first year.

In the coming years, more of these old dentists in the vicinity will retire, which will help my office's growth in my 30's, 40's, 50's or even 60's if I end up working as long as they did.
Click to expand...

That sounds quite impressive. Planning everything out early seemed to really help you get on your feet quicker after graduation.
 
Is it that easy to pay off yr debt so fast? How much did u have if u dont mined?
 
Is it really that fast? Being able to pay off yr loans I mean.
 
Cold Front said:
Because when everyone in my class was thinking about where they will practice and which residency they should apply... I was planning on where I should open my practice and which bank will accept my business model to get a practice loan.

WellsFargo (formerly Matsco) approved my practice loan, and I hope to pay it off Q4 of this year (within 18 months when my practice opened).

You educational loan debt is suppose to open more opportunities for you, not to restrict them from you.
Click to expand...

What you did not anticipate was there would be an over supply of dentists, that PPO insurances use the over supply to reduce there cost at your expense.
 
dmacgolf70 said:
What you did not anticipate was there would be an over supply of dentists, that PPO insurances use the over supply to reduce there cost at your expense.
Click to expand...

Heck of a thread bump. It would be interesting to hear from Cold Front, but from what I can gather from other forum posts, he's doing just fine.
 
dmacgolf70 said:
What you did not anticipate was there would be an over supply of dentists, that PPO insurances use the over supply to reduce there cost at your expense.
Click to expand...
That's only true if you are running your business like those other dentists. The problem is always, how much a dentist is measuring himself against other dentists. Your dentistry is you, your chair side manners is you, your management skills for your staff is you, and so on. So dentists should let go on focusing on how bad an insurance is, but more so how much your patients appreciate your work, and how efficient your office runs.

Ultimately, your vision and efforts in your business will dictate the success of your business.
 
Cold Front:
In my state you have to be a dentist to own a dental practice. Is this also true in your location?
I am thinking of skipping residency as well and immediately buying an existing practice rather than a startup.
 
Why does it blow your mind?

Clinical dentistry and Owning a dental office are two separate things. One you go to school for, the other you don't.
Greg_Jones said:
It blows my mind that some of you started up right after school or even bought a practice right out of school. We NEVER recommend any new grads to do so. You should go work as an associate for minimum 2 years to learn the ropes (my opinion). If any one has questions feel free to ask in the thread I created:

http://forums.studentdoctor.net/thr...p-answer-any-questions.1097479/#post-15859553
Click to expand...
 
Business debt is not personal debt just like revenue is not income. Student loans do not matter in terms of practice ownership.
 
yappy said:
Business debt is not personal debt just like revenue is not income. Student loans do not matter in terms of practice ownership.
Click to expand...

This is true. Though I have heard some associate dentists trying to start a practice were denied a loan by the bank because the student loan balance was over 250k. Maybe there was something more to the story that the associate dentist failed to mention.
 
jeffk805dent said:
This is true. Though I have heard some associate dentists trying to start a practice were denied a loan by the bank because the student loan balance was over 250k. Maybe there was something more to the story that the associate dentist failed to mention.
Click to expand...
Yes. There is definitely more to the story.

Underwriters will look at the dental degree as the biggest decision they have to make, but if they are given a history of poor credit profile, they will not hesitate to turn you down.

That's why a dentist should never assume that they just can open a dental office with an instant credit approval, whether they are recent graduates or have 10+ years experince. You are still a consumer to the banks, and as much as they love dentists, you will still be subject to regular credit decision process.

It's not exactly science, it's an art to get a loan, but don't wear the wrong shoes to get one.
 
One thing I don't understand is how after you buy a practice, your school loans are considered business expenses. How does that work and how does that benefit you more compared to being an salary position?
 
Faux said:
One thing I don't understand is how after you buy a practice, your school loans are considered business expenses. How does that work and how does that benefit you more compared to being an salary position?
Click to expand...
If you are self-employed and paying school loan payments from your business account, then lenders (specially mortgage lenders) will consider that as a business expense. As long as you show 12 consecutive months history of those payments - when they calculate your personal debt to income ratio.

This will only benefit you as a business owner, but not as an employee, because an employee would make student loan payments from a personal account - hence a higher debt to income ratio than a business owner, if all other factors are the same.
 
Cold Front said:
If you are self-employed and paying school loan payments from your business account, then lenders (specially mortgage lenders) will consider that as a business expense. As long as you show 12 consecutive months history of those payments - when they calculate your personal debt to income ratio.

This will only benefit you as a business owner, but not as an employee, because an employee would make student loan payments from a personal account - hence a higher debt to income ratio than a business owner, if all other factors are the same.
Click to expand...

So its just a positive in regards getting a mortgage? I always had the impression that there was more to it than that, at least people always seem to bring that aspect up in regards to being a business expense. Thanks for answering 🙂.

How much was your practice? Or better yet, what prices do you see for starting up a practice in busy Boston? Or buying a practice that has a roster.
 
Cold Front said:
If you are self-employed and paying school loan payments from your business account, then lenders (specially mortgage lenders) will consider that as a business expense. As long as you show 12 consecutive months history of those payments - when they calculate your personal debt to income ratio.

This will only benefit you as a business owner, but not as an employee, because an employee would make student loan payments from a personal account - hence a higher debt to income ratio than a business owner, if all other factors are the same.
Click to expand...
So did you take to the business as a Sole Proprietorship or did you LLC or incorporate? Just curious because I have been reading into types of business and their pros and cons
 
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