[Editor's Note: This is a guest post from Michael Episcope, a cofounder of Origin Investments which was started to provide access to real estate investments and management expertise previously available only to institutions. Although this is not a sponsored post, Origin Investments is a paid advertiser on this site. This post explores important principles to consider when evaluating a real estate investment.]
Private commercial real estate investments can help investors protect and grow wealth. The combination of rental income and price appreciation gives real estate attractive rates of return over other long-term investments, and hard assets have historically acted as a hedge in inflationary environments.
With the passing of the JOBS Act in 2012, accessing private real estate deals has never been easier. Opportunities previously only available to institutions or the ultra-wealthy are increasingly being offered to individual investors through online platforms and other channels. But with this new opportunity also comes new challenges.
Michael Episcope
Today’s investor needs to figure out how to sift through the vast amount of information presented for each deal. But for most prospective private commercial real estate investors, it’s the projected returns that guide their investment choices. And what traps many private equity investors is a tendency to reduce all real estate opportunities down to a few numbers. Most real estate crowdfunding sites or deal syndicators cite only a few profit estimates, such as internal rate of return (IRR) and the equity multiple.
These estimates should be only a starting point. The goal of every investor should be to maximize returns while also minimizing risk. In many cases, a property with a 15 percent projected IRR may be a better investment choice than one that promises 20 percent, after adjusting for risk. And key statistics such as IRR and the equity multiple can be misleading. Here’s why.
When a 15 Percent Return Is Better Than a 20% Return
Real estate investors aim to maximize returns and minimize risk over time. But all returns also come with their own set of risk factors, which is different for every private commercial real estate investment. Every investor needs to consider the following question: How much risk is being taken to generate each unit of return? A property that is expected to generate 20 percent annual returns with twice the risk of one that generates 15 percent return is a worse investment choice.
There is no standard in the world of private equity real estate and there are innumerable inputs that go into creating projections. Projections are subjective in nature, and this is the basis for why it doesn’t make sense to focus on this metric. The exact same deal underwritten by two different managers will yield entirely different outcomes.
There are other metrics of greater importance and understanding them will help lead to better investment decisions. Here are four to consider when you evaluate private commercial real estate investments and attempt to compare one to another:
# 1 Manager Risk
If there is one takeaway from this entire article, this is it: who you invest with is the single most important decision in real estate. A top tier manager will put you in a great position to succeed and protect your capital in all cycles. They behave rationally and responsibly. An inexperienced manager without infrastructure, discipline or their own capital will take outsized risks that benefit them at your expense.
What to consider: Before a deal is ever considered, spend your time talking to the manager and vetting them. Do they have a track record of generating consistent returns? Do they have a quality team? Do they invest significantly along with you? Inquire about the worst deals they’ve ever done, what they learned, and how they incorporate that knowledge into how they operate. Call and speak with references and never be afraid to walk away.
# 2 Leverage Risk
Borrowed money is a risk-reward magnifier. In commercial real estate, risks and rewards rise with the amount of debt needed to buy and improve a property.
What to consider: Leverage is commonly used in private real estate and high leverage is not a non-starter, unless it violates your own risk parameters. However, high leverage needs to produce high returns. An investment that is capitalized with 80% debt generally should produce substantially higher returns than one capitalized with 60% debt.
Also, beware of structures that involve preferred equity and mezzanine debt. Potential investors should understand the “capital stack,” or layers of financing — particularly who gets paid first in the event assets need to be liquidated. Make sure that your return is commensurate with where you are in the capital structure. If you get paid first, the return will be less than those who get paid second or third. Run a quick stress test on every deal: What happens to your investment if the total asset value deteriorates by 10%, 20% and 30%?
# 3 Asset-type Risk
Some types of real estate face more inherent challenges. Apartments and office buildings lock in tenants with yearlong or multiyear leases respectively, while a hotel must rely on short-term, seasonal traffic. Hotel demand also incurs far greater volatility than apartment and office demand, and hotels incorporate much more operating leverage in their model.
The hotel investor should expect a bigger return to compensate for the more unpredictable revenue. A healthy economy will help both properties, but a deteriorating economy will have a greater impact on the performance of the hotel business. The application of this risk assessment applies to every sector from retail to self storage. Even within these industries, risk is not created equal. The risk of a multi-tenant strip mall will be far different than that of a retail building occupied by a single tenant.
What to consider: Prospective investors should understand the risk factors for each type of property, and look for risk mitigators. For example, the proportion of occupied units and the credit scores of the tenants will be signs of a predictable revenue stream for apartment and office buildings. The economic health of a city’s business and tourism markets can be an indicator of its ability to attract hotel guests.
Demand is the key to filling up a building and generating good investment performance. Make sure that demand is real and achievable. What happens if demand falls short? What happens if occupancy falls short by 10% and rents also fall short by 10%? Once you’ve seen these stress tests, you’ll start to get an idea of how much risk you are taking.
# 4 Project-level Risk
Business plans vary greatly in risk and complexity. Ground-up construction has a much different risk profile than an asset that is 80% occupied. Ground-up development adds to the complexity: Construction requires architectural and permit reviews, poses foundation and structural concerns and requires marketing and leasing activity that starts from ground zero.
The complexity of the business plan is highly correlated to the risk of the project. An asset that needs to be fully repositioned and improved has a much larger risk profile than one that has a light value-add planned. In the first case, the demand is unproven.
What to consider: In general, the further out an asset is from generating cash flow, the more risk to the investment. Cash flow mitigates downside in real estate just as dividends do in stocks. A long timeline also carries a higher risk that market or economic conditions could deteriorate.
Keep a Property’s Financial Model in Mind
Real estate is complex and trying to narrow it down to a few variables to make a smart decision is incredibly challenging. When accounting for risk adjusted returns, it’s all about the ability to meet or exceed the assumptions in the underlying financial model. Investors also need to consider things like fees, growth rate assumptions, exit pricing, barriers to entry, aesthetic appeal, capital improvement costs, supply, and asset history, to name a few. These all have a material impact on the risk return profile and the decision to move forward.
Also keep in mind that any deal can be underwritten in a way that makes it look appealing. I’ve never seen a deal that didn’t work on an excel sheet, and I’ve also yet to see a deal follow its business plan precisely. This is why finding a manager who is aligned with you should be at the top of the hierarchy when making a decision. Look for a manager with experience and one that invests significantly side by side with you.
Investors should understand risk-reward profiles so they can better ask the right questions. While offering memorandums will have a great deal of information to help evaluate both the status of an asset and expectations about its future performance, real estate investors should look beyond the estimated returns for details that will alert them to the potential pitfalls and validate a sound business plan.
What do you think? What due diligence steps do you undertake when evaluating a real estate investment? How have your investments done? What have your actual returns been in comparison to the original returns? Why do you think they differed? What mistakes have you made? Comment below!
Featured Real Estate Partners
Interesting article, Mr. Episcope. Thank you for sharing.
I understand the appeal of this asset class, but its not for me. I worry about competing against fellow real estate investors, who are far more experienced and sophisticated than me. I can imagine Donald Trump or Jared Kushner on the other side of any real estate deal I participate in. They would take my lunch as well as tomorrow’s lunch money. I’ll stick with index fund investing.
Thank you for your response. I respect your point of view and I also personally invest in index funds. What private real estate does offer that index funds don’t is the ability to achieve Alpha, excess returns above the market. The optimal portfolio has a mix of both. Institutions generally allocate between 5% and 20% of their portfolio dedicated to this asset class. It’s a difficult area to navigate for the individual though, and the goal of the article was not necessarily to convince people to invest in private real estate but rather to help those who have already made that decision. Happy Investing to you!
I always finding interesting that high earners and intelligent people shy away from real estate. Although I do agree with “big guys” comment, many of the people over at biggerpockets.com would disagree. Plenty of room for investment growth in RE for anyone who is diligent and willing to learn.
This is a well written article. Bravo to the author.
Manager risk is very real and track record is very important when managing that risk. Unfortunately crowdfunding has introduced a lot of manager risk to this space. The “S” in JOBS Act stands for “start-ups.” That is another word for newbie. So a lot of these 2000+ crowdfunders are raising money for inexperienced, newly formed private real estate companies.
When vetting a syndicator, this is an important question – “Why are using a third-party marketing company (crowdfunder) to raise money for you?” Companies who have been around for some time and have a track record of success usually raise their own money and avoid the added expense of the middleman.
Also, keep in mind that while track record is important, the JOBS Act was only passed in 2012. It’s was a great time to start a new company as a lot of real estate asset classes have done well during this 4 year window (2012 until now). That means that many of the newly formed companies have not survived a down market. So in addition to track record, how long a company has been in business is important too. Has the company been around for a decade or more? How did they do in 2008, or 2009 might be something a potential investor would like to know.
A couple of other metrics that can be helpful when looking to eliminate risk are Break-Even Occupancy (BEO). This is the occupancy that a property needs to maintain to break-even. The lower this number is the safer the investment. When looking at this number, consider what the historical occupancy has been for the market / submarket you are looking to invest in. If historical occupancy in the market / submarket is 90%, I would be much more nervous about a property with an 86% BEO than one with a 76% BEO.
Also look at the DSCR (debt service coverage ratio). In simple terms, this is how many times the cash flow from a property can cover the principal and interest mortgage payment. A DSCR of 1.00 is a break-even number. Anything below that is negative cash flow. Therefore the higher the number the better the investment and the lower the risk. Keep in mind that all real estate is local and that commercial lenders (the biggest investors in these projects) tier markets. So in really good markets – tier I (high job growth and population growth, etc.) conservative lenders will allow for a DSCR as low as 1.25% at a LTV (loan-to-value) of 75%. As you invest in riskier markets (tier III) you are likely to see requirements for minimum DSCR at 1.55% with lower leverages like 60% LTV. Just know that all lenders are not equal and many will allow you to have riskier debt products. In the multifamily space, GSE (government sponsored entities – Freddie and Fannie commercial) lenders are much more conservative than CMBS (commercial mortgage-backed securities). That is why the GSE lenders have less than a 1% foreclosure rate in multifamily over the last 16+ years and currently stand at 0.02%. If they are going to be the biggest investor in these projects, they demand conservative, realistic underwriting and their foreclosure rates show that.
These are all things to consider when evaluating the subject of risk in real estate and how to mitigate it.
The manager thing is really important. I think the data available shows that in these alternative asset classes, only the top quartile of managers deliver performance good enough to pay for.
Also, unlike traditional asset classes, in alternative asset classes, the returns really spread out.
One other thing to consider about real estate investment partnerships is that you’re going to lose or delay some of the tax benefits that would be available to you and your family if you’d invested directly. See for example these other guest posts:
https://www.whitecoatinvestor.com/real-estate-tax-loopholes-for-unintentional-investors/
https://www.whitecoatinvestor.com/ten-tax-loopholes-for-active-real-estate-investors/
“One other thing to consider about real estate investment partnerships is that you’re going to lose or delay some of the tax benefits that would be available to you and your family if you’d invested directly.”
That depends on what type of investment you are talking about. Yes, you lose a bunch of tax benefits in REITs and some other models. However, many of these are structured such that investors have direct passive ownership…just on a fractional basis. In those cases, they have the same tax benefits as any other passive investor whether they own 100% of the property or 5%.
And a trickier time exchanging.
Maybe we’re agreeing with each other here but don’t realize it… But to present maybe the other point of view:
With an investment in a syndicated real estate deal where you have no material participation, you’re not going to be able to deduct your passive losses until you dispose of the activity since you’ll automatically fail the material participation test. (In comparison, you should easily pass the material participation test for direct real estate investments and if you have a spouse who’s a real estate person, you can probably arrange your situation to pass the real estate professional test.)
With an investment in a syndicated real estate deal, I think you’re going to pay the Sec. 1411 net investment income tax on any rental income and more significantly on the capital gains. (In comparison, with direct real estate investment you should be able to avoid the net investment income tax.)
With an investment in a syndicated real estate deal, you could get a step-up in basis, but you probably won’t because these deals automatically end at some point in the not that distant future. (With a direct investment, in comparison, you can if you want hold over forever … and some families do this.)
Finally, as I think WCI points out above, with direct real estate you don’t really have the option of using Sec. 1031 exchanges to delay (often forever) when you realize gains. (In comparison, with direct investment you do.)
Ugh. I meant to say, “Finally, as I think WCI points out above, with INDIRECT real estate you don’t really have the option of using Sec. 1031 exchanges to delay (often forever) when you realize gains. (In comparison, with direct investment you do.)
We operate in an LLC fund structure so the tax benefits do pass through to the investor. It’s a tax efficient asset class which is why I personally like it so much. Hedge funds and debt products are not tax efficient. Here’s a blog from our website on the topic of tax benefits-
https://www.origininvestments.com/2015/12/23/tax-benefits-commercial-real-estate-investments/
I’m not clearly communicating, sorry…
The issue I’m referring to is the Sec. 469 passive loss limitation. That chunk of law makes it basically impossible for your investors to use the passive losses that appear on the K-1s kicked out by the partnership (which just so everybody understands is what an LLC is treated as for income tax purposes.)
BTW, it’s this chunk of tax law that says real estate is by definition passive and so is anything else you don’t materially participate in. E.g., direct ownership of real estate is passive. So is an LLC investment in a factory if you don’t meet material participation rules.
Stephen, you are making an apples to oranges comparison by comparing active investing to passive investing. This is an article about passive investing. There is no doubt that if you have the experience and expertise to be a successful active investor that the tax benefits are better on the active side than the passive side.
Having said that, the tax benefits of passive investing are still outstanding. Again, these are typically direct ownership just on a fractional basis. Direct ownership allows you to avoid the 3.8% ACA tax on net investment income (sec 1411). Depreciation typically provides for that paper loss even though the investor realized an actual gain. With the paper loss, the tax goes away.
As for holding forever and erasing depreciation recapture via a step up in basis upon death, that is totally possible. Just depends on what company you invest with and if your goals are aligned with their investments. Some employ a value add model in which they look to improve the property, get it rented up and then sell for a profit. Others are long-term holders of real estate for stable cash-flow and equity growth. It’s really important to make sure your goals are aligned with the syndicator’s business plan.
Lastly, it is a total myth that you cannot do a 1031 exchange with syndicated real estate. In fact, we just did one about a year ago in which we sold a 164 unit property in Louisville and exchanged into a 408 unit property in DFW.
Two comments:
First depreciation is not just a paper loss. Certainly not all the time anyway. The IRS allows you to depreciate stuff because it really is going down in value. It might take a few years before you have to replace it, but you will have to replace it. How many 400 year old buildings are there in your neighborhood? Exactly.
Second, you say “WE sold a 164 unit property…and exchanged it.” But let’s say that just YOU wanted to exchange a property. Not so easy now. Nor are you, by yourself, completely in control of the timing of the exchange. Stephen is right that exchanges are significantly trickier, even if possible, when investing via syndicated deals than if you just own the whole darn property yourself. Not saying that isn’t a worthwhile trade (giving up that control for the benefits of syndication) but you can’t pretend the issue doesn’t exist.
Interesting argument…I guess if you are worried that the property you bought today might be worth less to your family five generations from now, then you might have a point. However, since the depreciation schedule for resident occupied real estate is 27.5 years and not 400 years, I think the odds are in your favor (although not 100%) that the property has gone up in value over that time period. So in that case, I would argue that it is a paper loss.
As for 1031 exchanges – I think you are making an apples to oranges comparison. Yes, they are easier if you are an active investor and own the property. However, they are absolutely possible (if your syndicator allows them) on a passive basis. So they can be done in either scenario. If you want the control over the exchange then you are likely looking into active investing and not passive.
You know you don’t depreciate the property. You depreciate the building on the property. That building wears out and from time to time parts of it have to be replaced. You depreciate a roof over 27.5 years. Which is about how long a roof lasts. That’s not a paper loss. It’s very real. Just because your land appreciates enough to make up for it doesn’t mean it isn’t real. Look at the roof on one of your rental properties. Maybe it is ten years old. Do you really believe that roof is worth more now than it was ten years ago? Probably not even in nominal terms and definitely not in real terms.
The way you describe it it sounds like some loophole nobody at the IRS knows about or some kind of a free lunch. Plus, it gets recaptured when you sell. It isn’t a free lunch. The only free lunch is the ability to exchange, exchange, exchange until death and then get the step-up in basis at death. Which may be on the chopping block with the Trump Tax Plan. That and the difference between your tax rate and the recapture rate. There’s a very small free lunch there. And maybe the time value of money between depreciation and recapture. Another very small free lunch there.
I agree with you that things do wear out and need replacement over time. And it is wise to have a capital improvement plan in place with reserves to cover those.
Having said that, this is not residential real estate and these are not valued by the comparison (comp) model. The value of commercial real estate is a function of net operating income (NOI). Therefore the value of these properties has little to do with land appreciation as you suggest. Instead, valuation is a function of a manager’s ability to either 1) raise revenue 2) decrease expenses or 3) increase retention. All of these can increase NOI which forces appreciation and has nothing to do with land value.
Contrary to what you say, I don’t believe depreciation is a loophole. It is sound public policy with the purpose of incentivizing us to provide housing for others.
I agree with you that the ideal strategy for maximizing tax benefits is to 1031 exchange until death and then have the depreciation recapture tax be eliminated. However, even if you decide not to do that, the maximum rate on recapture is 25% which is significantly less than the top income tax rate of 39.6%. I don’t see that as insignificant. Plus you said nothing of the time value of money.
Let’s say you did a 1031 exchange and then later sold at a profit 20 years later. Isn’t a lower tax paid 20 years from now more beneficial than a higher tax paid today?
What about the elimination of the 3.8% ACA tax on net investment income? Don’t you see value in that?
I wish every tax benefit associated with real estate was elimination, but some are only deferral. Those are still good too.
I mentioned the time value of money, but it was an edit, so it probably didn’t come through to you in the feed. I agree that if you’re going from 39.6% to 25%, it isn’t insignificant, but it isn’t the same as getting all 39.6%.
I agree income properties are valued based on income/rent etc. That doesn’t mean that depreciation is some nebulous thing. The government doesn’t give you a depreciation deduction because it wants you to provide housing. It gives it to you because stuff really does depreciate and has to be replaced. Now, maybe the fact that they only recapture it at 25% is an incentive to provide housing. I suppose you could argue that. But I think it’s probably just a result of some good lobbying.
Dennis said, “What about the elimination of the 3.8% ACA tax on net investment income? Don’t you see value in that?”
Gosh sorry if I’m misreading you, but if you’re passively investing in real estate, you pay the 3.8%. Here’s additional detail:
http://evergreensmallbusiness.com/real-estate-investors-net-investment-income-tax/
Note: You can afford the 3.8% if you invest directly… That was one of my points.
That was my understanding too. The 3.8% Obamacare tax applies to dividends, capital gains, and rental income.
One comment about direct investing above-The definition seems to imply that direct investing is when an investor buys a deal ‘directly’ rather than investing in a fund or in a deal with a manager. While it is true that buying directly allows you to defer taxes, tax strategy should be a consideration in investment strategy but not be the driver. There are many other things to consider with a direct ownership strategy.
Buying direct real estate takes a lot of time, a substantial amount of capital, can lead to a lack of diversification and expose you to unlimited liability.
Let’s assume you want 20% of your portfolio in private real estate. If you have $10 million in investable assets, that leaves you with $2 million to allocate to this sector. If you want to diversify, then you need to buy around 10 deals which means you have 200k in equity per deal. Assuming you are going to leverage 50%, that means you can only look at deals that are 400k or less in total value. That’s a very small universe. We have investors worth more than $50 million who would never consider direct ownership for this reason alone. Additionally, non-recourse loans are generally not available for assets of this size range, which means you will be required to guarantee the loans. you now have unlimited liability. Hopefully you have also quit your job and are doing this full time because the people you are competing against are in the business full time. If you make $300,000 per year in your full time job and decide to quit, deduct that from your investment returns because that’s your opportunity cost. You will also need to become an expert in underwriting and find a way to create good deal flow. Relationship building can take years. To find one good deal, you’ll need to review more than 20 and probably closer to 50. As a benchmark, we look at 100 deals for every 1 we acquire. Once you assemble your portfolio someone will need to act as the asset manager and manage the property managers. That costs money and takes time.
The point is that this business is more complex than most think and requires a lot of people to do it right. A hedge fund can manage a billion dollars with less than 5 people. It would take a team of 25 or more people to manage the same amount of capital in real estate.
Many have done it successfully but I have been privy to a lot of stories where it didn’t end well for the investor. We have a multitude of investors who used to buy real estate directly and now invest alongside of us through our funds. This allows them to leverage our team, reap the benefits of private real estate from both a tax and return perspective, and focus on what they do best.
Michael said, “…tax strategy should be a consideration in investment strategy but not be the driver. …”
I am happy to stipulate that. We are actually in totally agreement on that point…
But that said, one possible way for high income couples to save a lot of money for retirement in a tax advantaged way is to have one spouse work in a high wage profession (like medicine) and then have the other spouse manage directly the family’s real estate portfolio and on paper generate $100K or whatever of passive losses. Done right, the family can use the real estate paper losses to shelter earned income.
You are correct in your assessment. Unlike public markets where past performance is NOT indicative of future performance, it is in the private sector. This is an actively managed asset class. 60% of top quartile managers remain above the median from fund to fund while 60% of bottom quartile managers remain below-Hence the value of finding a good manager. (Data is from Preqin)
Good article with great advice. I have invested in many different crowdfunding opportuinities this past year. So far no huge loses but I wish I would have read this article before investing. I really didn’t vet the manager of any of the projects more than just reading what the website said about them. I have invested a bit into “Patch of Land” and “PeerStreet” loans but I think I’m going to back out of those platforms once my money gets paid back. There are far too many delays in payment and one of my $5K loans is heading toward foreclosure. It remains to be seen how much of my money will be returned. The risk involved in these loans is too great for the reward. It has been a learning experience though!
We’ve all had those learning experiences. The reason I’m able to write on this topic is because I’ve ‘learned’ a lot over the last two decades. It all comes down to people in this business. Institutional investors such as endowments used to spread their capital across a variety of managers and deals. They’ve trended towards less managers and larger concentrations of capital with those managers. The silver lining in your case is that you are now a wiser investor.
I think this is an excellent article. Manager risk is very real and difficult to diversify away. Real estate is clearly a more inefficient investment class than securities, so more opportunities for a talented manager to provide additional value. However, there is a significant learning curve to know who is a talented manager and who is a hack or a fraud.
An anecdotal comment and then a sort of empirical one…
Anecdotal comment: Over the years, I’ve seen a number of people get into real estate seriously. Like every other tax accountant… I sort of feel like learning curve is a five year process. BTW, in my practice, that’s not five years for some dodo… that’s five years for somebody who’s smart and disciplined and business-like.
Empirical comment: In the “Pioneering Portfolio Management” book (page 74), Swensen notes that over one ten year period when (roughly) US equities produced 10%, 11% and 12% as annual returns for third quartile, median and first quartile, average direct real estate produced 8%-ish, 12% and 18%-ish… so as PulmDoc notes, real estate is clearly a more inefficient asset class.
There is a learning curve and there are certainly groups out there looking to fleece investors. We found a group three months ago that ripped off our website-Not just our style but all of our data too. They copied all of our text, graphs, strategy and passed off our track record as theirs. They are down now but it was pretty incredible to witness.
One of the reasons my partner and I started Origin was to take control over our own investment destiny. We fully understand how challenging it can be for an individual to navigate this market. The Crowdfunding law makes access easier but it’s tough to navigate because of the lack of standards and its opaque nature. Institutional investors hire teams of people with industry experience to vet managers and their strategies. It can take years of relationship building before they invest. If you do plan to invest in this market, hire a manager in the same way you would hire someone at your business. Look for someone who has a good resume, a cultural fit, behaves reasonably and exercises good judgment. The rewards far outweigh the costs when done right.
Incredible article, thank you so much for contributing.
To any of the seasoned private real estate investors on here: any recommendations for good books to read on this subject? As I enter residency, I’d really like to learn more about this so that when the time comes and the bigger paychecks roll in, I won’t need to play catch up on knowledge. There are a couple by John T Reed in the “books” section but curious if there are others that you guys really trust.
Thanks!
This is the best book I’ve read:
http://www.retirerichfromrealestate.com/
The title BTW makes it sound like a get rich quick scheme. It’s not.
This isn’t real estate related but it’s one of my favorite investment books- ‘Reminiscence of a Stock Operator’ written by Edward Lefevre. Fun read and has a lot of really good behavioral investing insight.
Blogs are probably your best bet for real estate related information.
OT but, if origin Investments is a paid advertiser on this site, where is the advertisement? I don’t see it.
Lots of places to advertise these days that aren’t always evident- listings, newsletter, forum, podcast etc. And ads move around from time to time too. I just try to let readers know about any financial relationships that seem relevant to my conflicts of interest.
I asked my business manager about this. When I accepted the guest post, Origin was not an advertiser on the site. Since I accepted it, they ran some ads, so she added the comment about the conflict of interest. I’ll have her add an in-content ad to this post too.
Guest posts are accepted purely based on the quality of the content. I run almost everything written by a doc, most stuff submitted by my advertisers (they usually get the level/quality of content right just from being around for a while,) about half the stuff submitted by financial professionals, most stuff submitted by well-established bloggers, and almost nothing where the initial contact is a spammy sounding email.
Thanks WCI. Mostly I was just curious, but glad for the detailed message! As you know I am mostly curious and trying to soak up much of what you write – yes including the way you run your blog 🙂
Great article. @WCI I appreciate your disclosure comment. It says a lot about your character.
I’ve always been big on disclosure on this site because I see that as one of the biggest problems in financial services. Lack of transparency in pricing is also a big problem in medicine. I haven’t figured out how to deal with that yet.
Do any Drs. on here invest passively in private lending? In other words, giving funds against an investment property in exchange for an interest rate or share in the property tax benefits, sell price, rental income etc…?
That’s not lending, that’s buying equity. I do both (lending and equity).